TDS penalty for late filing

TDS Return and Payment Due Date For FY 2024-25

Late filing of Tax Deducted at Source (TDS) returns in India can result in penalties under Sections 234E and 271H of the Income Tax Act.

Late Filing Fee (Section 234E):

A fee of ₹200 per day is levied for each day the TDS return is delayed beyond its due date. This fee accrues daily until the return is filed but cannot exceed the total TDS deducted. For example, if a TDS of ₹5,000 was deducted and the return is delayed by 109 days, the calculated fee would be ₹21,800 (₹200 x 109 days). However, since this exceeds the TDS amount, the cost is capped at ₹5,000.

Penalty (Section 271H):

In addition to the late filing fee, a penalty ranging from ₹10,000 to ₹1,00,000 may be imposed if the TDS return is filed after the due date or contains incorrect information. This penalty is applicable if the return is filed more than one year after the due date. However, the penalty may not be levied if the tax deducted or collected is paid to the government, along with applicable interest and late filing fees, and the return is filed one year before the expiry of the due date.

Interest on Late Deposit of TDS:

If the deducted TDS is not deposited to the government on time, interest is charged as follows:

• Deduction: 1% per month or part of a month from the date the tax was deductible to the date it was deducted.
• Delay in Depolay in Desit After Deduction: 1.5% per month or part of a month from the date of deduction to the date of deposit.
• This interest should be paid before filing the TDS return.

Prosecution (Section 276B):

Failure to remit the deducted TDS to the government’s credit within the prescribed timeframe can lead to rigorous imprisonment ranging from 3 months to 7 years and a fine.

To avoid these penalties, it is crucial to deduct TDS appropriately, deposit it within the stipulated time, and file accurate TDS returns by the specified due dates.