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2019

Fees & Penalty for Late / Non Filing of TDS/TCS Return

Fees and Penalty for Late Non Filing of TDS TCS Return 1

Tax Deducted at Source and Tax Collected at Source (Commonly known as TDS/TCS) are very important concepts in Income Tax Act, 1961. Every assesse who is liable to deduct / collect TDS or TCS at source must be well versed with all the related provisions. After collection/deduction of tax at source, the same must be deposited within a prescribed time limit to the credit of the Government of India. Along with that four quarterly TDS/TCS Returns must also be filed by the Deductor on or before prescribed dates during the financial year. 15th July 2019 is the due date for filing TCS return and 31st July 2019 is the due date for filing TDS Return for the quarter ending on 30th June 2019. Hence in this article we are going to discuss various provisions related to filing of TDS/TCS return as well as penalty and late filing fees associated with TDS/TCS Return if deadlines are missed.

Basic Rules for Assesse Liable to Deduct/Collect Tax at Source:

  • He shall obtain Tax Deduction Account Number or Tax Collection Account Number (TAN) and quote the same in all the documents pertaining to TDS/TCS.
  • He shall deduct/collect the tax at source at the applicable rate.
  • He shall pay the tax deducted/collected by him to the credit of the Government.
  • He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
  • He shall issue the TDS/TCS certificate in respect of tax deducted/collected by him.

Due Dates for Filing of TDS/TCS Return:

The due dates for filing of TDS/TCS return for different quarters of Financial Year 2019-20 are as follows:

Quarter TDS Return Due Date TCS Return Due Date
Q1 1st April 2019 to 30th June 2019 31st July 2019 15th July 2019
Q2 1st July 2019 to 30th Sept 2019 31st October 2019 15th October 2019
Q3 1st October 2019 to 31st December 2019 31st January 2020 15th January 2020
Q4 1st January 2020 to 31st March 2020 31st May 2020

15th May 2020


Non Filing / Late Filing of TDS/TCS Return:

No filing or Late filing of TDS returns or TDS statement shall invite 2 penal consequence.

1. Fee for Late Filing U/s 234E
2. Penalty for late filing or Non filing of TDS statement U/s 271H.

Late Filing Fees under Section 234E:

  • As per section 234E, where a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues.
  • The amount of late fees shall not exceed the amount of TDS.
  • TDS/TCS return cannot be filed without payment of late filing fees as discussed above.
  • In other words, the late filing fees shall be deposited before filing the TDS return.
  • It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.

Penalty under section 271H:

  • As per section 271H, where a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then assessing officer may direct such person to pay penalty under section 271H.
  • Minimum penalty can be levied of Rs. 10,000 which can go upto Rs. 1,00,000.
  • Penalty under section 271H will be in addition to late filing fees prescribed under section 234E.

Filing Incorrect Return:

  • Apart from delay in filing of TDS/TCS return, section 271H also covers cases of filing incorrect TDS/TCS return.
  • Penalty under section 271H can also be levied if the deductor/collector files an incorrect TDS/TCS return.
  • In other words, minimum penalty of Rs. 10,000 and maximum penalty of up to Rs. 1,00,000 can be levied if the deductor/collector files an incorrect TDS/TCS return.

Exemption from Penalty:

A tax payer may be given exemptions from penalty in following cases:

  • The person has paid all the tax deducted/collected by him to the credit of the Government before filing the return.
  • The person has paid all the late-filing fee and interest (if any), to the credit of the Central Government before filing the return.
  • If TDS/TCS return is filed before the expiry of a period of one year from the original due date of filing the TDS/TCS return.

Apart from above relaxation, in following two cases the taxpayer can get relief from penalty under section 271H:

Powers of Commissioner of Income Tax:

  • Under section 273A(4) the Principal Commissioner of Income-tax or Commissioner of Income-tax has power to waive or reduce the penalty levied under the Income-tax Act.
  • Penalty can be waived or reduced by the Commissioner of Income-tax if the conditions specified in section 273A(4) in this regard are satisfied.
  • Apart from shelter of section 273A(4), section 273B also provides immunity from penalty in genuine cases. As per section 273B, penalty under section 271H will not be levied if the taxpayer proves that there was a reasonable cause for failure.

Read More: Key Changes in ITR Forms For AY 2019-2020

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