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Penalty and Interest can be imposed if a person needs to reduce TDS. In the article, we cover the applicable interest and penalty for TDS default.
Here is the TDS default for that the interest is payable.
In the above cases of failures, the provisions of section 201 of the Income Tax ACT supplicate and interest is payable as under of
Other provisions –
The provisions in the case of the TDS not reduced in the respect of payments completed to the resident.
As per proviso to section 201 of the Income Tax Act, if the person is responsible by law to reduce TDS fails to reduce the whole or part of the TDS on payment being completed to a resident and then in such case person is liable to reduce TDS can simply not be considered as assesses-in-default for non-education if all the below conditions are satisfied.
If all the above conditioned are completed, the person If all the above conditions are satisfied, the person responsible to reduce TDS would not be treated as assessee in default for the non-deduction or less deduction of TDS and would respond to pay interest at 1% from the date on which TDS was reduced till the date the resident recipient has furnished his income tax return.
As per provisions of section 201(1A), it is compulsory to pay interest for delay in payment of TDS or for non-payment / non-deduction of TDS before filing TDS return.
The penalty provisions under TDS are as follows:
As per provisions of section 271C penalty for non-deduction/non-payment of TDS would be an amount equal to tax not so deducted/paid.
A person is liable to pay INR 200 per day as a penalty until the failure accurse. However, the highest penalty payable would be subjected to the TDS amount.
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