Table of Contents
Compliances of TDS/TCS
One of the main concepts of the Income Tax Act 1961 is tax Deducted at Source (TDS) and Tax collected at Source (TCS). All registered assessee who is liable to deduct TDS or TCS shall collect/Deduct tax and shall be deposited within the time limit specified by the Government.
Basic points to be remembered by the assessee who is liable to deduct TDS/TCS:
- The Tax Deduction / Collection Account Number is mentioned on all TDS / TCS related documents.
- The tax amt. is collected or deducted as per the applicable rate.
- He must regularly submit TDS or TCS returns
- Certificates of TDS or TCS shall be given in respect of the tax amt. deducted or collected.
- Rate of TDS For the FY 2024-25
Compliance’s Due Dates for TDS/TCS returns filing:
QUARTER |
FOR TDS RETURNS |
FOR TCS RETURNS |
|
1st quarter(April-June) |
31st July |
15th July |
|
2nd quarter(July-Sept) |
31st Oct |
15th Oct |
|
3rd quarter(Oct-Dec) |
31st Jan |
15th Jan. |
|
4th quarter(Jan-March) |
31st May |
15th May |
Interest applicable on late deposit of Tax Liability:
As per section-201A, interest is also applicable with late fees for late deposit of Tax Liability. In the given Table showing the various ways to calculate interest;
Nature of Default |
Rate of Interest Applicable |
Period for which interest is calculated |
|
1. Non-deduction of TDS in whole or in part |
1% per month |
From the due date on which the tax was to be withheld until the date on which it was finally deducted. |
|
2. Non-payment of tax after deduction either in whole or in part |
1.5% per month |
From the date of Tax deducted to the date of payment. |
New TDS deduction No cash transactions exceeding 1 Crore -Section 194N
TDS Payment Timeline of National Holiday or Sunday
The TDS shall be paid at the time of payment to the recipient and the TDS shall be deposited by the payer to the Govt. Tax Deducted at Source filing is Compulsory for all those who have been involved in payment transactions and thus calls for separate Govt Dept. The latest forthcoming Tax Deducted at Source return filing due date given by the Govt is close due to National Holiday or Sunday. To know Complete details of the Tax Deducted at Source return filing due date here for more information. As far as the sources are concerned, it has been found that the coming TDS return due date falls on Sunday, which is a public holiday, so once the Tax Deducted at Source can also be charged on the next working day.
TDS for the purchase of immovable property
The time frame for the Tax Deducted at Source deposition on the acquisition of immovable property shall be the 30th day of the following month in which the property is purchased. For Example, if the immovable property is acquired in the month of June, Tax Deducted at Source will be deposited by 30 July.
Interest on TDS/TCS non-payment
In addition to the penalty, interest may also be paid in addition to the penalty. Interest is owed by taxpayers until the TDS return is filed. Details on interest rates are given in Section 201 A. For late payments of advanced tax, self-assessment tax, standard tax, TDS, TCS, equalization levy, STT, CTT made between 20 March 2020 and 30 June 2020, a reduced interest rate of 9 percent would be paid for this period instead of 12 percent/18 percent per year (i.e. 0.75 percent per month instead of 1/1.5 percent per month). No late fee/penalty shall be paid for any delay in respect of that time. Moreover, No or short TDS/TCS payments made after 30th June would attract the additional interest liability:
If any or more of the tax is not deducted at source, then 1% per month of interest is subject to the TDS/TCS rate as the interest period begins from the date on which the tax was deductible and lasts until the final deduction date.
Interest at a rate of 1.5 percent per months after the date on which it was deducted to the final date of deposit) must be charged for delayed payment of TDS after deductions.
Note: Interest is calculated on the basis of a period of months and not on the basis of the number of days so that part of a month is taken overall.
Basic Understanding of Tax Deduction At Source
PENALTY
1. Section-234E
As per section 234E of Income Tax Act, 1961, if a person fails to file a return he shall pay a fine of Rs. 200 until the date of filing the return.
However, in the late filing, the maximum amount of penalty that the person needs to pay is Rs. 5000/- only.
2. Section-271H
As per Section-271H, the Assessing Officer may force a penalty If a person fails to file a TDS/TCS on or before the due date.
The amount of penalty which he can impose is Rs. 10,000 but cannot exceed Rs.1,00,000.
Various types of TDS return forms
It is the duty of the deductor to subtract the TDS from the Deductee’s income and to file the TDS Return Form for it. Various types of TDS return forms are available for various deductions which are depending on the nature of income and the type of deduction charged on behalf of the TDS.
Name of TDS Return Forms |
Details of the TDS return forms |
|
FORM 24Q |
TDS return for salaries |
|
FORM 26Q |
TDS returns for all payments other than salaries. |
|
FORM 27Q |
TDS return for additional income for e.g. interest, dividends, or any other amount payable to a non-resident. |
|
FORM 27EQ |
TCS( Tax collected at Source) return |
Penalty: In compliance with the rules of the Income Tax Act, you may be liable to pay a penalty equivalent to the total deducted/collected.
Prosecution U/s 276B : Section 276B states that if a person fails to pay the Govt a fine within the due date prescribed, as stated as per the Chapter XVII-B -TDS, he shall be punished with a fine and with severe imprisonment for a period between three months and seven years. The TDS liability shall be dependent on the situation or examination carried out by the A.O concerned.
Penalty Under Sections 234E for late filing of TDS/TCS return Penalty (Under Section 234E): The TDS deductor shall be liable for payment of Rs 200/-per day to the Income-tax dept until the due date of payment of the Complete TDS amount. However, the penalty is limited to the actual amount of the TDS and cannot be greater than that amount of TDS.
Penalty (Sec 271H): As per the section, if a person fails to file a TCS / TDS return before the Timeline, the AO may order him/her to pay penalties U/s 271H together with the late fee imposed U/s 234E. The penalty U/s 271H Start with INR.10k & can be increased to Rs 1 lakhs if the Deductor/Collector furnished an incorrect return.
Circumstances where no penalty is imposed for late filing or payment of the TDS/TCS return as per section 271H.
- The TDS shall be paid to the Government.
- Interest, along with late filing fees, is required to be paid in the case of Govt's.
- The TCS/TDS return is filed prior to the end of 1 year from the deadline as indicated (provided that the submitted return is correct)
The aim of the tax deduction at source is to get more individuals into the net income tax. Compliances of tax deducted at sources (TDS) has been a central factor in the estimation of income tax by business organisations. We are providing TDS, TCS, TDS Compliance & Tax Deducted at Source (TDS) services; TDS Compliance is essential for any form of business because it helps to maintain the profitability of the business. Our team of professionals has many years of experience in this area, guides our customers in making their payments, and assists them in filing TDS returns on time and we are among the top of TDS Expert India
- COMPLIANCES OF TAX DEDUCTED AT SOURCES(TDS)
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TDS & TCS Rate chart for FY 2024-25
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Comprehensive study about TDS & TCS chapter
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