a) The matters relating to TDS/TCS in a government department is handled by persons with reasonably good education background. Appropriate computer training is also given by the Government to them for day to day functioning of the system. Accordingly, the records are well maintained and seemingly there should be no issues for them in timely furnishing the statement of TDS/TCS within 30 days from the end of the quarter. However, in comparison to the same, the non- Government deductor who is a business man may not necessarily be even a graduate. The non government deductors majorly comprise of non-corporate sector which is not very organized. Approximately less that 6000 assessees are listed companies who take the help of professionals to file statements of TDS/TCS in time. Approximately, 6,60,000 assessees are private limited Companies, but majority of them are family organizations or organizations among the friends registered as Private Limited companies under Companies Act. Further, last year there were approximately 18,00,000 tax audit asseessees. This clearly reflects that more than 66% of the assessees who are liable to deduct TDS are non-corporate entities comprising of Individuals, HUFs, firms etc. In addition to above, certain non corporate and NGOs are also mandatorily liable to deduct TDS.

It has been brought to the notice of ICAI that 15 days time limit is too short for the same causing genuine hardship to the deductor, who has to deduct tax, pay tax through challan, collect the same from the bank, prepare the TDS/TCS statements and
thereafter submit the same to TIN Centre, which may not always be located in the near vicinity. Also, the levy of fees under section 234E has been a matter of great concern.

It is highly appreciable that the Government has taken an open mind while considering the problems of e-filing of statement  of TDS /TCS and has extended the time only for Government deductors. In fact, considering the difficulties being faced by the  government deductors, this circular was a step in the right direction. Since the above difficulty equally applies for other deductors also, one time amnesty is sought for all deductors with regard to all TDS statements pertaining to FY 2012-13 and FY
2013-14 to be submitted on or before a cutoff date to be decided appropriately.

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b) According to the provisions of section 234E, where a person fails to deliver or cause to be delivered a statement within the time prescribed then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. But the amount of fee shall not exceed the amount of tax deductible or collectible, as the case may be.

Considering the hardships being faced by the taxpayers due to various reasons, penal fees for late filing of TDS returns need to be changed to period wise/ slab of days instead of current system.

It is suggested that
a) the time limit to file quarterly TDS return for non-government deductors be also increased to 30 days as available to the government deductors. With this change there will be neither a revenue loss nor any hardship to the deductees.

b) It is highly appreciable that the Government has taken an open mind while considering the problems of e-filing of statement of TDS /TCS and has extended the time only for Government deductors. In fact, considering the difficulties being faced by the government deductors, this circular was a step in the right direction. Since the above difficulty equally applies for other deductors also, one time amnesty is sought for all deductors with regard to all TDS statements pertaining to FY 2012-13 and FY 2013-14 to be submitted on or before a cutoff date to be decided appropriately.

It is suggested to follow day wise slab system & it may be taken as:

Period of Default
Max. Fees u/s 234E
Upto 15 Days  Rs. 500/- or tax amount, whichever is higher, but subject to maximum of Rs. 20,000/-.
From 15 Days to 1 Month  Rs. 1000/- or tax amount, whichever is higher, but subject to maximum of Rs. 20,000/-. 
From 1 Month Onwards
Rs. 1000/- + Rs. 200/- per day or tax amount, whichever is higher, but subject to maximum of Rs. 20,000/-.

Source- Pre-budget Memorandum 2014 on direct taxes by Institute of Chartered Accountants of India

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Tags : ICAI (2179) Section 234E (51) TDS (899)

0 responses to “Give Amnesty to TDS deductors from Fees under section 234E – ICAI”

  1. Kishor Goyal says:

    If we read the case of Bombay High Court where department contention is considered than for Ist three quarter the department could not be levied any fees and even in the forth quarter that the fees could be charged after due date of filing of the return of income See. Para 8 of in the case of Rashmikant Kundalia 54 Taxmann.Com 200

  2. Sekaran says:

    All that a tax payer needs is the timely receipt of the unique number whoch correlates with the Form 16A. This unique number also can be provided on the 26AS form for each FY by the CBDT itself. This will rediuce the hassles n making cliams at the right time as well as put the tax deductor on his toes and ensure that his efficiency is increased especially the postal and other Govt Departments who are used to laziness and lack accountability right now. A central minister like Javadekar suits them all to make them work straight!

  3. shivayogi says:

    the tds amount directly credit to deductee account, whenever he made the payment by puting the TAN and PAN of the deductee and deductor, then the burdern will be reduced to the assesse. further then there is no need to file the quarterly return.

  4. Pallav says:

    There already provisions in the act for default in furnishing TDS/TCS statements as well as defaults in deductions of tax, then why to have such harsh provision ….!!!

    I think this Sec. 234E must be abolished….???

  5. mallikar jun says:

    good step by icai

  6. ASHWIN GALA says:

    EVEN THIS IS NOT JUSTIFIABLE FOR SMALL BUSINESSMEN. THERE ARE SO MANY LAWS, SO MANY COMPLIANCES. BY DEDUCTING TDS & PAYING , THE ASSESSEE IS DOING TAX COLLECTION JOB FOR GOVT.FOR THE SMALL BUSINESSMAN DEFINATELY TDS JOB IS TEDEOUS JOB.HE IS ALREADY PAYING INETERST. SO OVER & ABOVE THIS THERE MAY BE TOKEN PENALTY FOR RS. 50/- PER DAY FOR 1ST MONTH. RS. 100/- PER DAY FOR SECOND MONTH.

  7. Yeshwant Shiodkar says:

    Good initiative taken by ICAI

  8. RAVI KIRAN R says:

    The additional fee proposed by ICAI is much higher than existing fee itself. For 15 days delay penalty proposed is Rs. 500 or TDS whichever is higher!! As of now addl. fee is Rs. 3,000/- only for 15 days; ICAI proposes to change it to full TDS amount being defaulted!!

  9. Sekaran says:

    No Sir. Govt should not be given any amnesty.The Govt Departments are the real culprits. Take the Indian Post for example. For tax deductions made in Q1 and Q4 of FY 2013 – 2014 we are still fighting to pull out the Form 16A. (Mylapore HPO in Chennai). This has become a routine with them.We had to fight last year also and again we are fighting this year.
    The only thing CBDT can do for us is allow us to get the Form 16A on the internet itself directly to the PC of the TDS deductees using the ususal log in procedures as for the ITR submission on line so that the correct info is filled in the ITReturns before the due date of July 2014. Also we do not have to wait for the endlessly from the Govt Department.
    I do not know whether this delaying beyond 30 days is a disesase peculiar to Tamilnadu only or also belongs to the rest of India.

  10. Niranjan says:

    In the suggested slabs of penalty, the amount of pentalty need to be prescribed amount or Tax Amount whichever is lower.

    In the given table mentioned as – whichever is higher instead of lower.

  11. s sudarshana says:

    Very reasonable. There should not be delay of more than 1 month, except technical problems. Delibarate delay above one month is to be viewed more seriously.

  12. neel says:

    if a deductor/bank does not provide TDS Form 16A to assesse/depositor and makes excuses then is there any course of action could be taken against deductor????

  13. deepak sareen says:

    i m totally agree with u . tds date should be same for govt. and other deductors it is abig problem to file the tds returns in hill states

  14. ALOK KUMAR JAIN ADVOCATE LALITPUR UTTAR PRADESH says:

    SIR THIS ABOVE SUGGESTIONS SHOULD BE REACH TO FINANCE MINISTER
    WHO DID A GOOD JOB TO SOLVE THE PROBLEM OF ASSESSEES BUT FOR TDS DEDUCTOR IS ALWAYS AFRAID IF THERE IS ANY PENALTY U/S 234E AND PRESCRIBED TIME LIMIT SHOULD BE TRANSPARENT.
    UPLOADING QUARTERLY STATEMENT DATE FOR GOVT DEDUCTEE AND OTHER DEDUCTEE SHOULD BE SAME.
    I AGREE WITH YOU FOR LATE FILING FEE
    FINANCE MINISTER AND PRIME MINISTER KO KUCH NAHI KARNA HAI BAS HUMARE SUJHAV MANANE HI TO HAI.
    THANKS
    ALOK JAIN ADVOCATE LALITPUR UTTAR PRADESH

  15. deepak sareen says:

    i m totally agree with u . tds date should be same for goct. and other deductors it is abig problem to file the tds returns in hill states

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