The provisions of section 206C of the Income Tax Act, 1961 mandates the specified categories of the seller to collect the tax (i.e. TCS) from the specified categories of the buyer, of the specified goods, at the given specified rates. In case the specified seller fails to collect the TCS, then for such failure, he would be liable to pay the penalty under section 271CA of the Income Tax Act.

Topics like the provisions of section 271CA; ways to avoid the penalty under section 271CA; and the amount payable as a penalty under section 271CA are taken up and explained in the current article.

Provisions of section 271CA of the Income Tax Act

The gist of penalty provisions of section 271CA is being explained here under –

  • The section 271CA applies to the person who has failed to collect the tax at source (i.e. TCS); and
  • The penalty under section 271CA can be imposed only by the Joint Commissioner.

However, it should be noted that in case the defaulter proves the reasonable cause for the failure, then no penalty is leviable in terms of provisions of section 273B of the Income Tax Act.

The time period within which the TCS is to be collected –

As seen, the penalty under section 271CA gets attracted in case the seller fails to collect the TCS. Hence it is important to note the time period within which the TCS needs to be Collected.

As per provisions of section 206C (1), the specified seller is required to collect TCS within earlier of the following dates –

  • Date of debiting of an amount (payable by the buyer) to the account of the buyer; or
  • Date of receipt of the amount from the buyer via Cash / cheque / draft / any other mode.

How to avoid the penalty payable under section 271CA of the Income Tax Act –

In order to avoid the penalty, the seller (who are required to collect TCS as per provisions of section 206C) is required to collect tax (TCS) within the following prescribed time –

  • Earlier of the following dates –
    • Date of debiting the account of the buyer; or
    • Date of receipt of amount from the buyer via Cash / cheque / draft / any other mode of payment.

Further, even in case of default, if the seller proves the reasonable cause for the failure, then the penalty payable under section 271CA can be avoided.

Amount of the penalty payable under section 271CA of the Income Tax Act

In case of default, the defaulter is liable to pay the penalty under section 271CA to the extent of a sum equal to an amount of tax not collected.

Read Also:-

S. No. Title
1 Section 272BB Penalty for failure to comply section 203A provisions
2 Section 272B Penalty for failure to comply with provisions of PAN
3 Section 272AA Penalty for failure in complying with provisions of section 133B
4 Section 272A Penalty for failure to answer questions or furnish information / returns/ statements or allow inspections etc
5 Section 271J Penalty on professionals for furnishing incorrect information in reports / certificates
6 Section 271I Penalty for failure in furnishing Form 15CA & Form 15CB
7 Section 271H Penalty for late filing/non-filing of TDS or TCS return
8 Penalty for failure in furnishing report or furnishing inaccurate report under section 286 – Section 271GB
9 Section 271GA Penalty for failure in furnishing the information / document in Form 49D as required under section 285A
10 Section 271G Penalty for failure to furnish information / document as per provisions of section 92D
11 Section 271FB Penalty for default in furnishing return of fringe benefits
12 Section 271FAB Penalty for failure to furnish statement / information / document by an eligible investment fund
13 Penalty for providing inaccurate statement of financial transaction or reportable account- Section 271FAA
14 Section 271FA Penalty for failure in furnishing statement of financial transactions or reportable account
15 Section 271E Penalty for contravening provisions of section 269T
16 Section 271DB | Penalty for contravening provisions of section 269SU
17 Section 271DA Penalty for contravening provisions of section 269ST
18 Section 271CA Penalty for failure to collect tax at source (TCS)
19 Section 271D Penalty for contravening provisions of section 269SS
20 Section 271C Penalty for failure / non-deduction / non-payment of TDS
21 TDS Rate Chart for AY 2020-21 and AY 2021-22
22 Section 271BA Penalty for failure to furnish section 92E report
23 Section 271B Penalty for failure to get accounts audited
24 Section 271AAC Penalty in respect of certain specified income
25 Section 271AA Penalty for failure to maintain Transfer Pricing documents
26 Section 271A Penalty for failure to keep / maintain or retain books of accounts, documents
27 Section 270A(1) Penalty for under-reporting & misreporting of income
28 Section 269SU Acceptance of payment through electronic modes
29 Section 234F Late fees for default in filing of income tax return
30 Section 234E Late Fee for default in filing of TDS / TCS returns
31 Section 158BFA(2) – Penalty on undisclosed income for block period
32 Section 140A(3) Penalty for non-payment of self-assessment tax

Author Bio

More Under Income Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2020
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031