- TG Team
- | Income Tax - Articles
- 24 Jul 2018
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Nowadays delay in payment of TDS and in TDS return Filing makes an assessee liable to Late Payment Interest, Late Payment Penalty, Late Filing Fees, Late Filing Penalty and Further makes him liable to prosecution under the provision of the Income Tax Act, 1961. In this article we are discussing some of these provisions which makes it clear that TDS cannot be taken lightly and we should take utmost care in timely payment of TDS and filing of TDS return.
Page Contents
- 1. TDS payment and Return Filing
- 2. Due Date chart for payment of TDS
- 3. Due date of filing of TDS return
- 4. Late TDS Return filing consequences
- 5. Due date for furnishing TDS certificate
- 6. TDS chart for the F.Y. 2018-19
- 7. TDS Rates on Payments other than Salary and Wages to Residents/Non-Resident
- 8. Consequences of TDS defaults
- 9. Request for TDS Refund
1. TDS payment and Return Filing
The provision of TDS is getting stringent and from now it is becoming very necessary for all to comply the same and understand the importance of TDS.
As per the provision of TDS is to be deducted on payment or credit whichever is earlier. So for e.g. If bill date is 15/4/18 amounting to Rs. 25000/- but advance payment is made on 05/04/2018 amounting to Rs. 85,000/- than TDS has to be deducted on Rs. 85,000/- on 05/04/2018 and to be paid either on same day or next day. Though the due date of payment is 7th of next month but that is not to be considered as due date, it is just grace days provided by department for the convenience of the assessee. Hence as soon as you deduct TDS it has to be paid. Even if we pay the TDS on 7th,the challan would get process with 24-48 hours as per banking terms. Hence as per Income tax department the date would not be considered as 7th but it would 8th or 9th as per the bank processing. Hence late payment interest would be charged for 2 months i.e. from date of deduction to date of payment.
If TDS is paid after 7th, Interest is charged at 1.5% p.m. (18% p.a.) from date of deduction till date of payment. For e.g. if TDS is deducted on 15th April and paid on 9th May than interest would be calculated for 2 months i.e. April and May. Hence, it is advisable to pay TDS on date of deduction itself rather than waiting for 7th of next month for payment. It is from now compulsory to pay online TDS for all corporate assessee and person other than corporate but covered under section 44ab(compulsory Tax audit) .Hence if the assessee does not have online payment facility kindly get the same.
2. Due Date chart for payment of TDS
| S. No. | Particulars | Due Date |
| 1 | Tax Deductible in March | 30th April |
| 2 | Other Months and Tax opted to be deposited by the employer | 7th of next month |
Even if PAN is incorrect, TDS @ 20% needs to be deducted. Hence, always take PAN copy of the party and file return. Now, only 2 digits and 2 letters of PAN are allowed to be changed in revised return which would cause more difficulties as if whole PAN is in correct it would be difficult to change the same. Hence from now it is advisable that PAN copies is taken from all clients and then send all details.
3. Due date of filing of TDS return
| Quarter | Form Nos. 24Q & 26Q | Form No. 27Q | Form No. 27EQ |
| April to June | 31st July | 31st July | 31st July |
| July to September | 31st October | 31st October | 31st October |
| October to December | 31st January | 31st January | 31st January |
| January to March | 31st May | 31st May | 31st May |
However the above due date shall not apply to Form 26QB/26QC as in these cases challan of electronic deposit of TDS is itself considered as return.
4. Late TDS Return filing consequences
a. Fees for delay in furnishing the statements: (section 234E of Income Tax Act)
Effective from 1st July 2012, any delay in furnishing the eTDS statement will result in a mandatory fees of Rs. 200 per day, the total fees should not exceed the total amount of TDS made for the quarter. The late filing fee should be paid before filing such delayed eTDS statement.
b. Penalty for failure to furnish statements and furnishing incorrect statements: (section 271H of Income Tax Act)
Failure to file eTDS statement delaying more than an year or furnishing incorrect details in the statement filed like PAN, Challan and TDS Amount etc, will result in a penalty ranging from Rs. 10,000 to one lac.
5. Due date for furnishing TDS certificate
Due date for furnishing TDS certificate to the employee or deductee or payee is revised as under :
| Sl. No. | Category | Periodicity of furnishing TDS certificate | Due date |
| 1. | Salary (Form No.16) | Annual | By 15th day of June of the financial year immediately following the financial year in which the income was paid and tax deducted |
| 2. | Non-Salary (Form No. 16A) | Quarterly | Within fifteen days from the due date for furnishing the ‘statement of TDS’ |
Failure to issue TDS certificate within the time allowed, attracts penalty of Rs. 100/- per day of default (Sec 272A(2)(g)). However, penalty will not exceed the amount of tax deductible or collectible, as the case may be.
As per Circular No. 01/2012 dated 09.04.2012, it mandatory for all deductors to issue TDS certificate in Form No. 16A after generating and downloading the same from TRACES website.
6. TDS chart for the F.Y. 2018-19
| Section 192 | Payment of Salary and Wages |
| Criterion of Deduction | TDS is deducted if the estimated income of the employee is taxable.Employer must not deduct tax on non-taxable allowances like conveyance allowance, rent allowance, medical allowance and deductible investments under sections like 80C, 80CC, 80D, 80DD, 80DDB, 80E, 80GG and 80U.No tax is required to be deducted at source if the estimated total income of the employee is less than the minimum taxable income (Rs. 2,50,000/- in case of Individual, HUF, AOP, BOD and AJP) |
| TDS Rate | As per Income Tax, Surcharge and Education Cess rates applicable on the estimated income of employee for the year. |
| Section 192A(inserted wef june 2015) | Payment of Accumulated Balance Due of Employees’ Provident Fund Scheme,1952 to employees |
| Criterion of Deduction | Tax is to be deducted by the trustees of Employees’ Provident Fund Scheme,1952 or any other person authorised under the scheme to make such accumulated payments to employees and the amount of such payment is Rs 50,000 or more |
| TDS Rate | In case of Resident Payee-10%(no surcharge or health and education cess)
In case of Non-Resident-10%(will be increased by surcharge and health and education cess) |
7. TDS Rates on Payments other than Salary and Wages to Residents/Non-Resident
| Section | For Payment of | On Payments Exceeding | Individual / HUF | Others |
| 193 | Interest on Securities | Rs. 5000/-
However the limit is Rs 10,000 for the securities mentioned below: i) Any security of the central government/state government ii) 8% savings taxable bond,2003 iii) Wef 1st April,2018 on 7.75% savings (taxable) Bonds, 2018
|
10% | 10% |
| 194 | Deemed Dividend | Rs 2500 | 10% | 10% |
| 194 A | Interest other than on securities by banks | Rs. 10000/-
However this limit has been increased to Rs 50,000 wef 1st April 2018 if the payee is senior citizen. |
10% | 10% |
| 194 A | Interest other than on securities by others | Rs. 5,000/- | 10% | 10% |
| 194 B | Winnings from Lotteries / Puzzle / Game | Rs. 10,000/- | 30% | 30% |
| 194 BB | Winnings from Horse Race | Rs. 10,000/- | 30% | 30% |
| 194 C | Payment to Contractors / Sub-Contractors
|
Rs. 30000/- for single payment Rs. 1,00,000/- for aggregate payment during Financial Year |
1% | 2% |
| 194 D | Payment of Insurance Commission | Rs. 15,000/- | 5% | 10% |
| 194DA | Payment of Life Insurance Policy | Rs 100,000 | 1% | 1% |
| 194E | Payment to Non- Resident Sportsman / sports association/ entertainer | – | 20% | 20% |
| 194 EE | Payment of NSS Deposits | Rs. 2500/- | 10% | NA |
| 194 F | Repurchase of units by Mutual Funds / UTI | – | 20% | 20% |
| 194 G | Commission / Remuneration on Sale of Lottery tickets | Rs. 15,000/- | 5% | 5% |
| 194 H | Commission or Brokerage | Rs. 15,000/- | 5% | 5% |
| 194 I | Rent of Land, Building or Furniture | Rs. 180000/- | 10% | 10% |
| Rent of Plant & Machinery | Rs. 180000/- | 2% | 2% | |
| 194 IA | Transfer of Immovable Property (w.e.f. 01.06.2013) | Rs. 50 lacs or more | 1% | 1% |
| 194 IB
|
Payment made by the individual/Huf whose books of accounts are not required to be audit u/s 44AB in the immediately preceding financial year for rent on land or building to any resident .(w.e.f 1st june 2017) | Rs 50,000 per month or part of the month | 5% | 5% |
| 194 IC
|
Any person responsible for paying to a resident any sum by way of consideration( not being in kind)under a joint development agreement.
|
– | 10% | 10% |
| 194 J | Professional/ technical services, royalty | Rs. 30,000/- | i)10%
ii) 2% in case the payee is engaged in the business of operation of call centre |
1i)10%
ii) 2% in case the payee is engaged in the business of operation of call centre % |
| 194 J (1) | Any remuneration / fees / commission paid to a director of a company, other than those on which tax is deductible u/s 192. | – | 10% | 10% |
| 194 LA | Compensation / Enhanced compensation on acquisition of certain immovable property. | Rs. 2,50,000/- | 10% | 10% |
| 194 LB | Interest to non- resident by infrastructure | – | 5% | 5% |
| 194LBA | Income from units of business trust. TDS is applicable if a business trust distributes any income referred to in section section 115UA or to its unit holders being in the nature of Section 10(23FC) | – | 10% (for resident) and 5% (for non- resident) | 10% (for resident) and 5% (for non- resident) |
| Payment Received u/s 10(23FCA) – Rental Income received by the real estate distributed to the unit holders | – | 10%(for resident) and 30% (Surcharge + HEC) {for non- resident} | 10% (for Indian company) and 40% (Surcharge + HEC) {for foreign company} | |
| 194LBB | Payment of income in respect of units of Investment Fund | 10%(for resident) and 30%(Surcharge + HEC) {for non- resident} | 10%(for Indian company)and 40% (Surcharge + HEC) {for foreign company} | |
| 194LBC | Payment of income in respect of Investment Fund in securitization fund | i. 25% (for resident individual / HU F)
ii. 30% (Surcharge + HEC) for non resident other than foreign company.
|
i. 30-For resident
ii. 40% (Surcharge + HEC) for foreign company |
|
| 194LC | Payment of interest on (approved by C.G) amount borrowed in foreign currency during 01.07.2012 to 01.07.2020) by a specified company or business trust to NON-Resident/Foreign company | 5% (surcharge + HEC) | 5% (surcharge + HEC) | |
| 194LD` | Payment of interest To Foreign institutional Investors, qualified foreign investors between 01.06.2013 to 01.07.2020 | 5% (surcharge + HEC) | 5% (surcharge + HEC) |
Notes:
- No surcharge or education cess is deductible / collectible at source on payments made to residents {Individuals / HUF / Society / AOP / Firm / Domestic Company) on payment of incomes other than salary or wages.However if the recipient is non resident the rate of TDS will be increased by surcharge or health and education
- TDS at higher rate of 20% has to be deducted if the deductee does not provide PAN to the deductor.(section 206AA)
- All persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain Tax Deduction or Tax Collection Account Number (TAN).
8. Consequences of TDS defaults
Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):
| Default/ Failure Section Nature of Demand Quantum of demand or penalty | |||
| Failure to deduct tax at source | 201(1) | Tax demand | Equal to tax amount deductible but not deducted |
| 201(1A) | Interest | @1 % p.m. of tax deductible | |
| 271C | Penalty | Equal amount of tax deductible but not deducted | |
| Failure to deposit tax at source | 201(1) | Tax demand | Equal to tax amount not deposited |
| 201(1A) | Interest | @1.5% p.m. of tax not deducted | |
| 276B | Prosecution | Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine | |
| Failure to apply for TAN No. u/s 203A | 272BB | Penalty | Rs. 10000 |
| Failure to furnish prescribed statements u/s 200(3) | 272A(2)(k) | Penalty | Rs. 100 every day during which the failure continues subject to maximum of TDS amount |
| Failure to issue TDS certificate u/s 203 | 272A(2) | Penalty | Rs. 100 every day during which the failure continues subject to maximum of TDS amount. |
| Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C) |
272A(2) | Penalty | Rs. 100 every day during which the failure continues subject to maximum of TDS amount |
| Failure to mention PAN of the deductee in the TDS statements and certificates | 272B | Penalty | Rs. 10000 |
9. Request for TDS Refund
Now we can even get the refund of excess TDS paid by us in the following manner:
It is mandatory to register digital signature on TRACES to submit the refund request.
Request for refund can be submitted only if there is no outstanding demand against the TAN. Refund request can be submitted after total outstanding demand is closed.
A refund request can contain maximum of five challans. For claiming more challans, submit new request. Maximum refund amount will be the minimum challan balance amount in the challan history.
Available amount per challan must be greater than Rs.100/- Ensure that all statement in which the challan has been claimed have been processed before claiming refund for the challan.
Hence now it is becoming necessary to comply with the provisions of TDS timely and with extra care.
(Author may be contacted at [email protected])
(Republished With Amendments)
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I bought a under construction flat, whose value without GST is below Rs 50 Lacs, but value exceeds Rs 50 Lacs with GST.
Should I deduct 1% TDS ?
There is a CBDT circular which clarifies that TDS is to be deducted on amount excluding GST, if GST is indicated separately. While this circular clarifies the ‘quantum’ on which 1% TDS should be applied, but it is not clear whether or not GST should be excluded from consideration value for the purpose of scope TDS applicability (Rs 50 Lakhs threshold).
Could you please share your opinion with a case law or guidance note (if any) issued on this matter.
what reply i should give in case of my company has not deposited TDS and not issued form 16. I have filled return based on salary slips and i have received the intimation in tax U/S 143(1).
I have to give answer on website against the order. What should be the language to respond the notice.
Is interest charged if anyone deposited the cheque of tds as on 7th?
tds articale is very useful.
since AY 2005-2006 till 2012-2013 coca cola India pvt limited and Hindustan Coca cola brew ages p Ltd., has been depositing TDS into my PAN account amounting to Rs. around 5,70,000/-. Though I never has any kind of dealing with them. Please advice what action can be taken against them. On reporting the matter, they are trying to revise/rectify their TDS returns.
thanks
dear sir
we can submit the tds in same date of deduction.suppose we have due the tds in 7th may 2015 and submit in same day .
Thanks & Regards
Om Prakash
IF THE PAYMENT MADE ON 15th January, which due date for tds payment last date.
Dear Sir,
I have deducted and file tds and on that default i have paid interest in 2 part and all shown under the etds return but , in the justification report full interest is shown as not paid kindly suggest what to do.
Dear IT expert,
My father had provided certain valuation services, for which he was paid the basic amount w/o service tax amount with a promise that the same will be deposited @10%. same has not been done, which we came to know when our IT return for refund of the said TDS was turned down. the said person is not responding to mails and reminders. what action cane we take and make the said defaulter to book for the alleged cheating and fraud ?
anil;
Deat IT expert,
My father had provided certain valuation services, for which he was paid the basic amount w/o service tax amount with a promise that the same will be deposited @10%. same has not been done, which we came to know when our IT return for refund of the said TDS was turned down. the said person is not responding to mails and reminders. what action cane we take and make the said defaulter to book for the alleged cheating and fraud ?
anil;
If in my company salary day is 7th of the month then how much grace period we will get to deposit the TDS.
Thanks
if you have tax related query you can mail me at [email protected]. Answer will be given in 24 hours.
if sunday is coming on 7th day then tds will deposit on next day, pls.suggest.
manmohan
Thanks for detailed information on TDS
HOW TO CALCULATE TDS INTEREST?
Tanks for detailed information.
Hello Sir,
Is there any notification of I.T. Dept. in which it says that only 2 digits and 2 letters of PAN are allowed to be changed in revised return????
If yes pl share the notification number… It will be of great help to me… Thanks n advance….
thanks for given greatest information regarding tds….
we well show that important information to our client.
pls keep it on. Very useful detail.
Thanks for valuable information about TDS Provision .
Dear Sir,
Greetings of the day!!!
Your have explained the provisions of TDS in very simple and illustrative language. It rely help me in clearing my doubts.
Thanks & regards,
Nice Details o TDS FY 2013-14
Thanks Sir
Jigar
Dear Sir,
The provisions of TDS is also very tedious. However your article is good and properly explained.
Thanks
CA VINOD KUMAR GUPTA
for an HUF ac, if the interest income exceeds 2 lac, but there is a saving of 1 lac u/s 80C,than can the bank deduct tds and that too on the full amount of interest. Kindly enlighten and oblige. Thanks.
For senior citizens, they are not liable to pay advance tax till 31mar. Can a tenant deduct 10% tds on rental income of the senior citizen, if it exceeds 1,80,000/-. Kindly enlighten, please. thanks.
Sir pls solve my query
in q3 wrong data entered & filed, we have received a notice from tds dept for mis match of challan.actually in q3 there is no transactions liable for tds dedn but by mistake q3 return filed
now i m going for the revision, i m unable to delete the previous challan so what shall i do now?
pls suggest
dear sir is tds law apllicable with tcs ?
tcs rate for code 6CJ is 1%. IS 20% penalty for non providing of pan number is applicable in tcs?
you said the due date for paying the deductions made in the month of March is 30th of the following month.
BUT WE are GETTING notices – default notices from TRACES as if the due date for the deductions made in the month of March is also 7th of April.
In other forums like yours, I raised this ? . But no answer EXCEPT 1 professional saying that he met the TRACES officially personally………? !!!!
Please advise how to answer the faulty defaults notice / clarify
thanks
Dear Sir,
TDS Article is very useful, you have covered all tds related issues in the article.
Thanks