- Date : 21/10/2021
- Read: 4 mins
Paying your taxes on time will ensure that you do not have to pay the penalty. Penalties on late payment or non-payment of taxes can lead to severe retributions. The Government has offered some relaxation with regard to the payment of taxes in the wake of the pandemic.
The last date for filing taxes has been constantly extended for the convenience of taxpayers during the pandemic. Amid lockdowns and lower growth, companies have been struggling to stay abreast with the tax norms and tax payment deadlines. Before we look at the penalties applicable, let us look at the TDS (tax deducted at source)/TCS (tax collected at source) return filing dates that have been relaxed in view of the ongoing pandemic.
Related: Coronavirus Pandemic: Govt To Provide Relief To Employees And Firms
TDS due date for filing returns for FY2021-22
TCS due date for filing returns for FY2021-22
After uploading TDS/TCS returns, the TDS/TCS certificate can be generated after 15 days of filing.
Related: New TDS/TCS Rules in India From July 1; Here's How You Can Effectively Avoid It
TDS and TCS challan deposit due dates for FY2021-22
TCS has to be deposited latest by the 7th of the subsequent month for government and non-government deductors.
For non-government deductors, TDS is supposed to be deposited by the 7th of the subsequent month. However, there is a relaxation in March where the due date is 30th April, citing that March could be hectic due to book closure.
For government deductors, the due date for depositing TDS depends on the payment mode.
- Challan payment – 7th of the subsequent month
- Book-entry – the same day of TDS deduction
Penalties on TDS/TCS return filing after the due date for FY2021-22
The IT department charges a penalty or late payment fee on the individual/entity who has not complied with the Income Tax law. The penalty is in the form of a flat fee and interest for the period of lapse and the amount to be filed.
If the deductor or the employer has deducted the TDS from the employee's income but failed to submit or deposit the TDS with the Government or fails to file returns on time, the employer or deductor will be liable for the penalty for late or non-payment of TDS.
Section 234E of the Income Tax Act deals with penalties and late payment fees. This section was introduced on 1 July 2012. As per Section 234E, the penalty or late payment fine is levied at Rs 200 per day for every single day elapsed after the due date. This late payment fee cannot exceed the actual TDS/TCS amount.
Related: Income Tax In India: An Interesting History
Let us understand this with an example. If the TDS amount is Rs 1000 and is due on 7 March but is paid on 7 June instead, the fine is calculated for 92 days (from 8 March to 7 June) = 92 x 200 = Rs 18,400. This fine amount is higher than the TDS amount due, so the penalty would be restricted to Rs 1000.
In addition to this, there can be an additional penalty under section 271H that the Assessing Officer can levy. This is directed at the individual/entity who fails to file the statement of TDS within the due date. The minimum penalty is Rs 10,000 and the maximum being Rs 1 Lakh. This section also covers the incorrect filing of TDS returns.
However, in some cases, penalty under section 271H may not be levied - when TDS/TCS is paid to the credit of the Government, late filing fees and penalties are duly paid to the credit of the Central Government, and TDS/TCS return is filed before the expiry of a period of 1 year from the due date specified.
Interest on TDS/TCS due for FY2021-22
In addition to the penalty, there is an interest charged from the date on which the TDS was deducted and not from the date on which TDS is due. The interest rates are as mentioned in Section 201A. The interest has to be paid before filing the
Prosecution u/s 276B for FY2021-22
If the person/entity fails to pay to the credit of the Central Government the TDS as required under the provisions of Chapter XVII-B, the individual(s) may be punishable for such offense through imprisonment for a term not less than 3 months, but it can extend to 7 years along with a fine.
The penalties and interest charged often are quite high, and the legal implication of not complying with the Income Tax laws can be severe. As law-abiding citizens, it is our responsibility and primary duty to abide by the country’s law and order.
The last date for filing taxes has been constantly extended for the convenience of taxpayers during the pandemic. Amid lockdowns and lower growth, companies have been struggling to stay abreast with the tax norms and tax payment deadlines. Before we look at the penalties applicable, let us look at the TDS (tax deducted at source)/TCS (tax collected at source) return filing dates that have been relaxed in view of the ongoing pandemic.
Related: Coronavirus Pandemic: Govt To Provide Relief To Employees And Firms
TDS due date for filing returns for FY2021-22
TCS due date for filing returns for FY2021-22
After uploading TDS/TCS returns, the TDS/TCS certificate can be generated after 15 days of filing.
Related: New TDS/TCS Rules in India From July 1; Here's How You Can Effectively Avoid It
TDS and TCS challan deposit due dates for FY2021-22
TCS has to be deposited latest by the 7th of the subsequent month for government and non-government deductors.
For non-government deductors, TDS is supposed to be deposited by the 7th of the subsequent month. However, there is a relaxation in March where the due date is 30th April, citing that March could be hectic due to book closure.
For government deductors, the due date for depositing TDS depends on the payment mode.
- Challan payment – 7th of the subsequent month
- Book-entry – the same day of TDS deduction
Penalties on TDS/TCS return filing after the due date for FY2021-22
The IT department charges a penalty or late payment fee on the individual/entity who has not complied with the Income Tax law. The penalty is in the form of a flat fee and interest for the period of lapse and the amount to be filed.
If the deductor or the employer has deducted the TDS from the employee's income but failed to submit or deposit the TDS with the Government or fails to file returns on time, the employer or deductor will be liable for the penalty for late or non-payment of TDS.
Section 234E of the Income Tax Act deals with penalties and late payment fees. This section was introduced on 1 July 2012. As per Section 234E, the penalty or late payment fine is levied at Rs 200 per day for every single day elapsed after the due date. This late payment fee cannot exceed the actual TDS/TCS amount.
Related: Income Tax In India: An Interesting History
Let us understand this with an example. If the TDS amount is Rs 1000 and is due on 7 March but is paid on 7 June instead, the fine is calculated for 92 days (from 8 March to 7 June) = 92 x 200 = Rs 18,400. This fine amount is higher than the TDS amount due, so the penalty would be restricted to Rs 1000.
In addition to this, there can be an additional penalty under section 271H that the Assessing Officer can levy. This is directed at the individual/entity who fails to file the statement of TDS within the due date. The minimum penalty is Rs 10,000 and the maximum being Rs 1 Lakh. This section also covers the incorrect filing of TDS returns.
However, in some cases, penalty under section 271H may not be levied - when TDS/TCS is paid to the credit of the Government, late filing fees and penalties are duly paid to the credit of the Central Government, and TDS/TCS return is filed before the expiry of a period of 1 year from the due date specified.
Interest on TDS/TCS due for FY2021-22
In addition to the penalty, there is an interest charged from the date on which the TDS was deducted and not from the date on which TDS is due. The interest rates are as mentioned in Section 201A. The interest has to be paid before filing the
Prosecution u/s 276B for FY2021-22
If the person/entity fails to pay to the credit of the Central Government the TDS as required under the provisions of Chapter XVII-B, the individual(s) may be punishable for such offense through imprisonment for a term not less than 3 months, but it can extend to 7 years along with a fine.
The penalties and interest charged often are quite high, and the legal implication of not complying with the Income Tax laws can be severe. As law-abiding citizens, it is our responsibility and primary duty to abide by the country’s law and order.
