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Penalty For Late & Non Filing Of TDS Returns

Posted on September 30 2020


Every deductor, who deduct the TDS on behalf of a payee has the duty to deposit the TDS within the prescribed limit to the account of Income Tax department as per the rules by the Income Tax Act. Section 200 of the Income Tax Act relates to the deposit made in many ways.
Where a person fails to deduct or pay the tax then he will be subjected to pay the penalties as per the income tax act.
Interest on Late Payment or Non Deduction of TDS
When fails to deduct the TDS at 1% p.m. from the date the tax was deductible to the date on which such tax is deducted.
When fails to deposit the TDS at 1.5% p.m. from the date on which such tax is deducted to the date on which such tax is actually
According to the Income Tax Act, the interest is not a penalty so it cannot be allowed. The payment should be paid for the failure or for the late deposit of the TDS.
Penalty or Fee for Late filing of TDS Returns
Where a person fails to submit the TDS returns with the time, he will be subjected to pay a sum of Rs. 200 for every single day during which the failure continues. (u/s 234E)
Therefore, the amount of the fee or the penalty will not cross the amount of tax deductible.
For example: If the penalty/fee is Rs. 3000 but the TDS is Rs. 2000, you will have to pay Rs.2000.
Penalty or Fee for Non-Filing of TDS Return
If a person fails to submit the TDS return or submit the incorrect returns then he will have to pay Rs. 10,000 which will extend up to Rs.1,00,000. (u/s 271H)
Therefore, the above penalty u/s 271H will not be exacted in the following cases.
If the person proves that he paid the TDS along with the interest and the fees.
If the person proves that he has submitted the TDS return before the expiry of a period of 1 year from the time for delivering such TDS return.
TaxAssist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.


With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.

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