Every taxpayer from whom TDS has been deducted will be required to file a TDS return with the IRS. They must be filed at specific intervals of time, and the information that must be submitted to the income tax authorities includes the TAN (Tax Deduction and Collection Account Number), the amount of tax deducted, the Permanent Account Number (PAN), the amount of TDS paid, the type of payment, and other pertinent information. There are late filings costs associated with TDS returns that must be paid, so it is critical to remember the due dates, or else you have to pay penalties as compensation.
TDS Return Due Date
If you would want to know more about the exact TDS return due date, you may refer to the table provided in this section. The deadline for filing a late or revised income tax return for the fiscal year 2020-21 is December 31st, 2019. But at present, this deadline of TDS return due date extended to Jan 31, 2022.
TDS Return Filing Due Dates for FY 2021-22:
|Quarter||Period||Last Date of Filing|
|1st Quarter||1st April to 30th June||31st July 2021|
|2nd Quarter||1st July to 30th September||31st October 2021|
|3rd Quarter||1st October to 31st December||31st Jan 2022|
|4th Quarter||1st January to 31st March||31st May 2022|
PENALTY on TDS
TDS ensures the timely payment of tax on the part of the income generator, but not on the part of the person who deducts the tax from the income generated. For example, if an employer deducts tax on an employee’s behalf, it implies that the employee has paid the tax, but it does not imply that the employer has paid the same amount of tax. As a result, the importance of penalties and late payment fees becomes apparent.
In our daily lives, we come across terms like late payment fees, fines, and so on when it comes to pending invoices or outstanding payments. Similarly, the Income Tax Department (ITD) applies a penalty or late payment fee to an individual who violates the IT legislation or is unable to complete his or her tax responsibilities on time. As a result, these persons suffer fines and interest if they do not pay their taxes on time.
Similarly, suppose a deductor or employer who deducts TDS (Tax Deducted at Source) from an employee’s income fails to pay TDS to the government on time or fails to submit required tax documents to the IT department on time. In that case, the deductor or employer becomes liable for penalties for late or non-payment of TDS.
Late payment costs or penalties placed on the deductor for late submission of quarterly TDS/TCS returns to the ITD are addressed under Section 234E of the Income Tax Act, which took effect on July 1, 2012.
- The deductor is required to pay a Rs.200 penalty for each day that TDS is not paid in accordance with Section 234E of the Income Tax Act; however, the penalty amount cannot exceed the amount of TDS deducted in accordance with this section.
- If erroneous information is supplied, such as an invalid PAN number or an inaccurate tax amount, a penalty of between Rs.10,000 and Rs.1 lakh would be charged, among other things.
If you fail to file your TDS/TCS returns by the due date, you will not be assessed a penalty under Section 271H of the Income Tax Act, provided that the following requirements are satisfied:
- The TDS/TCS is credited to the government’s account after it has been collected.
- The TDS/TCS return filing must be completed before the expiration of one year from the original due date.
- It has been paid to the government’s credit, together with any interest and late filing costs (if any).
INTEREST on TDS
Interest will be levied in addition to the penalty, which will be added on top of it. The interest is due and payable by the taxpayers before the filing of the TDS return is completed. Section 201 A of the Code of Civil Procedure contains the specifics on interest rates.
The interest rate on late payments of advance tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, and STT and CTT will be reduced to 9 percent instead of 12 percent /18 percent per annum between 20th March 2020 and 30th June 2020 (i.e. 0.75 percent per month instead of 1/1.5 percent per month) between 20th March 2020 and 30th June 2020. In the event of such delays, the absence of late fees or penalties will be greatly appreciated. TDS/TCS is liable for the following interest liabilities on payments made or not made inappropriate amounts after June 30, regardless of whether the payments were made or not made:
Whenever part or all of a tax is not deducted at the source, a monthly interest rate of one percent (one percent per month) is applied to the TDS/TCS amount. The interest term begins on the date the tax was deductible and ends on the actual date of deduction
A 1.5 percent per month interest rate is imposed on the amount of TDS/TCS that remains unpaid if any part or all of the tax is not paid within the interest term, which begins on the day of deduction and ends on the day of payment.
Late payment of TDS after deduction requires payment of interest at the rate of 1.5 percent per month (from the date of deduction to the actual date of deposit).
If you have failed to update the TDS on time and require paying an Interest, always keep these in mind;
- In order to compute the interest, the number of months must be divided by the number of days in the month in question. Therefore, a portion of a month will be treated as a whole month.
- It is calculated on the basis of the date from which TDS was deducted rather than the date on which the TDS was due for the amount of TDS that owes.
Example: If an individual’s TDS payable amount is Rs.7,500 and the date on which it was deducted is January 14, and the TDS is paid on May 18, the interest charged to the individual will be Rs.7,500 x 1.5 percent per month x 5 months = Rs.562.5.
LATE FEE on TDS
Section 234E requires payment of a late fee of INR.200 per day to the Income Tax Department in the event of late filing of TDS/TCS returns. The fine is charged for each day of delay until the late payment costs equal the amount of TDS and not more.
Example: Assume that your payable TDS amount is Rs 5000 on the 13th of May and that you file your Q1 return on the 17th of November instead of the 31st of July, which is the due date. The delay is 105 days if the 17th of November is taken into consideration. As a result, the computation comes out to Rs 200 multiplied by 105 days equals Rs 21,000, but while this amount is more than Rs 5000, you will only be required to pay Rs 5000 as the late filing charge. In addition to this, you will be charged interest for any time spent delaying the deposit of TDS.