Updated on: 5th August, 2023
TDS stands for Tax Deducted at Source. It is a system where the payer of an income, such as salary, rent, or interest, deducts tax from the payment and deposits it to the government. The deductee is then responsible for paying the remaining amount of tax to the government. TDS filing is the process of reporting the amount of TDS that you have deducted and deposited to the government. You need to file TDS returns on a quarterly basis.
Key Takeaways
- There are different TDS return forms that can be used, depending on the nature of the deductor and deductee.
- The due dates for filing TDS returns vary depending on the quarter.
- If the TDS report is not submitted within one year of the given deadline, a minimum penalty of ₹10,000 that can go up to ₹1,00,000 can be imposed.
- If a person fails to collect or deposit TCS to the government within the prescribed due dates, they are liable to pay interest on the TCS amount.
An employer’s TDS compliance requirements do not end when tax is deducted from payroll deductions. For tax collected from wages, an employer must file quarterly TDS reports. TDS Return is a quarterly report that deductors send to the tax department. It lists all TDS-related exchanges for a given quarter. The filing process, though, is not as simple as it appears. Any misstatement or misrepresentation of facts might result in a notification from the income tax authorities. When it comes to TDS, most people appear to be concerned with TDS refund claims, TDS on insurance, and TDS on premiums. While each has its own relevance and benefit in the tax world, the TDS penalty is also something to consider. This blog will guide you through the types of TDS forms, payment due dates and late filing penalty for TDS.
Forms for Filing TDS Returns
There are different TDS return forms that can be used, depending on the nature of the deductor and deductee. The most common forms are:
Form 24Q
When it comes to TDS, Form 24Q is one of the most critical components for filing a TDS return on time. This form is used to file a quarterly statement of TDS deducted from salaries. It is filed by employers to notify the details of TDS deducted and deposited on behalf of their employees. Both online and offline submissions are accepted for Form 24Q, which is divided into two sections:
Annexure 1 of Form 24Q
Employers, workers, and tax deducted and submitted in a quarter are all listed here, and for each of the four quarters of the fiscal year, companies provide details under this part of the form.
Annexure 2 of Form 24Q
Here, the employees’ salaries are listed. Annexure 2, together with compensation information for the whole year, must be presented in the fourth quarter of the financial year.
Form 26Q
This form is used to file a quarterly statement of TDS deducted for non-salary payments. It is filed by individuals or entities responsible for deducting TDS on payments like rent, professional fees, or contract payments.
Form 27Q
This form is used to file a quarterly statement of TDS deducted for payments to non-resident Indians (NRIs) and foreign entities. It is filed by people or entities who make payments to foreign entities or NRIs and deduct TDS on such payments.
TDS/TCS Returns Late Filing Penalty
No matter how punctual you are, there can be scenarios where you are late for filing your TDS/TCS return. In that case, you are required to abide by the penalty rules set by the Income Tax Department. Take a look at the penalties for late filing of TDS/TCS returns:
Section 276B and Prosecution
Suppose you fail to pay to the Central Government’s credit. In that case, you can be punished with harsh imprisonment for a time not less than three months and not more than seven years with a penalty for the tax deducted at source as necessary by or under the requirements of Chapter XVII-B.
Section 234E and Late Fee
A penalty of ₹200 per day will be imposed if the TDS report is not submitted on time. If you miss filing Form 26 QB, which is a challan cum statement in the instance of immovable property acquisition, you may be fined. The total TDS made must not exceed the total TDS late filing fees for the quarter.
Section 271H and TDS Penalty Amount
If the TDS report is not submitted within one year of the given deadline by the government for the TDS return, a minimum fine of ₹10,000 that can go up to ₹1,00,000 can be imposed. This penalty would be in addition to the late filing charge imposed by section 234E.
TDS Penalty Exception to Section 271H
Section 271H also covers incidents of submitting inaccurate TDS/TCS returns by providing wrong information in the statement submitted, such as PAN, Challan, and TDS Amount. A minimal penalty of ₹10,000 that can be increased to ₹1,00,000 can be imposed.
In order to get the most out of your TDS return, it is critical that you do not miss any deadlines in order to avoid prosecution and penalties.
What is the Penalty for Late Payment or Non-Payment of TCS?
If a person fails to collect tax at source (TCS) or collects TCS but fails to deposit it to the government within the prescribed due dates, they are liable to pay interest on the TCS amount. The interest rate is 1% per month or part thereof. The tax collector is accountable for paying interest from the date on which the tax was collectable to the date the tax was actually paid.
For example, if a person fails to deposit TCS of ₹10,000 within the due date, they will be liable to pay interest of ₹100 per month. The interest will continue to accrue until the tax is actually paid. The interest on late TCS payments is in addition to any penalty that may be imposed by the Income Tax Department.
Due Dates of Filing a TDS Return
To file your TDS returns on time without any hassle and fear of overlooking deadlines, you must be mindful of the due dates of filing TDS returns. The below table shows the due dates for the financial year 2023-2024 that must be considered for filing returns on time.
Quarter Ending
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Last Date of Filing
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30 June 2023
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31st July 2023
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30 September 2023
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31st October 2023
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31 December 2023
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31st Jan 2024
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31 March 2024
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31st May 2024
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Wrapping it Up
TDS is an important compliance requirement for employers and other deductors. It is important to file returns on time and accurately to avoid a TDS penalty for late payment. The penalties for late filing or inaccurate TDS returns can be significant, so it is important to take the time to get it right. Filing these taxes on time can help build a strong financial profile that can be helpful in the future. So always file your returns on time to avoid any penalties and benefit from the different schemes provided by the government.
FAQS
Yes, TDS is deducted from salaries each month. As per Section 192, the employer will deduct TDS from the employee’s salary at the time of payment. Since the employee receives a salary each month, the employer will deduct TDS from the employee’s pay each month.
1
How is TDS calculated on salary?
The amount of TDS deducted from salary is calculated by applying the applicable TDS rate to the payee’s salary. The TDS rate depends on the payee’s income slab.
2
Can I file a TDS return after the due date?
Yes, you can file a TDS return after the due date. However, you may have to pay a penalty for late filing. The penalty for late filing is typically 2% of the TDS amount that was not filed on time.
