Budget 2023 Update
TDS on income from gaming was introduced under section 194-BA.
Non-residents having income from Mutual Funds in India can provide a Tax Residency Certificate to avail of the TDS benefit as per the tax treaty instead of being taxed at 20% from 1st April 2023.
Under section 192A, the TDS rate was reduced to 20% from the maximum marginal rate on withdrawal of PF for employees without PAN.
Under section 193, no exemption will be granted on TDS on interest on listed debentures.
The cash withdrawal threshold by cooperative societies was increased under section 194N. The new threshold is Rs.3 crore and came into effect on 1st April 2023.
There are multiple TDS forms depending on the income of the deductee or the type of deductee paying taxes
| Form No. |
Particulars |
| Form 24Q |
This form acts as a Quarterly TDS statement for tax deducted on salary. |
| Form 27Q |
Relevant for Quarterly TDS statement for tax deducted on payments, except salary, to non-resident (which is not a company) and foreign company. |
| Form 26Q |
Quarterly TDS statement for TDS deducted on professional fees, interest payments, etc. |
A challan-cum-statement in forms 26QB and 26QC is applicable if tax is deducted at source under sections 194-IA and 194-IB. The deductor is required to provide the challan-cum-statement within 30 days from the last date of the month in which the tax was deducted.
Penalty For Late Filing Of TDS/TCS Returns
If there is a delay in filing the TDS returns or you fail to file your TDS return by the TDS return due date, you might have to pay a penalty.
Late Filing Fee (Section 234E)
As per section 234E of the Income Tax Act, the person who is required to or responsible for collecting and depositing TDS/TCS has to pay a penalty of Rs.200 per day until the day when the TDS return is filed or until the time the penalty amount becomes equal to the TDS amount.
For example -
If you have deducted Rs.10,000 on 13th May, and you miss the TDS return due date, file the TDS return on 13th Nov for the first quarter. Since the TDS return due date is July 31st, the delay in TDS return filing will be 109 days.
Now, Total TDS penalty Amount - 200*109 = Rs.21,800
The penalty amount is greater than the total TDS deducted, i.e., Rs.10,000. Therefore, you will only have to pay Rs.10,000 as a penalty.
Penalty (Section 271H)
Any individual or a person who fails to file a TDS return by the due date, on the order of the government, may be required to pay a penalty of Rs.10,000 under section 271H. This amount can be extended to Rs.1,00,000. The penalty levied under this section has to be paid along with that mentioned in section 234E.
However, there are certain exceptions to the applicability of section 271H -
- If the tax collected or deducted is paid to the credit of the government
- Late filing interest or fees that are paid to the government’s credit.
- If the TDS/TCS is filed before the completion of 1 year from the TDS return due date.
Prosecution
If the deductor fails to pay the amount to the credit of the Central Government, as per the provisions of Chapter XVII-B, then such a person can get rigorous imprisonment for a minimum of 3 months and a maximum of 7 years, along with a fine.
What is the Interest on Late Deposit of TDS?
- If the TDS has not been deducted (fully or partially), then an interest of 1% per month is leviable on the TDS/TCS amount from the date on which tax was supposed to be deducted to the date on which it is actually deducted.
- If the TDS has been deducted but not deposited with the government, then an interest of 1% per month on the TDS/TCS amount will be leviable from the date of deducting the tax to the date of depositing it.
So, the tax deductor must submit the TDS to the government by the seventh day of the next month. Every assessee whose Tax Deducted at Source (TDS ) has been deducted will have to file his/her TDS return. Connect with our tax experts for help in TDS payment and TDS filing.
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