What is Section 271H of Income Tax?
Section 271H of the Income Tax Act states the provisions for delay in filing TDS and TCS returns. As per section 271H, if a taxpayer fails to file Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) returns on time, then he is required to pay a penalty or fine from Rs. 10,000 to Rs. 1,00,000. Further, they are also required to pay a fine of Rs. 200 per day of delay in filing the return.
Applicability of Section 271H of the Income Tax Act
The penalty provisions of Section 271H are applicable in the following scenarios -
- The deductor fails to submit the TDS return within the specified time frame.
- The collector fails to submit the TDS return by the specified time frame.
- The deductor furnishes wrong information while filing the TDS Return.
- The collector provides incorrect information while filing the TCS Return.
What is the Time Limit for Filing TDS Return?
If you want to avoid the penalty under section 271H, you must file your TDS return within the following time limit -
| Period |
Due Date |
| April - June |
31st July |
| July - September |
31st October |
| October - December |
31st January |
| January - March |
31st May |
What is the Penalty for Late Filing of TDS/TCS Returns?
As per section 271H of the Income Tax Act, if the taxpayer fails to file Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) returns on time, then the penalty provisions of section 271H are applicable. In such a case, he/she is required to pay a fine which can range between Rs. 10,000 and Rs. 1,00,000. Further, they must also pay a fine of Rs. 200 per day of delay in the filing of the return.
Exceptions to Penalty Under Section 271H
The penalty under section 271H cannot be applied if the following conditions are satisfied -
- The TDS or TCS is paid to the credit of the government.
- The deductor or collector has paid the late filing fees and the applicable interest to the credit of the government.
- The TDS/TCS return is filed before the expiry of the due date of filing such returns.
Note: Section 273B of the Income Tax Act states that if the defaulter (deductor/ collector) provides a valid and reasonable cause for the delay or failure in return filing, then any penalty under section 271H cannot be levied.
Amendment to Section 271H: Budget 2024
In Budget 2024, sub section (3) of section 271H. This amendment reduced the penalty-free period for late filing of TDS/TCS returns from 1 year to 1 month. This amendment will come into effect from 1st April 2025. This amendment aims to resolve the issues faced by the deductees due to the late filing of TDS/TCS returns by ensuring that the returns are filed on time.
TDS Deduction
In India TDS deductors are required to obtain TAN registration and deduct TDS on certain types of income. Any person deducting TDS must fulfill the following conditions -
- Obtain a Tax Deduction Account Number or a Tax Collection Account Number and quote the number in the documents associated with TDS/TCS.
- Deduct or collect tax at source at the applicable tax rates.
- Credit the atx collections and deductions to the government.
- File the TDS/TCS returns periodically on time.
- Issue TDS or TCS certificates in respect of tax deductions or collections.
It is important to ensure that you file your TDS/TCS returns on time to avoid penalties under section 271H. The ITR filing season is about to begin, and planning your ITR filing well in advance can ensure you don’t miss out on potential deductions and avoid penalties and notices. Pre-book your ITR Filing Now and enjoy a relaxed, accurate, and timely ITR filing journey.
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