Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax at source while making such payments. In addition to the deduction and payment of taxes to the credit of the government, there is also an obligation to file TDS returns, which would enable the deductee to claim the TDS deducted on his income.
The due dates for filing TDS statement are as follows:
15th of July for Quarter 1
15th of October for Quarter 2
15th of January for Quarter 3
15th of May for last quarter
Consequences of TDS defaults
Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):
|Default/ Failure||Section||Nature of Demand||Quantum of demand or penalty|
|Failure to deduct tax at source||201(1)||Tax demand||Equal to tax amount deductible but not deducted|
|201(1A)||Interest||@1 % p.m. of tax deductible|
|271C||Penalty||Equal amount of tax deductible but not deducted|
|Failure to deposit tax at source||201(1)||Tax demand||Equal to tax amount not deposited|
|201(1A)||Interestemail@example.com% p.m. of tax not deducted|
|276B||Prosecution||Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine|
|Failure to apply for TAN No. u/s 203A||272BB||Penalty||Rs. 10000|
|Failure to furnish prescribed statements u/s 200(3)||272A(2)(k)||Penalty||Rs. 100 every day during which the failure continues subject to maximum of TDS amount|
|Failure to issue TDS certificate u/s 203||272(A)(g)||Penalty||Rs. 100 every day during which the failure continues subject to maximum of TDS amount.|
|Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C)||272(A)(i)||Penalty||Rs. 100 every day during which the failure continues subject to maximum of TDS amount|
|Failure to mention PAN of the deductee in the TDS statements and certificates||272B||Penalty||Rs. 10000|
If TDS return is not filed within the specified due dates being 15th July, 2013 for the 1st quarter corresponding to FY 2013-14, the major consequences would be levy interest.
However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.
Persons responsible to deduct TDS are mainly:
- Principal Officer of a company for TDS purpose including the employer in case of private employment or an employee making payment on behalf of the employer.
- DDO (Drawing & Disbursing Officer), In case of Govt. Office any officer designated as such.
- In the case of “interest on securities” other than payments made by or on behalf of the Central govt. or the State Government, it is the local authority, corporation or company, including the Principal Officer thereof.
Such person is called Deductor while the person from whom the tax is deducted is called Deductee.
Tax must be deducted at the time of payment in cash or cheque or credit to the payee’s account whichever is earlier. Credit to payable account or suspense account is also considered to be credit to payee’s account and TDS must be made at the time of such credit.
Responsibilities of the Deductor
- A Deductor is required to a obtain TAN in order to deduct taxes.
- He should obtain PAN of the deductee and deduct tax at the correct rate
- The taxes do deducted has to be deposited to the designated banks within specified time limit in the following manner:
- By or on behalf of the Govt. – on the same day
- By or on behalf of any other person – before 7th of the following month
However, if the amount is credited in the books on 31st March then the tax should be remitted by 30th April and the TDS return needs to be filed by 15th May.
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