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Non-filing of TDS (Tax Deducted at Source) returns is a major compliance concern under the Income Tax Act of India. TDS is a technique that requires the payer to deduct a specific percent of tax from the payment made to the beneficiary and deposit it with the government. Failing to submit the TDS return file can lead to severe penalties and legal consequences. In this blog, we, as experts, will help you look at the penalty for not reporting TDS reports in 2024.

The income tax department of India has made it mandatory that all deductors file TDS returns on a quarterly or annual basis, depending on the type of deduction. The due dates for filing these returns are clearly stated, and any delay may result in penalties and interest costs. The penalties for not filing TDS returns are intended to encourage timely compliance and ensure effective tax collection.

Returns For TDS Can Be Filed In The Following Forms

The first thing to know is the forms through which you can apply for the TDS:
Form 24Q for the quarterly TDS record: Taxes taken out of salary payments.
Form 27 Q for the quarterly TDS record: Tax cut-offs while making transactions, excluding salary, to people who are not residents and overseas businesses.
Form 26Q for the quarterly TDS record: For other cases such as TDS cut-offs on interest payments and other fees that are professional, etc.

Know The Penalties For Non-Filing Of TDS Returns

The penalties for failing to file TDS returns in 2024 are determined by the requirements of the Income Tax Act of 1961 as well as the relevant rules and regulations. The fines differ based on the type of deductor, which includes corporations, individuals, or other entities, and the nature of the default.

Here are some of the key penalties that may be imposed:

• Late filing fee (Section 234E): If a deductor fails to file the TDS return by the required date, a late filing charge would be evaluated under Section 234E of the Income Tax Act. The late filing fees are determined as follows:
1. For delays of up to one month: Rs. 200 per day.
2. For delays exceeding one month: Rs. 600 per day.
3. The maximum late filing cost is Rs. 1,00,000 for a single return.

• Interest on late TDS payment (Section 201(1A): If the TDS amount deducted is not deposited by the stated due date, the deductor will be required to pay simple interest at the rate of 1% per month or part of a month on the amount of such tax from the date it was deductible to the date it was actually paid.
• Penalty for failure to deduct TDS (Section 271 C): If a deductor fails to deduct TDS or fails to pay the entire or any part of the tax to the Central Government within the time frame given, a penalty equal to the amount of tax not deducted or paid may be placed under Section 271C of the Income Tax Act.
• Prosecution for willful failure to deduct TDS (Section 276B): Section 276B of the Income Tax Act provides that if a deductor knowingly fails to deduct or pay the TDS amount, he or she may face harsh imprisonment for three months to seven years, as well as a fine.

Consequences Of Non-Filing Of TDS Returns

Apart from the fines and interest costs, non-filing of TDS returns can have various other consequences for the deductor, which include:
• The income tax department may disregard the costs and expenses claimed by the deductor in proportion to the amount of TDS that has not been deducted or submitted.
• Banking organisations and government bodies may refuse to issue loans or other permissions to deductors who have failed to meet their TDS responsibilities.
• Failing to follow TDS regulations can degrade the reputation of the deductor, especially if the failure is willful.

Bottom Line:

Failing to submit TDS forms is a serious offense under the Income Tax Act, and the penalties can be substantial, ranging from late filing fees, interest charges, and other monetary penalties to confinement in situations intentionally done in violation. Deductors have to strictly comply with TDS standards and file returns on time to avoid legal consequences and remain in obedience to tax legislation.

To guarantee professional guidance and stay updated with the latest regulations and deadlines, make sure you consult with the experts. With our professional experts, you can now have a complete understanding of TDS returns and due dates. Do not hesitate to consult with us and explore the best TDS return filing services in Kolkata.

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