TDS Payment Due Dates and Penalties

What is TDS?

TDS, or Tax Deducted at Source, refers to the tax deducted from certain payments you make. The responsibility falls on you, the deductor, to withhold this tax and deposit it with the government on behalf of the recipient.

TDS vs TCS

It's important to distinguish TDS from TCS (Tax Collected at Source). While TDS is deducted from payments you make, TCS is collected from payments you receive.

TDS Payment Due Dates

The deadline for depositing TDS and filing the TDS return depends on the month in which the deduction is made; there are some exceptions:

·       For Non-Government Deductors: Generally, the due date is the 7th day next month. However, for deductions made in March, the due date is extended to April 30th.

·       For Government Deductors: If paying through challan (treasury challan), the due date remains the 7th of the next month. If paying through book entry, the payment must be made on the same day the TDS is deducted, except for March, when the deadline is April 7th.

Table summarizing the TDS payment due dates for FY 2023-24:  

TDS Payments Online

A valid TAN (Tax Deduction and Collection Account Number) is needed to make a TDS payment online.

1.      Visit the government website for tax payments.

2.      Enter your TAN number and verify it.

3.      Fill in the challan details, including the accounting head and payee information.

4.      Review the information and proceed to your bank's net banking portal for payment.

5.      On successful payment, you receive a challan counterfoil containing the payment details and bank information.

TDS Return Filing Due Dates for Public Holidays

The next business day becomes the new deadline if the due date falls on a Sunday or public holiday.

Penalties for Late TDS Filing and Payment

Timely TDS filing and payment are important. Missing deadlines can result in penalties:

·       Late Filing Penalty: A penalty of Rs. 200 per day is charged for late filing of TDS returns, subject to a maximum equal to the TDS amount.

·       Interest on Late Payment: Interest is levied on late TDS payments. The rate depends on the period of delay.

Understanding the Penalties:

·       Section 234E: This section of the Income Tax Act imposes a daily penalty of Rs. 200 for late filing, capped at the TDS amount.

·       Section 271H: In case of inaccurate details in return (like incorrect PAN or tax amount), a penalty ranging from Rs. 10,000 to Rs. 1 lakh can be imposed.

·       Prosecution (Section 276B): Failure to deposit deducted TDS with the government can lead to imprisonment for 3 months to 7 years and a fine.