TDS and Related Information

The introduction of TDS was done to collect tax from the primary income source. Its concept says that the deductor, a person liable to make a payment of a particular nature to some other person, known as a deductee, has to deduct the applicable tax at source and remit this amount in the Central Government’s account.

The credit of the amount so deducted which is calculated based on the TDS certificate or Form 26AS issued by the deductor, shall be provided to the deductee, from whose income, the tax has been deducted at the source.

Tds Interest on Late Payment

There are two kinds of TDS interest provisions when the payment is not made on time:

1. TDS Interest when the deduction is late:
   

   The interest rate for the late deduction of TDS is 1% pm. This interest rate is applicable from the date on which the tax was actually deductible to the deduction date. The default Section for TDS Interest related to late deduction is 201A. The TDS return can be filed only after the interest payment is done.
   
   

2. TDS Interest when the payment is late:

   Section 201(1A) says that the interest payment for late TDS deposit post deduction is at the rate of 1.5% pm. The calculation of such interest is done only on a monthly basis and not on the number of days which is the reason behind considering part of a month as a full month. Such interest amount is calculated to the date on which TDS is due.

There exists a provision for paying the late payment TDS interest before actually paying the TDS return or after its demand has been raised by TRACES. There also exists a provision for adjusting such an interest from the amount pending in any Challan related to TDS under any section. This interest paid on delayed deposits of TDS is not counted as an expenditure under the IT Act of Singapore.

Tds Not Deducted In Case Of Payments Made To Residents

According to the Section 201 of the Finance Act, the payer not deducting the entire or a part of the tax amount on the payment being forwarded to the resident payee is not counted to be an assessee-in-default for that tax which he has not deducted, if the following listed conditions are satisfied:

• The return is already provided by the resident recipient under section 139.
• The recipient of the resident has taken into account the above-mentioned income in its return of income.
• The resident recipient has paid the taxes due on its income that is declared in such return of income.
• A payee of the resident has furnished a certificate to this effect from an account in Form no. 26A

Penalty Levied For Late Or Short Payment Of Tds:

The penalty can be imposed on the payer to the extent of an amount that was not remitted or deducted. The payer will be punished with meticulous imprisonment for a term not less than 3 months and this can even extend up to 7 years. Also, the payer does not pay the tax amount that is deducted to the account of the Central Government, in addition to a fine in the case. This can be considered under the provisions of Chapter XVII-B of Section 276B.

Late Filing Consequences

From 1^st July 2012, any delay in submitting the e-TDS statement will result in a compulsory fee of rupees 200 per day till the return is finally filed. However, in this case, the total fee doesn’t exceed the total TDS amount deducted for the given quarter.

Before the filing of such an e-TDS statement, the payment of the late filing fee needs to be done. If the filing of the e-TDS statement gets delayed for more than one year, or the details such as Challan, PAN, and TDS amount, mentioned in the statement are incorrect, the assessee will have to bear a penalty ranging from rupees 10 thousand to 1 lakh, as per the decision of the Assessing Officer.