My company in Kurnool has defaulted on TDS payment and filing; what are the penalties and how can I regularise it?
DE Asked by Deepak Singh from India
Quick Answer
Under the Income Tax Act, 1961, failure to deduct TDS attracts a penalty equal to the TDS amount under Section 201, and interest at one percent per month under Section 201(1A) for late deduction and one and a half percent for late payment.
Detailed Legal Analysis
Under the Income Tax Act, 1961, failure to deduct TDS attracts a penalty equal to the TDS amount under Section 201, and interest at one percent per month under Section 201(1A) for late deduction and one and a half percent for late payment. Late filing of TDS returns attracts a fee of two hundred rupees per day under Section 234E, subject to the TDS amount.
Prosecution under Section 276B may be initiated for failure to deposit TDS, with imprisonment up to seven years and fine. You can regularise by depositing the TDS with interest, filing the pending returns with fees, and approaching the jurisdictional officer for waiver of penalty in genuine cases.
The Andhra Pradesh High Court may be approached for relief if the penalty is disproportionate. The Andhra Pradesh Rent Control Act 1960 on tax deduction at source for state-specific payments may also be relevant.
Disclaimer: AI-generated for educational purposes only. Does not constitute legal advice. Consult a qualified practitioner.