Section 234E: Fees And Penalty for Late Filing Of TDS/TCS Statements

Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are provisions of the Income Tax Act which require the person making payment to deduct or the person receiving the payment to collect a certain amount and deposit it with the government. This ensures that the government receives tax before filing a tax return. 

The TDS and TCS statements need to be filed with the authority within specified due dates to ensure proper compliance and avail tax credit for the same. Any failure will result in a penalty or a late fee. In this article we will discuss the provisions related to late filing of TDS/TCS statements.

What Is Section 234E Of The Income Tax Act 1961?

Section 234E of the Income Tax Act 1961 outlines the provisions and limits with respect to fees for late or non-filing of TDS/TCS statements by the deductor or collector as the case may be. The section imposes a fee of Rs. 200 per day with a maximum limit upto the TDS/TCS amount. 

Who Is Responsible For Filing TDS/TCS Statements?

The responsibility of filing TDS/TCS statements is that of the person making payment in case of  TDS and the person receiving payment in case of TCS. The person deducting or collecting TDS/TCS is also responsible for the following:

• Determining the applicability of TDS/TCS
• The person deducting tax should have TAN
• Obtaining PAN/TAN
• Depositing TDS/TCS with the Government
• Issuing Certificates
• Filing Statements
• Maintaining Records
• Compliance with the provisions applicable 

Due Date For Filing TDS/TCS Statements

The due dates for filing TDS/TCS statements are as follows:

Fees And Penalty For Late/Non-Filing of TDS/TCS Statements

In case the person fails to file TDS/TCS statement within the specified due date, then the person will be liable to pay a Late fee of Rs. 200 per day u/s 234E but not exceeding the total TDS/TCS amount. 

Further, the assessing officer can direct the person to pay a penalty of minimum Rs. 10,000 and maximum Rs. 1,00,000 u/s 271H. Also penalty under 271H can also be levied when incorrect details are furnished by the deductor.

The following table summarises the fees and penalty applicable in case of late or Non-filing of the statement:

Also if the person fails to deposit the TCS amount with the government within the specified due date, then he shall be punishable with imprisonment for a minimum period of three months which can extend upto seven years with a fine.

Calculation Of Fee Under Section 234E

The late fee under section 234E is Rs. 200 per day but not exceeding the amount of TDS/TCS.

For Example: Mr. Anban was responsible for deducting and depositing TDS of Rs. 10,000. The amount was deducted on 13th May 2024 but the return was filed on 17th November 2024 instead of 31st July 2024. 

In this case from 31st July 2024 to 17th November 2024 there was a delay of 109 days. Therefore, the late fee will be Rs. 200 X 109 days = Rs. 21,800. 

As this is more than the amount of TDS deducted, the late fee Mr. Anban will have to pay will be restricted to Rs. 10,000 only. 

How To File TDS Return After Due Date?

Follow the steps below to file TDS returns after due date:

Step 1: Login to the e-filing portal using your TAN

Step 2: Navigate to e-File > Income Tax Forms > File Income Tax Forms, from the Dashboard

Step 3: Find the specific form and click on “File Now” 

Step 4: Click on “Let’s Get Started”

Step 5: Upload all the required documents and information, and then click on “Proceed to e-Verify”

Step 6: Validate the return using the OTP sent to your registered mobile number

Step 7: After successful validation you will receive a confirmation message

How To Pay Late Fees For Filing Return After Due Date?

Follow the steps below to pay late fees:

• Download the justification report from the TRACES portal.
• Proceed to make payment using Challan ITNS 281.
• Make sure that you tag this Challan towards payment in the “Fee” column.
• Submit the Correct Statement using the Online Correction facility.  

Conclusion

It is very important to ensure timely deduction and deposit of TDS and TCS in order to comply with the provisions and avoid consequences. In this article we have outlined all the relevant provisions which will help you understand the consequences of late or non-filing of TDS/TCS returns on time.