Time Limit for Deduction of TDS
Tax is to be deducted at source at the time of:
- credit to the payee’s account OR
- on accrual of the payment at the end of the accounting year OR
- at the time of payment (in cash or by cheque or draft or any other mode),
whichever is EARLIER.
Defaults related to deduction of TDS & consequences
Failure to deduct TDS:
If any person who is liable to deduct TDS (i.e., Deductor), does not deduct the whole or part of tax, then he shall be deemed to be an assessee in default. He shall be liable to pay interest (u/s 220) + penalty (u/s 221)
Exception:He shall not be deemed to be an assessee in default, if on sum paid to/credited to the account of a resident AND such resident:
- Has furnished his return of income u/s 139, and
- has taken into account such sum for computing income in such return of income, and
- has paid tax due o the income declared by him in such return of income,
AND the deductor furnishes a certificate to this effect from a Chartered Accountant.
Late deduction of TDS:
If any person who is liable to deduct TDS (i.e., Deductor), does not deduct the whole or any part of the tax within the time prescribed, he shall have to pay:
simple interest @ 1% for every/part of month on the amount of tax,
from the date on which such tax was deductible to the date on which such tax is deducted.
Note:Interest for late deduction of TDS shall not be levied on a deductor who is deemed as assessee in default for failure to deduct tax.
Time Limit for Payment of TDS
|GOVERNMENT DEDUCTORS||OTHER DEDUCTORS|
|TDS deposited without challan, i.e, Book entry||Same day||- NA -|
|TDS deposited with challan|| On or before 7 days from the end of month, in which:|| On or before 7 days from the end of month (except March), in which:|
| Where the income or amount is credited or paid in the month of March, time limit for deposit of tax is:|
on or before 30th April
Explanation: If a deductor (other than Government deductors) deducted certain amounts as TDS from the payment made to deductee in a particular month (except March), then deductor have to deposit the TDS amount to the credit of Central Government through challan on or before 7th of next month. But for deductions made in March, such deductions to be deposited on or before 30th April.
|For deductions made in|| Government Deductors :|
Payment of TDS to be made till
| Other Deductors:|
Payment of TDS to be made till
|April||7th May||7th May|
|May||7th June||7th June|
|June||7th July||7th July|
|July||7th August||7th August|
|August||7th September||7th September|
|September||7th October||7th October|
|October||7th November||7th November|
|November||7th December||7th December|
|December||7th January||7th January|
|January||7th February||7th February|
|February||7th March||7th March|
|March||7th April||30th April|
How to pay TDS
→ TDS can be paid to the credit of Government by offline or online mode.
→ It can be paid in cash / cheque / credit card / debit card / net banking.
→ The payment should be accompanied by challan, regardless of the mode of payment.
- Form 26QB / Demand Payment form is to be used for payment of TDS / demand on Sale of Property.
- Challan No. / ITNS 281 is to be used for payment of TDS / TCS (all other cases).
Defaults related to payment of TDS & consequences
Failure to pay TDS:
If any person who is liable to deduct TDS, has deducted that, but fails to pay the whole or part of the tax, then he shall be deemed to be an assessee in default.
He shall be liable to pay interest (u/s 220) + penalty (u/s 221)
Late payment of TDS:
If any person, after deducting fails to pay the tax within time prescribed, he shall have to pay:
simple interest @ 1.5% for every/part of month on the amount of tax,
from the date on which such tax was deducted to the date on which such tax is actually paid.
Note:Interest for late payment of TDS shall not be levied on a deductor who is deemed as assessee in default for failure to pay TDS.
Time Limit for Filing of Quarterly Return of TDS
|Quarter||Date of ending of the quarter of the financial year|| Due date of filing of TDS return|
(Both for Government and other deductors w.e.f. 01/06/2016)
|1st||30th June||31st July of the financial year|
|2nd||30th September||31st October of the financial year|
|3rd||31st December||31st January of the financial year|
|4th||31st March||31st May of the financial year immediately following the financial year in which deduction is made|
Defaults related to filing of quarterly return & consequences
Late Filing of TDS return:
If a deductor fails to file the quarterly returns of TDS within the time prescribed, then he shall be liable to pay penalty of:
Rs. 200 for every dayduring which the failure continues,
subject to maximum of TDS deductible in the quarterly return.
Example:If a deductor files the quarterly return of TDS for the quarter I on 5th August and amount deductible under the said return is Rs. 10000, there is a delay of 5 days in filing the return and he shall liable to pay penalty of Rs. 1000 (5 days delay X Rs. 200 per day).
And if the said return is filed on 25th September, then he shall be liable to pay penalty of Rs. 10000, i.e., maximum amount deductible under the said return. (even though penalty amount on day basis comes to 56 days X Rs. 200 = Rs.11200)
Time Limit for Issue of TDS Certificate
TDS certificates should be furnished in Form 16 for Salary and Form 16A for Non-Salary deductionswithin 15 days for the due date offiling the TDS return.
Downloading of TDS Certificates from TRACES made mandatory:
It is mandatory for all deductors to issue TDS certificates in Form 16/16A after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or TRACES Portal.
Note:TDS Certificates downloaded only from TRACES holds good.