Due Date for TDS Return Filing and Payment for the FY 2024-25

Due Date for TDS Return Filing and Payment for the FY 2024-25

In the complex domain of taxation, TDS (Tax Deducted at Source) serves as a vital tool for governmental oversight, ensuring adherence to tax regulations. It is imperative for both businesses and individuals to grasp the intricacies of TDS return filing and payment timelines. This detailed guide aims to provide insight into the essential aspects, focusing on the deadlines for TDS return filing and payments for the fiscal year 2024-25.

• Budget 2023 Updates:

1. Section 194BA: Introduction of TDS on income from online gaming.
2. Section 196A: Non-residents earning income from mutual funds in India can provide a Tax Residency Certificate starting April 1st, 2023, to avail the benefit of TDS as per the rate given in tax treaties, instead of 20%.
3. Section 192A: TDS rate reduced to 20% from the maximum marginal rate on PF withdrawal for employees without PAN.
4. Section 193: No exemption from TDS on interest from listed debentures. Tax has to be deducted on interest on such specified securities.
5. Section 194N: TDS threshold increased on cash withdrawal by cooperative societies. Starting April 1st, 2023, tax will be deducted on cash withdrawals exceeding Rs. 3 crore by cooperative societies, instead of the previous limit of Rs. 1 crore.

• Budget 2022 Updates:

1. New Section 194S: Introduction of TDS at 1% at the time of payment of transfer of virtual digital assets.
2. Sale of immovable property under Section 194-IA: Amendment proposed to deduct tax at 1% on the sum paid/credited or the stamp duty value of the property, whichever is higher.
3. New Section 194R: TDS at 10% should be deducted by any person providing perks or benefits, convertible into money or not, to any resident for carrying out any business or profession.

What is TDS (Tax Deducted at Source)?

TDS, or Tax Deducted at Source, represents a tax collection mechanism where tax is deducted at the source of income. This applies to a variety of income sources including salaries, interest earnings, commissions, professional fees, rent, and more. The entity responsible for making payments, often an employer or organization, deducts the tax and forwards it to the government on behalf of the recipient of the income.

Importance of TDS Return Filing and Payment

TDS return filing is a crucial compliance requirement under the Income Tax Act, 1961. It involves submitting details of TDS deducted and deposited to the Income Tax Department. Failure to comply with TDS provisions can attract penalties and legal repercussions.

Due Dates for TDS Return Filing and Payment for FY 2024-25

For the financial year 2024-25, it’s imperative to mark your calendars with the due dates for TDS return filing and payment to avoid last-minute hassles. Here’s a breakdown of the deadlines:

TDS Returns Filing Forms

If tax is deducted at the source according to Sections 194-IA, 194-IB, and 194M, the person deducting the tax should provide a combined challan and statement. This is done using Form 26QB, Form 26QC, and Form 26QD respectively. They must furnish this combined document within 30 days from the end of the month in which the TDS is deducted. In these cases, there’s no need to file a separate return.

Penalty for Late Filing of TDS/TCS Returns

When TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) returns are filed after the due dates, penalties are levied as per the Income Tax Act. The penalty for late filing of TDS/TCS returns depends on the delay in filing and the nature of the default. Here’s a breakdown of the penalties:

Late Filing Fee (Sec 234E)

According to Section 234E, if you file your TDS/TCS statements late, you’ll be charged a fee of Rs. 200 for each day of delay, starting from the due date until the actual filing date. However, this fee cannot exceed the total amount of tax deducted or collectible. You must pay this fee before submitting your TDS/TCS statements.

For example, let’s say you deducted TDS worth Rs. 10000 on May 15, 2024, and filed your return for the first quarter on November 17, 2024, instead of the due date, which was July 31, 2024.

The delay is 111 days, calculated from August 1, 2024, to November 17, 2024.

So, the calculation would be Rs. 200 x 109 days = Rs. 21,800. However, since this exceeds the TDS amount of Rs. 10,000, you’ll only have to pay Rs. 10,000 as the late filing fee.

Additionally, you’ll need to pay interest for the delay in depositing the TDS, which we’ll discuss in the next section.

Penalty (Sec 271H)

In situations where an individual fails to submit the TDS/TCS statement within the stipulated deadline, the Assessing Officer retains the authority to impose a penalty. This penalty can range from a minimum of Rs. 10,000 to a maximum of Rs. 1,00,000. It’s important to note that this penalty is distinct from the late filing fee outlined in section 234E and also applies to cases where TDS returns are inaccurately filed.

However, under section 271H, no penalty will be imposed for the delayed submission of TDS/TCS returns provided that certain conditions are fulfilled:

1. The tax deducted/collected at source is remitted to the government’s account.
2. Any late filing fees and accrued interest, if applicable, are duly paid to the government.
3. The TDS/TCS return is filed within one year from the specified due date.

Interest on Late Deposit of TDS

Under Section 201(1A), if TDS is deposited late after deduction, interest is charged. The interest rate is 1.5% per month, calculated from the date when TDS was deducted to the actual date of deposit.

• For instance, if a TDS of Rs. 10,000 was deducted on January 15, 2024, and it was deposited on May 19, 2024, the interest would be calculated from January 15, 2024. So, the interest would be Rs. 10,000 x 1.5% per month x 5 months (January to May), which equals Rs. 375.

• The term “month” in this context refers to a period of 30 days, not necessarily an English calendar month. Interest starts from the date of TDS deduction, not from the date it was due.

• For example, if TDS was deducted on February 19, 2024, and the due date was March 7, 2024, but it was deposited on March 8, 2024 (one day late), interest would apply from February 19, 2024, to March 8, 2024. In this case, interest for two months, calculated at 1.5% per month, would be charged, totaling 3% of the TDS amount.

Prosecution (Sec 276B)

Prosecution under Section 276B can occur if a person willfully fails to pay the collected tax at source to the government. This means that if someone knowingly avoids or neglects to remit the tax collected at source, they could face legal action, including fines or even imprisonment for a term not less than three months but which may extend to seven years, and with a fine.

Penalty Provisions During COVID-19 Lockdown 2020

During the lockdown period from March 20, 2020, to June 30, 2020, penalty provisions have been waived by the department. This means that penalties usually imposed for failing to deduct, collect, or remit the required amount have been suspended for this specific time frame as per the 2020 Ordinance. However, under normal circumstances, penalties equal to the amount not deducted, collected, or remitted may be imposed.

Penalty for Delayed or Non-Payment of Tax Collected at Source (TCS)

If an individual fails to submit the Tax Collected at Source (TCS) to the government within the specified due dates as per Section 206C, they could face punishment. This punishment may include imprisonment for a minimum of three months up to a maximum of seven years, along with a fine.

Tips for Smooth Compliance:

• Maintain Accurate Records: Keep meticulous records of TDS deducted and deposited throughout the year.
• Use Technology: Leverage accounting software and TDS return filing utilities for accurate and timely filings.
• Stay Updated: Keep abreast of any changes in TDS provisions and due dates notified by the Income Tax Department.

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