The Income Tax Act of India includes various provisions to ensure compliance with tax laws. One such provision is Section 234E of the Income Tax Act, which is specifically aimed at penalising delays in filing Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) statements. This section imposes a late fee for delayed submissions, ensuring timely compliance and accountability. In this article, we will explore Section 234E in detail, including its implications, penalties, calculation methods, and filing processes.
Section 234E of Income Tax Act
Section 234E of the Income Tax Act levies a late fee of ₹200 per day for not filing TDS/TCS returns on time, with the total fee capped at the amount of tax deducted.
Introduction
What Is Section 234E Of The Income Tax Act 1961?
Section 234E was introduced to enforce discipline in filing TDS and TCS returns within stipulated deadlines. It mandates a late fee of Rs. 200 per day for delayed filings until the statement is submitted. However, the total late fee cannot exceed the amount of TDS or TCS payable.
The primary objective of this section is to streamline tax compliance by encouraging timely submission of returns. Non-compliance not only attracts penalties but also disrupts the tax reporting system, causing inconvenience to taxpayers and authorities alike.
Who Is Responsible For Filing TDS/TCS Statements?
Various entities are obligated to file TDS and TCS statements under the Income Tax Act. Below is a table outlining the key filers:
| Entity | Responsibility |
|---|---|
| Employers | Deduct TDS on employee salaries and file Form 24Q. |
| Banks and financial institutions | Deduct TDS on interest payments and file Form 26Q. |
| Buyers of immovable property | Deduct TDS under Section 194IA and file Form 26QB. |
| E-commerce operators | Deduct TCS under Section 194O and file Form 27EQ. |
| Other deductors | Deduct TDS on payments like professional fees, rent, etc., and file relevant forms. |
Timely filing of these statements is essential to avoid penalties under Section 234E.
Due Date For Filing TDS/TCS Statements
The due dates for filing TDS and TCS statements vary depending on the type of return and the applicable period. Here is a table summarising the deadlines:
| Type of Return | Period | Due Date |
|---|---|---|
| TDS on salary (Form 24Q) | Quarterly | 31st July, 31st October, 31st January, 31st May |
| TDS on payments other than salary (Form 26Q) | Quarterly | Same as above |
| TDS on sale of property (Form 26QB) | Monthly | Within 30 days of transaction |
| TCS (Form 27EQ) | Quarterly | Same as above |
It is crucial to adhere to these deadlines to avoid late fees and penalties under Section 234E.
Fees And Penalty For Late/Non-Filing of TDS/TCS Statements
Section 234E imposes a late fee for delays in filing TDS and TCS statements. The penalties are summarised below:
| Type of Penalty | Details |
|---|---|
| Late fee under Section 234E | Rs. 200 per day until the statement is filed, subject to the total TDS/TCS amount. |
| Maximum penalty | Cannot exceed the total amount of TDS or TCS payable. |
| Additional penalties | Non-filing may attract further penalties under Section 271H, ranging from Rs. 10,000 to Rs. 1 lakh. |
These penalties are designed to encourage timely compliance and avoid disruptions in tax reporting.
Calculation Of Fee Under Section 234E
The calculation of late fees under Section 234E is straightforward. Below are the steps:
- Determine the delay: Calculate the number of days between the due date and the actual filing date.
- Multiply by Rs. 200: Multiply the number of delayed days by Rs. 200 to compute the total fee.
- Apply cap: Ensure that the calculated fee does not exceed the total TDS or TCS payable.
Example:
Suppose the due date for filing a TDS statement was 31st July, and the statement was filed on 10th August. The delay is 10 days.
- Late fee = 10 days × Rs. 200/day = Rs. 2,000
- If the total TDS payable is Rs. 1,500, the late fee will be capped at Rs. 1,500.
This ensures that the penalty does not exceed the tax liability.
How To File TDS Return After Due Date?
If you have missed the deadline for filing TDS returns, you can still file them by following these steps:
- Log in to TRACES portal: Visit the official TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal.
- Prepare the return: Use TDS software to prepare the return in the prescribed format.
- Generate FVU file: Validate the return using File Validation Utility (FVU).
- Upload the return: Submit the FVU file on the portal.
- Pay late fees: Ensure you pay the late fee under Section 234E before submission.
Timely rectification of delayed filings can help avoid additional penalties.
How To Pay Late Fees For Filing Return After Due Date?
To pay late fees for TDS/TCS returns, follow these steps:
- Visit the NSDL website: Go to the official NSDL portal for tax payments.
- Select challan type: Choose Challan ITNS 281 for TDS/TCS payments.
- Fill in details: Enter deductor details, late fee amount, and other required information.
- Make payment: Pay the fee online using net banking or other available modes.
- Generate receipt: Save the payment receipt for future reference.
Ensure that the late fee is paid promptly to avoid further complications.
Conclusion
Section 234E of the Income Tax Act serves as a crucial mechanism to enforce timely compliance with TDS and TCS filing requirements. The late fee of Rs. 200 per day acts as a deterrent against delays, ensuring smoother tax reporting processes. By understanding the due dates, penalties, and filing procedures, taxpayers can avoid unnecessary fines and legal challenges.
Timely compliance not only prevents penalties but also contributes to a seamless tax ecosystem. If you are looking for efficient financial solutions to manage your tax obligations.
Frequently asked questions
What is Section 234E of income tax?
Section 234E imposes a late fee of Rs. 200 per day for delayed filing of TDS and TCS statements, ensuring timely compliance with tax laws.
Can penalty US 234E be waived?
Penalties under Section 234E cannot be waived unless specific conditions or legal provisions apply. Consult a tax expert for guidance.
What is the fee under section 234E for 26QB?
The late fee for Form 26QB is Rs. 200 per day, capped at the total TDS amount payable for the property transaction.
Related articles
Related videos
What are tax implications for US stocks?
What role do credit ratings play?
How to pick stocks for investment?
Bajaj Finserv App for all your financial needs and goals
Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.
You can use the Bajaj Finserv App to:
Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
- Explore and apply for co-branded credit cards online.
- Invest in fixed deposits and mutual funds on the app.
- Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
- Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
- Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
- Shop from over 100+ brand partners that offer a diverse range of products and services.
- Use specialised tools like EMI calculators, SIP Calculators
- Check your credit score, download loan statements, and even get quick customer support—all on the app.
Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.
Download App
Now request money from your friends and family and make instant payments.
- 1. Apply for Loans: Choose from personal, business, gold loans and more
- 2. Transact: Pay utility bills, use UPI, get FASTag and more
- 3. Shop: Buy over 1 million products on No Cost EMI
- 4. Invest: Buy stocks, mutual funds and invest in FD