TDS - Interest, Penalty and Prosecution

Consequences of failure to deduct tax or deposit tax:

If the person responsible for collecting the tax at source does not collect or after collecting fails to pay tax, he shall be deemed to be an assessee in default in respect of the tax. The amount of tax, together with the amount of simple interest (presently @ 1%), will be collected from the person responsible for tax collection at source. This amount will be a charge upon all the assets of the person responsible for collecting tax at source. Also, if the person responsible tax collection at source, does not deposit the tax in the Govt. Account, he shall be liable for prosecution for a period which will not be less that three months and may extent upto seven years with fine.

Consequences of failure to issue TCS Certificates in time:

If a person fails to issue a certificate to a buyer he shall by way of penalty pay a sum of one hundred rupees for every day during which the failure continues.

Consequences of failure to quote PAN:

If a person does not quote PAN of the buyer in all TCS Certificates or in the TCS returns, he shall be liable to pay penalty of ten thousand rupees.
Consequences of failure to apply for

TCAN and quote TCAN:

If a person fails to apply for TCAN or fails to quote it in the challans, TCS certificate, TCS returns or other relevant documents, he shall be liable of pay penalty of ten thousand rupees.

Consequences of failure to furnish return:

If a person collecting tax at source fails to furnish the returns then he shall be liable to a penalty of Rs. 100/- per day of period during which the failure continues.

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