Late Fee and Penalty regarding e-TDS/TDS if Tax Deductor penalize w.e.f. 01-07-2012

Late Fee:
Presently, if TDS Return is submitted late, penalty is charged @ 100/- per day as per section 272A. Penalty amount is limited to maximum of TDS amount. Practically, this penalty is not imposed in any case due to lengthy procedure to charge penalty. According to new rules applicable w.e.f. 01-07-2012 or after TDS/TCS section 272A has been changed with new Section 234E which is hard in comparison with old.

Penalty:
In simple words, penalty will be charged @ 200/- per day on late submission of TDS/TCS return. Penalty amount will not be increased the TDS/TCS amount. Penalty amount will be deposited prior submission of TDS/TCS return. This penalty will be start w.e.f. 2nd Quarter of the Financial Year 2012-13.

A new penalty under section 274H will also be charged except above new penalty. Minimum amount of this penalty will be Rs. 10,000 and Maximum amount of the penalty will be Rs. 1,00,000/- This penalty will be imposed under two circumstances :-
  • In case, incorrect information is submitted in TDS/TCS return.
  • In case, TDS/TCS return is submitted after one year, means deductor do not deposit TDS/TCS/RETURN/INTEREST with in one year after deducting TDS/TCS from deductor or collector.
Note :- Section 273B has been amended to relax in New Penalty, but there is no provision in relaxation of Late Fee. It means Late Fee amount will be paid as mandatory.

New Section 234E

234E. (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.

(2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductibleor collectible, as the case may be.

(3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.

(4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.”.

Section 2734B

100. In section 273B of the Income-tax Act, after the word, figures and letter “section 271G,”, the word, figures and letter “section 271H,” shall be inserted with effect from the 1st day of July, 2012

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