TDS Defaults & Consequences

 

TDS defaults:Failure to deduct the whole or part of the Tax at source (non-deduction, short deduction or delay in deduction)

1. Failure to deposit whole or part of the TDS (non-deposit, short deposit or late deposit)

2. Failure to apply for TAN within the prescribed time limit or failure to quote TAN on allotment as required under section 203A.

3. Failure to furnish, in due time, TDS returns or TDS certificates or to deliver or cause to be delivered a copy of declaration in form no. 15H/15G/27C/copy of quarterly statement.

4. Failure to mention the PAN of the deductee in all quarterly statements as well as in all certificates furnished.

Consequences of Defaults

The following chart indicates the nature of default and its consequences which range from penal interest, penalty to prosecution:

 

In addition to the above, there are other consequences in certain cases, as enumerated below;

▬   Disallowance of specified expenditure (while computing the income of the deductor) if TDS is not deducted from the payment. (Section 40a(ia)).

         ▬   Where the tax has not been paid after its deduction it shall be charge       on the asset of the defaulter to recover the amount of TDS. (section 201(2)).

Challans for Various Tax Payments

Challans to be filled up: 

For Depositing Advance Tax,  Self Assessment Tax,  Tax on Regular Assessment,  Securities Transaction Tax, Tax on Distributed Profits of Domestic Company and Tax on Distributed Income to Unit holders . ITNS 280

For depositing TDS/TCS by company or non company deductee ITNS 281

For depositing Securities transaction tax, Estate duty, Wealth-tax, Gift-tax, Interest-tax, Expenditure/other tax and Hotel Receipt tax ITNS 282

For depositing banking cash Transaction Tax and FBT ITNS 283


 

FAQ on I.T return filing Exemption

1. What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?

This notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs.5,00,000, and (ii) the total income consists only of income chargeable to income tax under the head Salaries and interest income from savings bank account if such interest income does not exceed Rs.10,000.

Further, such salaried taxpayer would be eligible for exemption from filing a return of income only if tax liability has been discharged by the employer by way of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the Central Government. For this purpose, taxpayer has to intimate his interest
income to the employer during the course of the year.

2. Whether a salaried taxpayer having total income of less than Rs.5,00,000 and claiming a refund of Rs.3,000 would be eligible under this Scheme.

No. The taxpayer has to file a return of income for making a claim of refund.

3. Is having a valid PAN number a precondition for being covered by the notification?

Yes. The notification clearly specifies that the individual has to report his PAN to the employer. Hence having a valid PAN is a precondition for falling within the ambit of the notification.

4.Can an individual who is getting income under the head “salaries” from more than one employer take benefit of the notification?

No. A salaried taxpayer who has earned income from more than one employer during the financial year is not covered under this Scheme.

5.Whether this notification would also cover taxpayers having ‘loss from house property’, which are often reported by the employees to the employer.

No. Under the existing procedure, DDO/employer can give credit to the employee for a claim for loss under the head “income from house property” u/s 24 made by the employee. As a result, a salaried employee’s total income may reduce to less than Rs.5,00,000 as loss from the head “income from house property” would have been set-off against salary income. Such a taxpayer is not exempted from filing his return of income as the notification exempts only cases where the total income is under the head “salary” and from savings bank account (income from other sources) not in excess of Rs.10,000. If the taxpayer has any loss under the head “income from house property”, he will not be eligible for exemption from filing a return of income.

6.Does savings bank account include other banking accounts like fixed deposits or recurring deposits accounts?

No. The benefit of the notification is available to taxpayers whose interest income comprises of interest earned on savings bank account ONLY.

7. Will a salaried individual having agricultural income, which is exempt from tax, be covered within the ambit of the notification?

A salaried individual with agricultural income exceeding five thousand rupees shall be out of the ambit of the notification. A return will have to be filed in such a case, even if other conditions of the notification are satisfied as the agricultural income (of more than Rs.5,000) has to be included, for rate purposes, in the total
income,.