Penalty for Late & Non Filing of TDS Returns [Updated 2019]

Every deductor (Who deduct TDS on behalf of a payee) has the duty to deposit TDS within the prescribed limit to the account of Income Tax department as per rules by Income Tax Act.

Where a persons fails to deduct or pay tax, he shall be liable to pay penalties as per income tax act.

In this article, we will discuss time limit to deposit TDS and penalty on failure or late payment to deposit TDS.

Check Time Limit to Deduct TDS and Deposit TDS 

Interest on Late Payment or Non Deduction of TDS

If any person liable to deduct or collect tax at source or any person who opts to deposit TDS on perquisites on behalf of his employee, fails to deduct or collect the whole or part of TDS/TCS or fails to deposit the tax deduct/collected by him, he shall be liable to pay simple interest as under:

  1. 1% for every month or part of a month for the period from the date on which the tax was deductible to the date of actual deduction1, and 1.5% for every month or part of a month for the period from the date of deduction to the date of actual deposit;
  2. 1% for every month of part of a month for the period from the date on which the tax was collectible to the date of actual deposit.

The interest shall be paid before furnishing the statement.

Penal Interest Table for Late Payment of TDS

Default Section Period 201(Interest Rate
Failure to Deduct TDS 201(1A) From required date for deduction to actual date of deduction 1%
Failure to Deposit TDS in Time 201(1A) From actual date of deduction to actual date of deposit 1.5%
Failure to Collect tax (TCS) 206C(7) From required date for collection to the actual date of collection 1%

Penalty or Fee for Late filing of TDS Returns

Where a persons fails to submit TDS returns with the time (Check due dates to file TDS Return here), he shall be liable to pay a sum of Rs. 200 for every day during which the failure continues. (u/s 234E)

However, the amount of fee or penalty shall not exceeds the amount of tax deductible.

For Example: If penalty/fee is Rs. 3000 but TDS is Rs. 2000 then you have to pay Rs.2000.

Penalty or Fee for Non-Filing of TDS Return

If a person fails to submit TDS return or submit incorrect returns, he shall to pay Rs. 10,000 which may extend up to Rs.1,00,000. (u/s 271H)

However, the above penalty u/s 271H will not be levied in the following cases.

  • If the person proves that he paid TDS along with interest and fees.
  • If the person proves that he submit TDS return before the expiry of a period of one year form the time for delivering such TDS return.

Failure to Deposit TDS/TCS

There is rigorous imprisonment for maximum 3 months but maximum 7 years in addition to file.

  1. This interest can be reduced/waived by the Chief CIT or Director General of Income-tax in specified cases. Refer Cir. No.11/2017, dt. 24-.3-2017.
Categories TDS

19 thoughts on “Penalty for Late & Non Filing of TDS Returns [Updated 2019]”

  1. Hi,

    I am a NRI and have bought an under construction apartment for the total cost of around Rs. 51 lakhs from a builder in 2014. I have paid multiple installments since 2014 without deducting TDS. Total amount of installments paid up till now is Rs 48 lakhs. The apartment is almost ready for possession and I am about to make the final payment and want to deduct the TDS now. I have the following questions:
    1. Since I did not pay TDS on the installments since 2014, should I be paying interest and penalty on the unpaid TDS? If so, how is that calculated? And will this interest and penalty come out of my pocket (so I don’t deduct this from the payment which I made to the builder)?
    2. As per my understanding, I have to deduct total TDS of 1% which is Rs 51000. So I should be paying Rs 50,49,000 in total to the builder. Is this correct?
    3. Apart from the cost of the apartment, there are some more charges which the builder is asking at the time of possession (like escalation charge, additional compensation charge, labor welfare charge, etc.). Is TDS also calculated on these or just on the cost of the apartment?
    4. The service tax which I have to pay to the builder, is that calculated on the total cost (51 lakhs) or on cost after deducting TDS (50,49,000)?

    Could you please help with my queries. Appreciate your response.

  2. I bought a property in 2014 and have not paid the TDS with the installments paid until now. Can i still pay the TDS ? What would be the consequences of paying the TDS now ?.

    Can someone help.

    • Can you tell what is the value of property as per registered amount. If you have paid over 50 lakh then you need to deduct TDS. If it is over 50 lakh then you have to calculate TDS now and paid without any delay. As it attracts penalty of Rs. 1 lakh on failure.

      Now you need to do the follow steps:
      Deduct TDS on instalments you have paid @1% and deposit it without any delay with interest of 1.5% on TDS amount.

      Please ask further if you have any query. Thanks

  3. Monthly TDS payment date is 7th of every month and if there is government holiday on 7th and we make payment on 8th of that month then is there any requirement to pay interest on TDS ?

  4. Sir, A Pvt. Ltd. Co raised a jobwork Bill for Rs. 106378 on dt. 08.09.2015. But we are failed to deduct TDS & Retun. Now Suggest how to filed Return with Late Interest

  5. Hi
    I have received letters from Income Tax department (TDS) regarding interest on late payment & late filing for Q1 (Rs1370/-) and Q2 (Rs450/-) as on 6/08/2015 & 29/10/2015 respectively.
    But I have not yet paid both the amount. Now I want to make online payment. So, what would be the nature of payment in Challan 281?
    N.B: I have deducted TDS on a/c 94C (Payment contractor & sub contractor).

    Kindly help.

    Motiulla, Kolkata

    • From the date when deductible till actual deduction 1% p.m.; From the date of deduction till payment 1.5% p.m.

  6. Suppose i have deducted the TDS and deposited the same on time, but under different section. Like i have to deposit 10% but i deposited 2% and also filled the ITR after that a case arise. Is it a non payment / delay of payment/ or what?

  7. Tds we have deducted every month but we have to pay the every month 7th.But for the month of March what shall be the due date I will be 7 th April or 30th April

  8. there’s system failure due to which i am unable to pay tds via e-payment.
    Will the late payment still be in interest column?

    • Its better to ask these kind of questions to your CA. He is better equipped to answer these questions after understanding all facts of your case. Asking these questions on net, in my humble opinion, may be detrimental to you.

      CA. Deepak Bholusaria

    • Deduct tax immediately and deposit with interest @ 1% for the months of delay in deduction (i.e. from the date of payment to the person to the date of deduction). Also deposit the TDS immediately, otherwise you have also needs to pay interest on late deposit of TDS. Accordingly revise your tds return also.


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