File your TDS Return on Time to Avoid Penalty

As we all are aware of the nationwide lockdown situation during this pandemic and government of India also taking care of the interest of the taxpayers and already extended due dates of all the return filings falling during March, April, and May till June end. So, in this article, we are going to discuss the due date for filing TDS return for Quarter 4 of the Financial year 2019-20 and applicable interest or penalties in case you are not able to file your TDS return or its payment on time. 

Due Date of filing TDS Return:

As said earlier, the Due date of TDS return for both salaried as well as the non-salaried return was 31st May 2020 for the last quarter of Assessment Year 2020-21. But due to these pandemic situations and most of the business houses are not able to perform their regular activities, the finance ministry has extended the due date of filing the TDS for both types of return from 31st May 2020 to 30th June 2020 for the last quarter of the financial year 2019-20.

Due Date of Deposit of TDS:

As we know in normal circumstances, TDS is required to be deposited with the government within 7 days from the end of the month in which it has been deducted i.e. up to 7th day of the following month. But as we know the last date of filing of TDS return for last quarter of Financial Year 2019-20 has been extended to 30th June 2020.

So, here confusion is coming out among various taxpayers that only last date of TDS return filing is extended or the date of 30th June is also applicable for the deposit of TDS which they were earlier supposed to deposit in the month of April, May, and June.

As we can see when we are reminding our clients for the deposit of TDS which was required to be deposited in the month of April, May and June then they are responding like ‘’Due date has been extended to 30th June, right?’’

Is Due Date of Deposit TDS also extended to June 30?

Now I must say that because of this pandemic situation the government has provided us with various relaxations from interest and penalties in terms of due dates. But, if we talk about payment of taxes, then the due dates are the same as they were in normal circumstances.

Meaning thereby, we can not defer our TDS payments from their actual dates. So, Due date for the payment of TDS deducted in the month of March 2020 is 30th April 2020. For April & May month, the last date of depositing the TDS is the 7th day of the following month.

However, If someone genuinely not able to pay TDS on time due to this pandemic situation then the government has not waived off its interest but reduced it rate of interest for late deduction or lat payment of TDS to 9% per annum for payment of TDS made between 20th March 2020 to 20th June 2020 ( i.e. 0.75% per month or part of the month instead of earlier 1%/ 1.5% per month for non-deduction and late payment respectively)

Note: It is to be noted here that, interest @ of 9% per annum shall be charged on a monthly basis and shall be calculated from month of deduction to month of actual deposit of TDS. For this purpose, part of the month shall also be considered as 1 month.

For Example: In case you have deducted TDS on 25th Feb which was needs to be deposited by 7th March. But you have actually paid that TDS on 15th March. Then you have to pay interest @ 1.5 percent per month for 2 months.

Penalty if TDS return is delayed:

As discussed earlier, Due date of filing of Quarterly TDS return for the period of January 2020 to March 2020 has been extended to 30th June 2020 from its actual date of filing which earlier was 31st May 2020.

In case you are not able to file your TDS return latest by 30th June 2020 then you shall be liable to pay late filing fees of Rs. 200 per day under Section 234 E and shall be paid for the number of days till the default continues. However, the fees under section 234 E can not exceed the number of TDS deducted for which the return is being filed.

TDS return can not be filed without payment of late filing fees under section 234 E which means if there is a delay in filing of TDS return then Late payment fees shall need to be paid before filing such return.

For Example, Mr. Rahul has deducted TDS of Rs. 1,500 under section 194J in the month of March. He wants to file his TDS return for Quarter 4 on 7th July 2020 (The last date is 30th June 2020) then he shall need to be paid Rs. 1,400 (Rs. 200 X 7 Days) late filing fees under section 234E before filing his TDS return.

However in the above example if he wants to file his return on 15th July 2020 then late filing fees under section 234E shall be levied of Rs. 1,500 only ( Not Rs. 3,000) as of late fees under section 234 E shall not exceed the TDS amount.

The penalty under Section 271H: In case a person fails to file his TDS/ TCS return on or before the due date then the Assessing Officer may direct such person to pay the penalty of minimum Rs. 10,000 and which may go up to Rs. 1,00,000 under section 271H. The penalty paid under section 271H is in addition to late filing fees paid under section 234E.

Conclusion:

So, Now I am concluding the whole discussion of our article in the following key points.

• Due date of filing TDS return for Quarter 4 for FY 2019-20 is June, 30.
• No extension for due dates of payment of TDS with the government (Interest has been reduced to 9% P.a)
• The penalty under section 234E and 271H can be levied if there is any delay in filing of TDS return.

So, it is advisable to be updated from the latest announcements of the government and do not make any delay in making TDS payment and filing of TDS return as there are heavy penalties which can be avoided if we take timely actions for them.