Failure to deduct the whole or part of the Tax at source (non-deduction, short deduction or delay in deduction)
- Failure to deposit whole or part of the TDS (non-deposit, short deposit or late deposit)
- Failure to apply for TAN within the prescribed time limit or failure to quote TAN on allotment as required under section 203A.
- 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.
- 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:
Note: Interest Rate u/s 201(1A) has been amended wef 01.07.2010 .Now 1% PM or part thereof interest is applicable where tds is deductible but has not been deducted and 1.5% per month is applicable where tds has been deducted but has not been deposited with in due time.
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)).