TDS refers to tax deducted at the source, whereas TCS refers to tax collected at the source. When an individual makes a payment to the recipient, TDS must be deducted at the prescribed rate and remitted to the government, as per the Income Tax Act.
In the case of TCS, the recipient of the payment is responsible for collecting tax from the payer and depositing it with the government.
This guide will provide information on the TDS payment deadlines, penalties for late TDS filing, and more.
TDS Payment Deadlines
The deadlines for depositing TDS and filing TDS returns for the financial year 2024-25 for deductors are as follows:
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Quarter Ending (for the year 2024) |
Month of Deduction (for the year 2024) |
Due Dates for TDS Deposit (FY 2024-25) |
TDS Return Filing Deadline (FY 2024-25) |
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June 30th, 2024 |
April 2024 |
7th May, 2024 |
July 31st, 2024 |
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May 2024 |
7th June, 2024 |
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June 2024 |
7th July, 2024 |
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September 30th, 2024 |
July 2024 |
7th August, 2024 |
October 31st, 2024 |
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August 2024 |
7th September, 2024 |
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September 2024 |
7th October, 2024 |
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December 31st, 2024 |
October 2024 |
7th November, 2024 |
January 31st, 2025 |
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November 2024 |
7th December, 2024 |
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December 2024 |
7th January, 2024 |
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March 31st, 2025 |
January 2025 |
7th February, 2025 |
May 31st, 2025 |
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February 2025 |
7th March, 2025 |
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7th April, 2025 (for tax deducted by govt. office) | ||
| 30th April, 2025 (for other deductors) |
TDS Payment Return Due Date for Sundays and Public Holidays
TDS (Tax Deducted at Source) applies when payments are made to a recipient, and the tax withheld is directly deposited with the government by the payer. TDS filing is mandatory for individuals involved in payment transactions, subject to various government regulations.
How to Make TDS Payment Online
To make a TDS payment, follow the steps outlined below. Please note that you cannot make a TDS payment without a valid TAN (Tax Deduction and Collection Account Number).
- Use Challan No. ITNS 281 to make the TDS payment. A copy of this Challan is attached for your convenience.
- Enter your TAN number, and the system will verify its validity for the TDS payment.
- Once your TAN is validated, proceed to fill out the other challan details, such as the accounting head for the payment, and the name and address associated with the TAN.
- After submitting the details, an approval screen will appear. If the entered information is correct, you will be redirected to the bank’s net banking page to complete the payment.
- Log in to the bank’s net banking portal using your user ID and password to make the TDS payment.
- After completing the payment, a counterfoil of the challan containing the Challan Identification Number (CIN), payment details, and the bank’s name will be generated. You can track the status of your challan on the NSDL-TIN website’s “Challan Status Inquiry” section after one week using the CIN.
TDS Return Filing Due Date Penalties
TDS ensures that the income earner meets their tax obligations on time, rather than the person who is deducting the tax. For instance, when an employer deducts tax on an employee’s behalf, it indicates that the employee has paid the tax, but it does not mean that the employer has paid it.
Therefore, penalties and late fees are applied if payments are not made promptly.
In our day-to-day transactions, terms like late payment penalties and fines are commonly encountered. Similarly, the Income Tax Department (ITD) imposes penalties or late fees on those who fail to comply with tax regulations or miss their payment deadlines.
If a person or contractor who deducts TDS from an employee’s salary fails to pay it to the government or does not file the required tax returns on time, penalties for delayed or non-payment of TDS will be enforced.
The penalty for late filing of TDS/TCS returns was introduced under Section 234E of the Income Tax Act, which came into effect on July 1, 2012.
Late Filing of TDS Return and Associated Penalties
If TDS/TCS returns are filed late, a penalty of Rs 200 per day is imposed by the Tax Department. This fine is applied for each day of delay, until the total penalty exceeds the TDS amount itself, but not more than that.
Here’s an example for clarity:
If your TDS amount of INR 5000 is due on March 1st, but you pay it on June 30th, the total penalty would be INR 200 x 122 days = INR 24,400. Since the penalty exceeds the actual TDS amount of INR 5000, you will only need to pay INR 5000 as the late filing penalty.
Interest on Delayed TDS Payment
|
Section |
Nature of Default |
Interest Rate Based on TDS or TCS Amount |
Period for Which Interest is Applicable |
|
201(1A)(i) |
No TDS Deduction (either fully or partially) |
1% per month |
From the date the tax is due to the actual date of deduction |
|
201(1A)(ii) |
TDS deducted but not remitted to the government (either fully or partially) |
1.5% per month |
From the time tax is deducted until it is deposited. |
It is crucial to pay the interest before filing the TDS return.
According to Section 201(1A) of the Income Tax Act, if TDS is deposited after the deduction date, interest is applied at 1.5% per month. This interest is calculated from the deduction date to the actual deposit date, with each month counted as 30 days.
For example, if TDS of ₹4,000 is deducted on 14th January 2024 and deposited on 15th May 2024, the interest calculation will be ₹4,000 x 1.5% p.m. x 5 months (January to May) = ₹300.
The term ‘month’ is not specifically defined in the Income Tax Act, but court rulings suggest it refers to a period of 30 days, not a calendar month. The interest begins from the deduction date, not the due date for payment.
If TDS was deducted on 22nd February 2024 with a due date of 8th March 2024, and it was deposited on 9th March 2024 (one day late), the interest would apply for 2 months. Thus, the interest calculation would be 1.5% per month for 2 months = 3% on the TDS amount.
Penalties for Late Filing of TDS Payments for FY 2024-25
If TDS returns are filed after the due date, or if there are discrepancies in the return forms, the following penalties will apply:
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Penalty under Section 234E
The deductor will be fined Rs.200 per day under this section of the Income Tax Act, but the total penalty cannot exceed the TDS amount.
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Penalty under Section 271H
A penalty ranging from Rs.10,000 to Rs.1 lakh will be imposed for providing incorrect details, such as wrong PAN, incorrect tax amounts, etc.
Prosecution [Sec 276B]
If an individual fails to remit the tax deducted at source to the Central Government as per the provisions of Chapter XVII-B, they will face rigorous imprisonment for a minimum of three months and up to seven years, along with a fine.
Understanding the TDS payment due dates is essential for taxpayers to ensure compliance with the Income Tax regulations. Timely TDS payments prevent the accrual of interest and penalties.
It is vital to note these dates and adhere to them to maintain financial discipline and avoid legal issues related to tax deductions.
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During Covid-19 Pandemic (Old Update) - Finance Ministry TDS/TCS Updates Due to Covid19 The government plans to infuse Rs 50,000 crores of liquidity by reducing TDS rates for non-salaried specified payments made to citizens and TCS rates for specific receipts by 25% of the current rates. For late payments of accelerated tax, self-assessment tax, standard tax, TDS, TCS, equalization fee, STT, and CTT, the interest rate has been reduced to 9% from the previous 12%/18% per annum (i.e., 0.75% per month instead of 1/1.5% per month). No late fees or penalties will be charged during this period. |