“TDS - Penalty and Procedure"
TDS, or Tax Deducted at Source, is a mechanism used by the tax authorities in many countries to collect taxes at the time of payment itself.
When certain types of payments are made, the payer is required to deduct a certain percentage of tax from the payment amount and remit it to the government.
This ensures that the government receives tax revenue in a timely manner.
If a payer fails to deduct TDS or fails to remit the deducted TDS to the government, penalties and procedures may be imposed.
Penalties for Non-Deduction or Late Deduction of TDS:
- Interest: In case of non-deduction or late deduction of TDS, interest may be levied on the outstanding tax amount. The interest rate and calculation method can vary, but it is typically a percentage per month or part thereof.
- Penalty: There may be a penalty imposed for non-deduction or late deduction of TDS. The penalty amount can be a fixed percentage of the tax amount that should have been deducted.
Penalties for Non-Remittance of TDS:
- Interest: If the TDS amount deducted is not remitted to the government within the specified time, interest may be charged on the outstanding amount. The interest rate and calculation method can vary.
- Penalty: A penalty may be levied for non-remittance of TDS. The penalty amount can be a percentage of the TDS amount that was not remitted.
