Home > TDS > Interest, Late Fee and Penalties under TDSLast Updated: Jan 24th 2025
Interest, Late Fee and Penalties under TDS — Explained
Interest and Late fee mean the penalties levied for failing to pay or file TDS/TCS returns within due dates.
- Interest is levied for Non-Payment or Non-Deduction/collection of TDS or TCS within due date
- Late fee will be levied for non-filing of TDS/TCS returns within due dates.
This document covers
- Interest on TDS /TCS
- Late fee u/s 234E for Non filing of TDS /TCS returns
- Penalty u/s 271H for Non filing of TDS /TCS returns
1. Interest on TDS /TCS
Interest will be levied in the following cases
- TDS/ TCS is required to be deducted or collected but not deducted or collected
- Rate of Interest: 1% per month or part of month
- Period of levy: Interest will be calculated from the date on which TDS/TCS is required to be deducted or collected to date of actual deduction
- TDS/TCS is deducted or collected but not paid to the credit of Government
- Rate of Interest: 1.5% per month or part of month
- Period of levy: Interest will be calculated from the date on which TDS/TCS was deducted or collected to the date of actual payment
NOTE
For example, if the TDS deducted for the month of Oct 2024 is not paid before 07th Nov 2024 and paid on 30th Nov 2024, interest will be calculated for 2 months i.e., Oct and Nov. Part of month will also be considered as full month
2. Late fee u/s 234E for Non filing of TDS /TCS returns
- Late fee will be charged for non-filing of TDS /TCS returns within due date
- Late fee is additional to interest
- Quantum of Late Fee: Late fee will be charged @ Rs 200 per day
- Period of levy: Late fee will be levied from the due date of filing TDS/TCS returns to actual date of filing of TDS/TCS returns.
- Maximum Late fee: The late fee u/s 234E cannot exceed the total TDS/TCS amount.
- Late fee u/s 234E is applicable for all TDS/TCS returns i.e., Form 24Q, 26Q,27Q, 27EQ, Form 26QB, 26QC,26QD, 26QE
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3. Penalty u/s 271H for Non filing of TDS /TCS returns
- Penalty u/s 271H is in addition to late fee u/s 234E and Interest
- Penalty u/s 271H will be levied for Non filing of TDS/TCS return after 1 year of prescribed due date of TDS/TCS returns
- Amount of Penalty: The penalty u/s 271H will be minimum Rs 10,000 to a maximum of Rs 1,00,000
NOTE
w.e.f 01 st April 2025, Penalty u/s 271H will be levied if TDS /TCS return is not furnished within 1 month after prescribed due date of TDS/TCS returns.