Consequences of TDS defaults

Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):

Default/ Failure	Section	Nature of Demand	Quantum of demand or penalty
Failure to deduct tax at source	201(1)	Tax demand	Equal to tax amount deductible but not deducted
	201(1A)	Interest	@1 % p.m. of tax deductible
	271C	Penalty	Equal amount of tax deductible but not deducted
Failure to deposit tax at source	201(1)	Tax demand	Equal to tax amount not deposited
	201(1A)	Interest	@1.5% p.m. of tax not deducted
	276B	Prosecution	Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine
Failure to apply for TAN No. u/s 203A	272BB	Penalty	Rs. 10000
Failure to furnish prescribed statements u/s 200(3)	272A(2)(k)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to issue TDS certificate u/s 203	272(A)(g)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount.
Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C)	272(A)(i)	Penalty	Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to mention PAN of the deductee in the TDS statements and certificates	272B	Penalty	Rs. 10000

 If TDS return is not filed within the specified due dates being 15th July, 2013 for the 1st quarter corresponding to FY 2013-14, the major consequences would be levy interest.

However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.

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