Tax Deducted at Source (TDS) is an indirect method of collecting Income Tax. Payer has to deduct tax at source and also deposit TDS online with the Income Tax Department within a specified due date and file TDS Return. If TDS is deducted but not deposited by deductor, deductor is liable to pay interest and penalties. Therefore, it is very important to file TDS return on time and make payment of TDS before due dates
Due Dates to deposit TDS
| Month of Deduction | Due date for TDS Payment through Challan |
|
| *For Govt Deductor | For Other Deductor | |
| April | 7th May | 7th May |
| May | 7th June | 7th June |
| June | 7th July | 7th July |
| July | 7th August | 7th August |
| August | 7th September | 7th September |
| September | 7th October | 7th October |
| October | 7th November | 7th November |
| November | 7th December | 7th December |
| December | 7th January | 7th January |
| January | 7th February | 7th February |
| February | 7th March | 7th March |
| March | 7th April | 30th April |
*All sums deducted in accordance with the provisions of Chapter XVII-B by an office of the government without challan should deposit the same on the day of deduction. by an office of the Government without challan (Treasury Challan) should be deposited on the same day of deduction.
Consequences of non deposit of TDS
In case TDS was deducted but was not deposited by the deductor by the correct date, deductor has to make payment of interest for late deposit of TDS
- Late filing fee (for late filing the TDS return)
- Interest (for late deposit of the TDS)
- Penalty (if deductor does not file TDS return within one year of the due date)
Interest on delayed TDS deposit u/s 201(1A)
Interest is chargeable on short payment/late payment of TDS. There can be the following scenarios:-
| Scenario | Interest subject to TDS/TCS amount | Period for which interest is to be paid |
| When TDS is not deducted |
1% per month or part thereof | From the date on which TDS is deductible to the date on which TDS is actually deducted |
| When TDS is deducted but payment is made lately | 1.5% per month or part thereof | From the date on which TDS is actually deducted to the date on which such TDS is actually paid |
The deductor can make the interest payment on such late payment of TDS before filing TDS returns or demand raised by TRACES.
TDS deducted will not reflect in form 26AS
Form 26AS is an important document which shows the records of how much tax has been deposited by your deductor into the government account. When Individuals and organizations deposit the TDS and file TDS return with the government against your PAN, it automatically shows in your Form 26AS. Payee cannot take a tax credit of the TDS while filing income tax return. If payee takes the tax credit for this amount, they will receive a notice from the income tax department for the mismatch in the TDS claimed and taxes paid.
Therefore, It is better to preserve the proofs in relation to TDS such as payslips, bank account statements, any form of other communication done with the employer in this regard, etc. Also, it is suggested to review the Form 26AS regularly to confirm whether the TDS was deducted or if the deductor has deposited the TDS.
Remedies to deductee under the Income Tax Law
As discussed, deductee should preserve the proofs related to TDS deducted as well as regularly check 26AS on e-filing portal of Income Tax. If deductee is having valid proof about deductor not depositing the TDS, it is best to bring this to his notice before taking further steps. If deductor does not respond even after repeated requests, deductee can take action by filing a written complaint to your assessing officer.
Also, To avoid the delay from companies in depositing TDS and filing returns, the Central Board of Direct Taxes (CBDT) has become more strict and started imposing penalties on companies that are not complying with the rules. Apart from interest on late payment of TDS, penalty of INR 200 per day is applicable till the day on which deductor files the return. Provided that the amount of Penalty will not exceed the number of TDS payable.
Moreover, Assessing officer may direct a person who fails to file the return within the due date to pay a penalty minimum of INR 10,000 which may extend to INR 1,00,000. The penalty under this section is also applicable to the cases of incorrect filing of TDS return. Further, If a person fails to pay TDS to the credit of the Central Government, as required , he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.
FAQs
TDS refund can be claimed when
1. The amount of tax which is payable in a year is less than the amount already deducted as TDS.
OR
2. When the income of a person is below the minimum taxable limit and yet TDS has been deducted.
Sometimes, the tax deducted from your account may be deposited to an incorrect PAN account by mistake. You can discuss this with deductor and make a request to revise the TDS payment.
No, TDS is not deductible if person is making payment to the Government.
Hey @riya_gupta
Yes, you can claim all the TDS Deducted by your employer while filing ITR. If the deducted TDS is more than your total tax liability then refund of the same will be issued once filed ITR is processed by the IT Department.
Read more about ESOP Taxability here
Hi @Jammu_Kashmir_Unity
First, ensure that you have all the necessary documents and proof regarding the TDS deductions and deposits. Keep a record of the TDS certificates and any communication you’ve had with the deductee organization and the IT Department.
Since the deductee organization is not rectifying the previous year’s return. You can consider reaching out to the Income Tax Department directly and raising a grievance request about the same. Provide them with all the evidence and details you have, clearly explaining the discrepancy and the failure of the deductee organization to rectify the return.
Hi @Akshay_Shinde
You can read about Section 54F of Income Tax on sale of LTCA except house- Learn by Quicko which states that a taxpayer can claim an exemption on the sale of long-term capital asset except for house property if the taxpayer invests the sale consideration in the purchase or construction of a residential house property.
Hi @Akshay_Shinde
54F exemption is available if you invest the sales proceeds from the LTCA in the purchase or construction of a house property.
For more clarity about the taxation aspect, please refer to this article or you can Ask an Expert
Hi @Vinil_Vasani
The employee has a right to exercise the ESOP on the exercise date. However, if the employee does not exercise the same, there is no tax implication for the employee.
Hi @Vinil_Vasani
Yes, you will have to declare the ESOPs granted until they are vested in schedule FA while filing your ITR.
Hi @Priya_Bagade
In case of a refund of TDS of ESOPs, we need more information. On the basis of the available info, we cannot tell anything. You can Ask an Expert for the same.
Hi @Shrinivas_Shukla
ESOP allows an employee to buy a company’s stock below-market price. It also offers ownership interest to employees.
The exercise price is usually lower than the stock’s prevailing FMV. So, when the employee exercises the option, i.e., agrees to buy; the difference between the FMV (on exercise date) and exercise price is taxed as a prerequisite under Salary.
Budget 2020 amendment – From the FY 2020-21, an employee receiving ESOPs from an eligible start-up need not pay tax in the year of exercising the option.
Hey @Kiruba_v,
The period of holding is calculated from the exercise date up to the date of sale. Here’s a detailed read on ESOPs Taxation for you!
Hope this clarifies!