Non deduction of tds
This query is : Resolved
21 January 2019
I have not deducted any TDS on interest paid as the deductee's income is below basic exemption limit but I have not submitted Form 15G. What can I do ?
22 January 2019
If the Deductor i.e you are a 44AB Assessee Then TDS to be deducted on the Payments. Having less data we could not conclude anything. For a clear clarifications consult your (or nearby) CA being non deduction of TDS will play a big role on IT assessment.
22 January 2019
The Assessee is liable for audit under section 44AB and the TDS has not been deducted.So is there any relief available as per any case laws or circular ?
04 August 2024
If you have not deducted TDS on interest payments because you believed the deductee's income was below the basic exemption limit and you did not submit Form 15G, you should consider the following steps and implications:
### Steps to Address the Situation:
1. **Submit Form 15G (If Applicable):**
- **Form 15G** is used to ensure that no TDS is deducted on interest income if the deductee's total income is below the taxable limit. Since you did not submit Form 15G, you may need to get the form from the deductee now and ensure that the TDS is not applicable.
2. **File TDS Return:**
- **Update TDS Records:** If TDS should have been deducted, you will need to file a revised TDS return to include the TDS details. This involves updating the records in the TDS return (Form 24Q or others as applicable) and paying the due TDS along with applicable interest and penalty.
3. **Pay the TDS and Interest:**
- **Deposit the TDS:** Pay the TDS amount that was not deducted earlier, along with interest for late payment, if applicable.
- **Interest and Penalty:** Calculate and pay the interest as per Section 201(1A) of the Income Tax Act, which specifies interest on delayed payment of TDS.
4. **File Revised Income Tax Return:**
- If you have already filed the income tax return, you may need to file a revised return to reflect the accurate TDS details.
### Key Sections and Provisions:
1. **Section 201(1) and 201(1A):**
- **Section 201(1)**: The payer is deemed an assessee in default if TDS is not deducted or paid. This provision allows the Income Tax Department to demand the TDS amount and levy interest.
- **Section 201(1A)**: Specifies the interest to be paid for the delay in depositing TDS. The interest is calculated at the rate of 1.5% per month or part of the month.
2. **Section 44AB:**
- The requirement for audit under Section 44AB does not affect the requirement to deduct TDS but ensures compliance with tax laws.
### Relief and Circulars:
1. **Circulars and Notifications:**
- **CBDT Circulars:** The CBDT occasionally issues circulars providing relief or clarifications regarding TDS compliance. These might include relief measures for genuine mistakes or operational issues.
2. **Judicial Precedents:**
- **Case Laws:** Judicial precedents may offer some relief in specific circumstances, such as procedural lapses or genuine errors. However, these are generally context-specific and may not universally apply.
3. **Rectification:**
- **Rectification Request:** You can request the Income Tax Department for rectification if you believe the delay or non-compliance was due to a genuine error or oversight.
### Summary:
- **Immediate Action:** File a revised TDS return, pay any due TDS, and the applicable interest. Ensure you have the correct Form 15G or any necessary documentation.
- **Consult a Tax Professional:** Given the complexities involved, it is advisable to consult with a tax professional or chartered accountant who can provide tailored advice and help with compliance and rectification procedures.
By taking these steps, you can address the issue and minimize the potential for penalties and interest.
### Steps to Address the Situation:
1. **Submit Form 15G (If Applicable):**
- **Form 15G** is used to ensure that no TDS is deducted on interest income if the deductee's total income is below the taxable limit. Since you did not submit Form 15G, you may need to get the form from the deductee now and ensure that the TDS is not applicable.
2. **File TDS Return:**
- **Update TDS Records:** If TDS should have been deducted, you will need to file a revised TDS return to include the TDS details. This involves updating the records in the TDS return (Form 24Q or others as applicable) and paying the due TDS along with applicable interest and penalty.
3. **Pay the TDS and Interest:**
- **Deposit the TDS:** Pay the TDS amount that was not deducted earlier, along with interest for late payment, if applicable.
- **Interest and Penalty:** Calculate and pay the interest as per Section 201(1A) of the Income Tax Act, which specifies interest on delayed payment of TDS.
4. **File Revised Income Tax Return:**
- If you have already filed the income tax return, you may need to file a revised return to reflect the accurate TDS details.
### Key Sections and Provisions:
1. **Section 201(1) and 201(1A):**
- **Section 201(1)**: The payer is deemed an assessee in default if TDS is not deducted or paid. This provision allows the Income Tax Department to demand the TDS amount and levy interest.
- **Section 201(1A)**: Specifies the interest to be paid for the delay in depositing TDS. The interest is calculated at the rate of 1.5% per month or part of the month.
2. **Section 44AB:**
- The requirement for audit under Section 44AB does not affect the requirement to deduct TDS but ensures compliance with tax laws.
### Relief and Circulars:
1. **Circulars and Notifications:**
- **CBDT Circulars:** The CBDT occasionally issues circulars providing relief or clarifications regarding TDS compliance. These might include relief measures for genuine mistakes or operational issues.
2. **Judicial Precedents:**
- **Case Laws:** Judicial precedents may offer some relief in specific circumstances, such as procedural lapses or genuine errors. However, these are generally context-specific and may not universally apply.
3. **Rectification:**
- **Rectification Request:** You can request the Income Tax Department for rectification if you believe the delay or non-compliance was due to a genuine error or oversight.
### Summary:
- **Immediate Action:** File a revised TDS return, pay any due TDS, and the applicable interest. Ensure you have the correct Form 15G or any necessary documentation.
- **Consult a Tax Professional:** Given the complexities involved, it is advisable to consult with a tax professional or chartered accountant who can provide tailored advice and help with compliance and rectification procedures.
By taking these steps, you can address the issue and minimize the potential for penalties and interest.
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