LATE FILING FEES AND PENALTY FOR FAILURE TO

FURNISH/DELAY IN FURNISHING THE TDS/TCS STATEMENTS

Before understanding the penalty provisions for failure to furnish the statement of Tax
Deducted at Source or statement of Tax Collected as Source (i.e. commonly known as
TDS/TCS return) we shall first have a look at the few basic duties of a person liable to
deduct/collect tax at source and due dates for filing of TDS/TCS return.
Duties of the person liable to deduct/collect tax at source
He shall obtain Tax Deduction Account Number or Tax Collection Account
Number (as the case may be) and quote the same in all the documents pertaining
to TDS/TCS.
He shall deduct/collect the tax at source at the applicable rate.
He shall pay the tax deducted/collected by him to the credit of the Government.
He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
He shall issue the TDS/TCS certificate in respect of tax deducted/collected by
him.
Due Dates for filing of TDS/TCS return
The due dates for filing of TDS/TCS return for different quarters of Financial Year 2021-
22 are as follows:

Quarter ending Due date for filing of TDS Due date for filing of
return (Both for TCS return
Government and other
Deductor)
30th June 2021 st
31 July 2021 15th July 2021
30th September 2021 31st October 2021 15th October 2021
31st December 2021 31st January 2022 15th January 2022
31st March 2022 31th May 2022 15th May 2022

Basic provisions
A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the
due dates prescribed in this regard has to pay late filing fees as provided under section
234E and apart from late filing fees he shall be liable to pay penalty under section 271H.
In this part you can gain knowledge about the provisions of section 234E and section
271H.

[A s amended by Financ e A c t, 2 0 2 1 ]
Late filing fees under section 234E
As per section 234E, where a person fails to file the TDS/TCS return on or before the due
date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs.
200 for every day during which the failure continues. The amount of late fees shall not
exceed the amount of TDS.
TDS/TCS return cannot be filed without payment of late filing fees as discussed above.
In other words, the late filing fees shall be deposited before filing the TDS return. It
should be noted that Rs. 200 per day is not penalty but it is a late filing fee.
Illustration
The quarterly statement of TDS i.e. TDS return for the first quarter of the year 2021-22 is
filed by Mr. Kapoor on 4-4-2022. Tax deducted at source during the quarter amounted to
Rs. 8,40,000. What will be the amount of late filing fees to be paid by him for delay in
filing the TDS return?
**
The due date for filing of TDS return for the first quarter of the year 2021-22 i.e. April
2021 to June 2021 is 31st July, 2021. The return is filed on 4th April, 2022, thus there is a
delay of 247 days as computed below:
Particulars Days
August 2021 31
September 2021 30
October 2021 31
November 2021 30
December 2021 31
January 2022 31
February 2022 28
March 2022 31
April 2022 4
Total 247

From the above computation it can be observed that there is a delay of 247 days. Late
filing fees under section 234E will be charged at Rs. 200 per day, thus for 247 days the
late filing fees will come to Rs. 49,400.
Illustration
The quarterly statement of TDS i.e. TDS return for the second quarter of the year 2021-
22 is filed by Essem Ltd. on 4-4-2022. Tax deducted at source during the quarter
amounted to Rs. 8,400. What will be the amount of late filing fees to be paid by the
company for delay in filing the TDS return?

[A s amended by Financ e A c t, 2 0 2 1 ]
**
The due date of filing the TDS return for the second quarter of the year 2021-22 i.e. July
2021 to September 2021 is 31th October, 2021. The return is filed on 4th April, 2022,
thus there is a delay of 155 days as computed below:
Particulars Days
November 2021 30
December 2021 31
January 2022 31
February 2022 28
March 2022 31
April 2022 4
Total 155

From the above computation it can be observed that there is a delay of 155 days. Late
filing fees under section 234E will be charged at Rs. 200 per day, thus for 155 days the
late filing fees will come to Rs. 31,000. However, the late filing fees cannot exceed the
amount of tax deducted at source. TDS for the quarter is Rs. 8,400 and hence late filing
fees shall be Rs. 8,400.
Illustration
The quarterly statement of tax collected at source i.e. TCS return for the first quarter of
the year 2021-22 is filed by Mr. Krunal on 4-8-2021. Tax collected at source during the
quarter amounted to Rs. 84,000. What will be the amount of late filing fees to be paid by
him for delay in filing the TCS return?
**
In case of Non-Government deductor, the due date of filing the TCS return for the first
quarter of the year 2021-22 i.e. April 2021 to June 2021 is 15th July, 2021. The return is
filed on 4th August, 2021, thus there is a delay of 20 days as computed below:
Particulars Days
July 2021 16
August 2021 4
Total 20

From the above computation it can be observed that there is a delay of 20 days. Late
filing fees under section 234E will be charged at Rs. 200 per day, thus for 20 days the late
filing fees will come to Rs. 4,000.

[A s amended by Financ e A c t, 2 0 2 1 ]
Illustration
The quarterly statement of tax collected at source i.e. TCS return for the second quarter
of the year 2021-22 is filed by Mr. Raja on 4-12-2021. Tax collected at source during the
quarter amounted to Rs. 2,520. What will be the amount of late filing fees to be paid by
him for delay in filing the TCS return?
**
The due date of filing the TCS return for the second quarter of the year 2021-22 i.e. July
2021 to September 2021 is 15th October, 2021. The return is filed on 4th December,
2021, thus there is a delay of 50 days as computed below:
Particulars Days
October 2021 16
November 2021 30
December 2021 4
Total 50

From the above computation it can be observed that there is a delay of 50 days. Late
filing fees under section 234E will be charged at Rs. 200 per day, thus for 50 days the late
filing fees will come to Rs. 10,000. However, the late filing fees cannot exceed the
amount of tax collected at source. TCS during the quarter amounts to Rs. 2,520 and
hence, late filing fees shall be Rs. 2,520.
Illustration
The quarterly statement of Tax deducted at source i.e. TDS return for the last quarter of
the year 2021-22 is not filed by Mr. Raj till 31st May, 2022. Can he file the TDS return of
last quarter of the year 2021-22 after 31st May, 2022 without payment of any late filing
fees?
**
The due date of filing the TDS return for the last quarter of the year 2021-22 i.e. January
2022 to March 2022 is 31st May, 2022. The return is not filed till 31st May, 2022 and
hence late filing fees under section 234E of Rs. 200 per day of default will be levied.
TDS return cannot be filed without payment of late filing fees as discussed above. In
other words, the late filing fees shall be deposited before filing the TDS return. Hence, in
this case, Mr. Raj cannot file the TDS return without payment of late filing fees of Rs.
200 per day.
Computation of fee under Section 234E at the time of processing of TDS/TCS
statement
Section 200A of the Income-tax Act provides for processing of TDS statements for
determining the amount payable or refundable to the deductor. Provisions of Section
200A has been amended by the the Finance Act, 2015 so as to enable computation of fee
payable under under section 234E at the time of processing of TDS statements.

[A s amended by Financ e A c t, 2 0 2 1 ]
As the mechanism of TCS statement is similar to TDS statement, a new section 206CB
has been inserted by Finance Act, 2015 to provide for processing of TCS statements on
the lines of existing provisions for processing of TDS statement contained in section
200A of the Income-Tax Act. The new section 206CB also provides for mechanism for
computation of fee payable under section 234E at the time of processing of TCS
statement.
Penalty under section 271H
As per section 271H, where a person fails to file the statement of tax deducted/collect at
source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then
assessing officer may direct such person to pay penalty under section 271H. Minimum
penalty can be levied of Rs. 10,000 which can go upto Rs. 1,00,000. Penalty under
section 271H will be in addition to late filing fees prescribed under section 234E.
Apart from delay in filing of TDS/TCS return, section 271H also covers cases of filing
incorrect TDS/TCS return. Penalty under section 271H can also be levied if the
deductor/collector files an incorrect TDS/TCS return. In other words, minimum penalty
of Rs. 10,000 and maximum penalty of upto Rs. 1,00,000 can be levied if the
deductor/collector files an incorrect TDS/TCS return.
No penalty will be levied under section 271H for the failure to file the TDS/TCS return,
if the person proves that after paying tax deducted/collected by him, along with the late-
filing fee and interest (if any), to the credit of the Central Government, he had filed the
TDS/TCS return before the expiry of a period of one year from the due date of filing the
TDS/TCS return. In other words, no penalty under section 271H will be levied in case of
delay in filing the TDS/TCS return if following conditions are satisfied:
The tax deducted/collected at source is paid to the credit of the Government.
Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one year from the
due date specified in this behalf.
It should be noted that the above relaxation is applicable only in case of penalty levied
under section 271H for delay in filing the TDS/TCS return and not in case of filing
incorrect TDS/TCS statement.
Apart from above relaxation, in following two cases the taxpayer can get relief from
penalty under section 271H:
Under section 273A(4) the Principal Commissioner of Income-tax or
Commissioner of Income-tax has power to waive or reduce the penalty levied
under the Income-tax Act. Penalty can be waived or reduced by the
Commissioner of Income-tax if the conditions specified in section 273A(4) in this
regard are satisfied.
Apart from shelter of section 273A(4), section 273B also provides immunityfrom
penalty in genuine cases. As per section 273B, penalty under section 271H will
not be levied if the taxpayer proves that there was a reasonable cause for failure.

[A s amended by Financ e A c t, 2 0 2 1 ]
Illustration
The quarterly statement of tax deducted at source i.e. TDS return for the first quarter of
the year 2021-22 is filed by Mr. Krunal on 4-4-2022. Tax deducted at source during the
quarter amounted to Rs. 84,000. Before filing the TDS return he has paid the TDS,
interest and late filing fees to the credit of the Government. Will he be liable to penalty
under section 271H for delay in filing the TDS return?
**
Penalty under section 271H can be levied for delay in filing the TDS return. In this case,
the due date of filing the TDS return for the first quarter of the year 2021-22 i.e. April
2021 to June 2021 is 31st July, 2021. The return is filed on 4th April, 2021, thus there is a
delay of 247 days (i.e. less than a year). As per section 271H(3) no penalty under section
271H will be levied in case of delay in filing the TDS/TCS return if following conditions
are satisfied :
The tax deducted/collected at source is paid to the credit of the Government.
Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one year from the
due date specified in this behalf.
In the present case, all the aforesaid conditions are satisfied because the delay in filing the
TDS return is of less than 1 year and interest and late filing fees are paid before filing the
TDS return, thus penalty under section 271H will not be levied.
The same provision as discussed above will apply in case of delay in filing the statement
of tax collected at source i.e. TCS return.
Illustration
The quarterly statement of tax deducted at source i.e. TDS return for the first quarter of
the year 2021-22 is filed by Mr. Rahul on 20-8-2022. Tax deducted at source during the
quarter amounted to Rs. 1,84,000. Before filing the TDS return he has paid the TDS,
interest and late filing fees to the credit of the Government. Will he be liable to penalty
under section 271H for delay in filing the TDS return?
**
Penalty under section 271H can be levied for delay in filing the TDS return. The due date
of filing the TDS return for the first quarter of the year 2021-22 i.e. April 2021 to June
2021 is 31st July, 2021. The return is filed on 20th Aug., 2022, thus there is a delay of
385 days (i.e. more than a year). As per section 271H(3) no penalty under section 271H
will be levied in case of delay in filing the TDS/TCS return if following conditions are
satisfied :
The tax deducted/collected at source is paid to the credit of the Government.
Late filing fees and interest (if any) is paid to the credit of the Government.
The TDS/TCD return is filed before the expiry of a period of one year from the
due date specified in this behalf.

[A s amended by Financ e A c t, 2 0 2 1 ]
In the above case, the delay is of more than 1 year and hence the above immunity will not
be available. Thus, the Assessing Officer can levy penalty under section 271H. Minimum
penalty of Rs. 10,000 and maximum penalty of Rs. 1,00,000 can be levied by the
Assessing Officer. However, Mr. Rahul has following two remedies to get relief from
penalty:
He can apply to Principal Commissioner of Income-tax or Commissioner of
Income-tax under section 273A(4) to seek relief from penalty.
He can seek relief under section 273B by proving that there was a reasonable
cause for failure.
The same provision as discussed above will apply in case of delay in filing the statement
of tax collected at source i.e. TCS return.
Illustration
The quarterly statement of tax deducted at source i.e. TDS return for the first quarter of
the year 2021-22 is filed by Mr. Sharma on 10-7-2021. The particulars of the tax
deducted at source as mentioned in TDS return are incorrect. Will he be liable to pay
penalty under section 271H for delay in filing the TDS return and for furnishing the
inaccurate particulars in the return?
**
Penalty under section 271H can be levied for following defaults:
(1) Delay in filing the TDS/TCS quarterly statement i.e. TDS/TCS quarterly return.
(2) Furnishing incorrect TDS/TCS quarterly statement i.e. TDS/TCS quarterly return.
In the present case Mr. Sharma has filed an incorrect TDS return and hence he shall be
held liable to pay penalty under section 271H. Minimum penalty of Rs. 10,000 and
maximum penalty of upto Rs. 1,00,000 can be levied. Mr. Sharma will have no remedy
under Section 271H(3) to claim relief from penalty for furnishing of inaccurate
particulars in the return. However, the taxpayer can seek relief in the following way:
He can apply to Principal Commissioner of Income-tax or Commissioner of
Income-tax under section 273A(4) to grant relief from penalty.
He can seek relief under section 273B by proving that there was a reasonable
cause for failure.
The same provision as discussed above will apply in case of delay in filing the statement
of tax collected at source i.e. TCS return.

[A s amended by Financ e A c t, 2 0 2 1 ]
MCQ ON LATE FILING FEES AND PENALTY FOR FAILURE TO
FURNISH/DELAY IN FURNISHING THE TDS/TCS STATEMENTS

Q1.As per section _____________, a person who fails to file the TDS/TCS return on or
before the due date prescribed in this regard is liable to pay a specific amount as late
filing fees.
(a) 234E (b) 271C
(c) 271H (d) 234A
Correct answer : (a)
Justification of correct answer :
As per section 234E, a person who fails to file the TDS/TCS return on or before the due
date prescribed in this regard is liable to pay a specific amount as late filing fees.
Thus, option (a) is the correct option.
Q2.As per section 234E, late filing fees will be levied at Rs. 200 for every day during
which the failure continues. However, the amount of late filing fees shall not exceed the
amount of TDS/TCS.
(a)True (b) False
Correct answer : (a)
Justification of correct answer :
As per section 234E, where a person fails to file the TDS/TCS return on or before the
due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of
Rs. 200 for every day during which the failure continues. The amount of late fees shall
not exceed the amount of TDS/TCS.
Thus, the statement given in the question is true and hence, option (a) is the correct
option.
Q3.TDS/TCS return can be filed without payment of late filing fees.
(a) True (b) False
Correct answer : (b)
Justification of correct answer :
TDS/TCS return cannot be filed without payment of late filing fees. In other words, the
late filing fees shall be deposited before filing the TDS/TCS return.
Thus, the statement given in the question is false and hence, option (b) is the correct
option.

[A s amended by Financ e A c t, 2 0 2 1 ]
Q4.If a person fails to file the statement of tax deducted/collect at source i.e. TDS/TCS
return on or before the due dates prescribed in this regard, then he can be held liable to
pay penalty under section ________.
(a) 234A (b) 271C
(c) 271H (d) 234E
Correct answer : (c)
Justification of correct answer :
As per section 271H, where a person fails to file the statement of tax deducted/collect at
source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he
can be held liable to pay penalty under section 271H.
Thus, option (c) is the correct option.
Q5.As per section 271H, minimum penalty can be levied of ________ which can go
upto_______.
(a) Rs. 5,000, Rs. 10,000 (b)Rs. 10,000, Rs. 20,000
(c) Rs. 10,000, Rs. 50,000 (d) Rs. 10,000, Rs. 1,00,000
Correct answer : (d)
Justification of correct answer :
As per section 271H, minimum penalty can be levied of Rs. 10,000 which can go upto
Rs. 1,00,000.
Thus, option (d) is the correct option.
Q6.If a person pays late filing fees as per section 234E, then he cannot be held liable to
pay penalty under section 271H.
(a) True (b) False
Correct answer : (b)
Justification of correct answer :
Penalty under section 271H will be in addition to late filing fees prescribed under section
234E. In other words, where a person fails to file the statement of tax deducted/collect at
source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he
can be held liable to pay late fees as per section 234E as well as to pay penalty under
section 271H.
Thus, the statement given in the question is false and hence, option (b) is the correct
option.

[A s amended by Financ e A c t, 2 0 2 1 ]
Q7.Apart from delay in filing of TDS/TCS return, section 271H also covers cases of
______________.
(a) Failure to deduct tax at source
(b) Failure to collect tax at source
(c) Filing incorrect TDS/TCS return
(d) Failure to comply with the provisions of section 269T
Correct answer : (c)
Justification of correct answer :
Apart from delay in filing of TDS/TCS return, section 271H also covers cases of filing
incorrect TDS/TCS return. In other words, minimum penalty of Rs. 10,000 and maximum
penalty of upto Rs. 1,00,000 can be levied if the deductor/collector does not file a
TDS/TCS return or files an incorrect TDS/TCS return.
Thus, option (c) is the correct option.
Q8.No penalty will be levied under section 271H for the failure to file the TDS/TCS
return, if the person proves that after paying tax deducted/collected by him, along with
the fee and interest (if any), to the credit of the Central Government, he had filed the
TDS/TCS return before the expiry of a period of __________ from the due date of filing
the TDS/TCS return.
(a) 6 months (b) 1 year
(c) 2 years (d) 5 years
Correct answer : (b)
Justification of correct answer :
No penalty will be levied under section 271H for the failure to file the TDS/TCS return,
if the person proves that after paying tax deducted/collected by him, along with the fee
and interest (if any), to the credit of the Central Government, he had filed the TDS/TCS
return before the expiry of a period of one year from the due date of filing the TDS/TCS
return.
Thus, option (b) is the correct option.
Q9.Under section __________ the Principal Commissioner of Income-tax or
Commissioner of Income-tax has power to waive or reduce the penalty levied under the
Income-tax Act.
(a) 273A(4) (b) 273B
(c) 271C (d) 271H
Correct answer : (a)
Justification of correct answer :

[A s amended by Financ e A c t, 2 0 2 1 ]
Under section 273A(4) the Principal Commissioner of Income-tax or Commissioner of
Income-tax has power to waive or reduce the penalty levied under the Income-tax Act.
Penalty can be waived or reduced by the Commissioner of Income-tax if the conditions
specified in section 273A(4) in this regard are satisfied.
Thus, option (a) is the correct option.
Q10. As per section 273B, penalty under section 271H will not be levied if the taxpayer
proves that there was a reasonable cause for failure.
(a) True (b) False
Correct answer : (a)
Justification of correct answer :
Apart from shelter of section 273A(4), section 273B also provides relief from penalty in
genuine cases. As per section 273B, penalty under section 271H will not be levied if the
taxpayer proves that there was a reasonable cause for failure.
Thus, the statement given in the question is true and hence, option (a) is the correct
option.

[A s amended by Financ e A c t, 2 0 2 1 ]