Last updated: July 31st, 2024 4:16 PM

Section 271H of Income Tax

Section 271H of Income Tax Act imposes a penalty on taxpayers for not filing TDS or TCS returns. In this article, we discuss Section 271H of the Income Tax Act.

Section 271H of Income Tax

"271H. Penalty for failure to furnish statements, etc.—(1) Without prejudice to the provisions of the Act, 
a person shall be liable to pay penalty, if, he—
(a)  fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of 
section 200 or the proviso to sub-section (3) of section 206C; or
(b)  furnishes incorrect information in the statement which is required to be delivered or cause to be 
delivered under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.
(2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees 
but which may extend to one lakh rupees.
(3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be 
levied for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying 
tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, 
he had delivered or cause to be delivered the statement referred to in sub-section (3) of section 200 or 
the proviso to sub-section (3) of section 206C before the expiry of a period of one year from 
the time prescribed for delivering or causing to be delivered such statement.
(4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 
or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for 
tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.".

Note: The Union Budget 2024-25 has introduced a significant amendment to the Income Tax Act aimed at improving compliance with TDS and TCS regulations. The deadline for filing TDS/TCS statements, reducing the grace period from one year to just one month, effective from April 1, 2025.

TDS Deduction

In India, certain persons known as Deductors are required to obtain TAN registration and deduct TDS on certain types of transactions. Any person who is required to deduct TDS is required to comply with the following requirements:

• Obtain Tax Deduction Account Number or Tax Collection Account Number and quoting the same in the documents associated with TDS/TCS.
• Deduct or collection of tax at source at the applicable rates.
• Credit the tax collections or deductions to the Government.
• File the periodic TDS/TCS statements, or in other words, TDS or TCS returns.
• Issue TDS Certificate or TCS certificate in respect of tax deductions or collections.

Due Date for Filing TDS Returns

The due date for filing TDS returns for the financial year of 2018-19 is tabulated below:

Quarter Ending	Due Date for Filing TDS Returns	Due Date for Filing TCS Returns
30/6/2018	31/07/2018	15/07/2018
30/09/2018	31/10/2018	15/10/2018
31/12/2018	31/01/2019	15/01/2019
31/03/2019	31/05/2019	15/05/2019

Penalty for Late Filing TDS or TCS Return

If a person fails to file the TDS/TCS return within the stipulated date, the person will be required to pay a penalty of Rs 200 for each day of default. The amount of penalty under Section 271H cannot exceed the TDS amount. It may be noted that the TDS/TCS return can only be filed after depositing the late filing fee.

Penalty for Not Filing TDS or TCS Return

If a person fails to file TDS or TCS returns pertaining to the deduction or collection of tax at source within the stipulated date, he/she can also be penalized with a fee which is not less than Rs 10,000. The amount of penalty could go up to Rs. 1 lakh. The taxpayer will be required to pay the penal amount along with the late filing fee. The assessee will not incur any penalties under this provision if the following conditions are satisfied:

• The taxpayer substantiates the delay with a reasonable cause.
• The tax deducted or collected at source is credited to the Government.
• The late filing fee and interest (if any) should have been credited to the Government.
• The TDS/TCS return is filed within a year from the specified due date.
• Waiver or reduction of penalties has been approved by the Commissioner of Income Tax.