Bailabel Type : bailable

Description

Section 234E of the Income Tax Act, 1961 deals with the fee that is imposed on a person who has defaulted in furnishing the TDS/TCS statement or Tax Statement within the prescribed time frame as required under the provisions of the Act. It aims to ensure that statements related to tax deducted at source (TDS) or tax collected at source (TCS) are submitted timely by the deductors or collectors.

Key Points of Section 234E:

1. Applicability of Section 234E:

• Section 234E applies to deductors or collectors who are required to submit TDS/TCS statements within the prescribed due dates as per the provisions of Section 200 and Section 206C of the Income Tax Act, respectively.
• If the TDS/TCS return is not furnished within the due date, a fee will be levied under Section 234E.

2. Fee Imposed for Default:

• If the TDS/TCS return is not filed within the due date, a fee is charged under Section 234E for each day of delay.
• The fee is calculated at ?200 per day of delay.
• The fee is applicable until the defaulter files the return and regularizes the non-compliance.
• The fee is capped based on the total amount of TDS/TCS payable for the relevant statement period.

3. Maximum Fee Limit:

• The maximum fee payable is the total amount of TDS/TCS payable for the relevant statement period. This means that the fee charged will not exceed the total amount of tax deducted or collected.

4. Time Limit for Fee:

• The fee is charged for each day of delay in filing the TDS/TCS statement.
• The fee continues to be applicable as long as the statement has not been filed.

5. No Fee after Filing the Return:

• Once the TDS/TCS return is filed, the defaulter will not be liable to pay the fee under Section 234E for that period.
• However, if the return is filed after the due date, the person will be charged a fee for the delay until the return is submitted.

6. Late Filing vs. Non-Filing:

• If the statement is filed after the due date, a fee of ?200 per day will be levied for the delayed period.
• If the statement is not filed at all, the fee will still apply for the period until the return is filed.

Punishment

1. Fee under Section 234E is a financial charge imposed for the delay in filing the TDS/TCS return. It is not considered a penalty, but an additional fee for the non-compliance.
2. Penalty under Section 271H may be imposed for the failure to file TDS/TCS returns in addition to the fee under Section 234E.
3. The penalty under Section 271H is more severe and can be imposed when the defaulter does not file the return after receiving a notice.