Impacts of Non-issuance of TDS certificate within time

There is a grievance that often the tax deductors fail to issue TDS certificate in spite of many reminders by the deductee for such issue. One should know what to do in case of non issuance of TDS certificate by the tax deductors.

If TDS return is not filed within the due date which is 15th July for the 1st quarter, the main consequence would be levy interest.

However, in case of payments made under sections 194A, 194C, 194H, 194I and 194J for individuals and HUFs, only if the turnover is more than a sum of Rs. 1 Crore in the previous year, deduction of tax at source is required.

Form 16,16A & 27D deals with TDS Certificates and Form 24Q, 26Q, 27Q & 27EQ deal with TDS statements.

Form 16: TDS on Salary Payment Certificate:

Form 16 is a certificate issued under the provisions of section 203 of the Income Tax Act, 1961. It is issued by the Employer to the Employee. This certificate is a proof of Tax deducted at Source. It is issued in favour of the person from whom TDS has been deducted.

Form 16A: TDS on other than Salary Payment Certificate:

Form 16A is a certificate issued under the provisions of section 203 of the Income tax act, 1961. It is issued by the deductor to the Deductee. It can be a proof of Tax deduction.

Time limit of Issuing TDS Certificate:

One should apply for TDS Certificate within 15 days of filing the TDS Return.

Penalty for not issuing TDS Certificate on time:

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Penalty for not providing certificates is Rs. 100/- for each day of delay or the amount of TDS whichever is higher.

Form 24Q is a TDS statement in respect of salary. Every Employer who is deducting TDS on payment of salary to employee is required to deposit the amount to Central Government and thereafter file TDS return. Form 24Q is to be filed quarterly.

On the other hand, every person who is deducting TDS on payment towards expenses other than salary is required to deposit the TDS deducted to Central Government and thereafter file a return.

Such a statement of TDS on Payment of expenses other than salary is filed quarterly.

Form 27Q for NRIs:

It is similar to Form 26Q. The only difference is that form 26Q applies to domestic assessee but form 27Q applies to NRI.

When no penalty is levied:

The penalty which is levied by the department can be waived off or the amount could be changed if there is genuine reason of failure. However fees levied by the department cannot be waived off. The amount is fixed and the assessee is under the obligation to submit the same to the government.

If an assessee is under bonafide belief that if the tax has not been deposited to the Government, no certificate under section 203 can be issued and such a bonafide belief comes within the scope of section 273B which states that no penalty is levied in case of bonafide reasons.