What will happen if TDS is not deducted?

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Failure to deduct Tax Deducted at Source (TDS) as required by the Income Tax Act attracts significant consequences for the deductor, including the levy of interest, penalties, and potential prosecution.

Is it mandatory to file ITR if TDS is not deducted?

TDS ≠ Irrelevance of ITR

It is a part of your tax liability, and if your total income exceeds the exemption limit, you must file an ITR, even if TDS has already been deducted. ITR reconciles all income & tax paid: When you file an ITR, you are declaring all income, including salary, interest, capital gains, etc.

Can I pay TDS after due date?

Yes, TDS can be paid after the actual due date, including in cases such as property registration. However, delaying the payment can result in interest charges and penalties under the Income Tax Act.

Is it mandatory to pay TDS?

Every employer must deduct TDS on salary at what is known as the 'average rate of income tax' of the employee for the year. It is denoted as Average Income tax rate = Income tax liability (arrived at based on slab rates) divided by the employee's predictable income for the assessment year.

How much TDS is deducted on a 70,000 salary?

Therefore TDS on Salary would be 9.56% of Rs. 70,000 i.e. Rs. 6695 would be deducted every month as TDS on Salary.

TDS Not Deducted or Not Deposited – What will happen if TDS is not deducted?

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How can I avoid TDS on my salary?

You can submit Form 15G or 15H to avoid the TDS. In the case of senior citizens use Form 15H. If there is no tax on the total income, it may be submitted.

How does TDS affect my tax return?

There's no specific form or process to claim TDS refunds. You usually just need to file your income tax return. If the TDS deducted from your salary is more than your actual tax liability, the excess amount will be due as a refund and reflected in your return.

Is TDS 100% refundable?

Q- Is TDS 100% refundable? The amount of TDS refund you receive depends on the amount of tax liability you have. For example, if your income is not taxable, still your TDS was deducted, and you might be eligible for a 100% tax refund.

Can I claim TDS refund?

When your employer deducts more than the income tax payable: In case your taxable income is below the basic exemption limit, you can avoid TDS deduction from your salary. If the actual tax payable is less than the TDS, you must file Income Tax Return (ITR) to claim TDS refund.

What are the new rules for TDS payment?

New TDS Limit for Regular Depositors

The government has raised the TDS exemption limit for non-senior citizens from Rs. 40,000/- to Rs. 50,000/-. This means TDS will only be deducted when your interest income from bank deposits exceeds Rs.

Can I pay tax on Sunday?

According to a circular issued by the Central Board of Direct Taxes (CBDT) way back on January 14, 1994 (Circular No. 676), if a tax deadline falls on a public holiday, the deadline is automatically extended to the next working day.

What are common TDS return filing mistakes?

Wrong PAN, TAN, or Section Mapping During Data Entry

Incorrect TAN, PAN, or section selection is a common issue that leads to mismatch in Form 26AS or deductee credit failures. Many businesses mistakenly use incorrect section codes like 194C instead of 194J.

What if I forgot to deduct TDS?

Levy of Interest:

Any individual who is liable to deduct TDS but fails to deduct it wholly or partly, or does not pay it to the government, will be subject to pay interest. The interest rate is: One percent per month or part of a month on the TDS amount from when TDS was to be deducted.

What is the minimum salary to file an ITR?

Gross income - Individuals with a gross income of ₹2.5 lakh or more in a financial year must file income tax returns. However, the limit for citizens aged between 60-79 is ₹3 lakhs in a financial year, and for citizens above 80, it is ₹5 lakhs.

Will the IRS catch me if I don't file?

The IRS may also impose a wide range of civil and criminal sanctions on persons who fail to file returns. If you owe tax and your return was not filed by the due date, including extensions, you may be subject to the failure to file penalty, unless you have reasonable cause for not filing.

How to claim 100% TDS?

Follow these steps to claim your TDS refund smoothly:

  1. Calculate Total Tax Liability.
  2. Collect TDS Details.
  3. File Income Tax Return (ITR)
  4. Verify Your Return.
  5. Wait for Refund Credit.

Can I get a refund after 3 years?

You can't get a credit or refund if you don't file the claim within 3 years of filing your original return, or 2 years after paying the tax, whichever is later, unless you meet an exception that allows you more time to file a claim.

How can NRI claim TDS refund?

To claim a refund of the TDS Deducted, the NRI would be required to file an income tax return in India after the end of the financial year. While filing the Income Tax Return, the NRI would be required to self compute his income and the income tax liability as per the slab rates.

Is TDS refunded automatically?

The only way to get a TDS refund is by filing your ITR for the relevant financial year. Inside the return form, enter your income, deductions, and the TDS already deducted. If your tax liability is lower than the TDS deducted, the difference becomes your refund automatically.

What is the minimum amount of TDS?

Section 194C provides for TDS on works contract, TDS needs to be deducted at 2% for payments exceeding Rs 30,000 per expense or Rs 1 lakh per annum. Under section 192, TDS for salary is deducted at the applicable slab rates. Under section 194A, TDS does not need to be deducted for payments up to Rs 50,000 for the year.

Who is eligible for a TDS refund?

Here's who can benefit: Salaried Employees: If your employer deducted more TDS than necessary, you can claim a refund when filing your ITR. Freelancers & Self-Employed Individuals: If clients deducted 10% TDS from your payments, but your actual tax liability is lower, you can get a refund.

How can I check my TDS status?

Status of TDS/TCS Statement

  1. Step – I. Visit https://contents.tdscpc.gov.in/
  2. Step – II. Login using the User ID, Password and TAN.
  3. Step – III. Go to statements/ payments tab and click on 'statement status'

What are the disadvantages of TDS?

High TDS can lead to health issues like kidney stones, digestive problems, and dehydration. It also causes scaling in appliances, reducing their efficiency and lifespan.

How much TDS is tax free?

40,000 per year is exempted from TDS deduction. This means if the interest earned on Fixed Deposits in a financial year is up to Rs 40,000, no TDS on interest on Fixed Deposit is deducted. This limit is Rs. 50,000 for senior citizens.