Fee u/s 234E & Penalty u/s 271H

Applicability of Sections 234E and 271H in respect of fee and penalty for delay in furnishing TDS/ TCS quarterly statement and penalty for incorrect information in TDS/ TCS statement.

Section 234E – Fees for defaults in furnishing quarterly returns:

Section 234E is applicable in respect of quarterly TDS/ TCS return which is to be submitted on or after July 1, 2012.

If a person fails to deliver TDS/ TCS return within the prescribed time [sec 200(3) and/or sec 206(3)] he shall be liable to pay, by way of FEE, a sum of Rs. 200 for each day of failure.

However the fee amount should not exceed the amount of tax deductible/collectible.

With effect from July 1, 2012 it would not be possible to file a belated quarterly TDS/TCS return without payment of fees under 234E.

Section 271H: Penalty for failure to furnish quarterly TDS/ TCS return:

271H has been inserted to levy penalty in addition to the fees under section 234E; Section 271 H is applicable in respect of quarterly TDS/ TCS return which is to be submitted on or after July 2012.

A person has to pay a PENALTY of not less than Rs. 10000. It may be extended to Rs. 1,00,000.

This penalty under section 271H will be applicable under the following cases:

  1. If a person fails to submit quarterly TDS/ TCS return on or before the due date u/s 271H(1)(a)
  2. If a person furnishes incorrect information in these quarterly returns u/s 271H(1)(b)
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8 comments on “Fee u/s 234E & Penalty u/s 271H

  1. Section 234E of the Income Tax Act- Legality and Validity challenged in the High Court of Kerala
    The legality and validity of section 234 E of the Income Tax Act, 1961 inserted by the Finance Act, 2012 making a person liable to pay, by way of fee, a sum of Rs 200/-for each day’s delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) is challenged in the High Court of Kerala. The levy in the nature of ‘fee’ has been challenged as illegal, arbitrary, unreasonable, invalid and unconstitutional, in a writ petition filed by a Lower Primary School in Kannur.
    The Honourable High Court has admitted the writ petition and has stayed all the proceedings initiated against the petitioner under section 234E of the Income Tax Act for a period of two months. The standing counsel for the Income Tax department has taken notice for all the respondents in the writ petition.

    arunrajs@justice.com

  2. The Institution in which I am working also received such notices for remittance of
    late fee (FY:2013-14) under section 234E for an amount exceeding Rs.80000. Can you pls advise what steps to be taken further in this case to waive the fee.

    • I would suggest you to move before the High Court challenging the validity of section 234E of the Income Tax Act and also state the reasonable and sufficient reason for not filing the statement in time.

  3. THERE ARE SOME GOVT.OFFICES BY WHOM TDS RETURN WAS FILED ON 29.10.2013 FOR QUARTER ENDING ON 30.09.2013. BUT THERE IS ALSO NOTICE FOR LATE FILING IS ARISES. HOW IS IT POSSIBLE WHEN DUE DATE FOR GOVT.EDUCATORS IS ONE MONTH AFTER ENDING QUARTER.

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