Section 234E of the Income Tax Act, 1961, imposes a late filing fee for delays in submitting TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) statements. This provision ensures timely compliance and accurate reporting of tax deductions/collections.
- Key Provisions of Section 234E
- Applicability
-
- Applies to deductors (TDS)and collectors (TCS) who fail to file quarterly statements (Forms 24Q, 26Q, 27Q, etc.) by the due date.
- Covers all entities(individuals, companies, firms, etc.) responsible for TDS/TCS compliance.
- Late Fee Structure
-
- ₹200 per dayfrom the due date until the statement is filed.
- Maximum feecannot exceed the total TDS/TCS amount for that quarter.
- Due Dates for TDS/TCS Statements
| QUARTER | PERIOD | DUE DATE (FY 2025-26) |
| Q1 | Apr-Jun 2025 | 31st July 2025 |
| Q2 | Jul-Sep 2025 | 31st October 2025 |
| Q3 | Oct-Dec 2025 | 31st January 2026 |
| Q4 | Jan-Mar 2026 | 31st May 2026 |
- Calculation of Late Fee
Example 1:
-
- TDS deducted (Q1):₹10,000
- Filed on:17th Nov 2025 (instead of 31st July 2025)
- Delay:109 days
- Fee:₹200 × 109 = ₹21,800
- But since ₹21,800 > ₹10,000 (TDS amount), the fee is capped at ₹10,000.
Example 2:
-
- TDS deducted (Q3):₹50,000
- Filed on:15th Feb 2026 (instead of 31st Jan 2026)
- Delay:15 days (rounded to 1 month)
- Fee:₹200 × 15 = ₹3,000.
- Additional Penalties (Beyond Section 234E)
- Section 271H Penalty:
-
- If the delay exceeds 1 year, a penalty of ₹10,000 to ₹1,00,000may apply.
- Also applicable for incorrect PAN, challan details, or mismatched TDS amounts.
- Interest Under Section 201(1A):
-
- 1% per monthfor non-deduction of TDS.
- 5% per monthfor deducted but unpaid TDS.
- How to Avoid Penalties?
✔ File statements before due dates (use TRACES portal).
✔ Verify PAN, challan, and TDS amounts before submission.
✔ Pay TDS/TCS on time (by the 7th of the next month).
✔ Use digital signatures to reduce errors
