Here’s a detailed explanation of Penalty under Section 271H of the Income Tax Act, 1961, which applies to failures in furnishing TDS/TCS statements or providing incorrect information:
1. Overview of Section 271H
Section 271H imposes penalties for:
- Delayed filingof TDS/TCS statements (e.g., Form 24Q, 26Q, 27Q).
- Furnishing incorrect informationin these statements (e.g., mismatched PANs, underreported deductions).
Key Objective: Ensure timely and accurate compliance with TDS/TCS reporting obligations.
2. Penalty Amounts
| VIOLATION | PENALTY RANGE |
| Late filing of TDS/TCS statement | ₹10,000 – ₹1,00,000 |
| Incorrect information in statement | ₹10,000 – ₹1,00,000 |
Example: If a company files its TDS statement 3 months late, the penalty could be ₹1,00,000, depending on the assessing officer’s discretion.
3. Exceptions to Penalty
No penalty is levied if all three conditions are met:
- Taxes are paid: The deductor has deposited the TDS/TCS amount with the government.
- Interest/fees paid: Late payment interest (under Section 234E) and fees (under Section 234F) are cleared.
- Statement filed within 1 year: The delayed statement is submitted within 12 months of the due date.
Example: A bank files its TDS statement 8 months late but has paid all taxes and interest. No penalty applies.
4. Comparison with Other Penalties
| SECTION | APPLICABILITY | PENALTY |
| 271H | TDS/TCS statement delays | ₹10,000 – ₹1,00,000 |
| 271A | Failure to maintain books | ₹25,000 |
| 271FA | Late financial transaction reports | ₹500–₹1,000 per day |
