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Any person deducting/collecting tax at source is required to deposit such tax to the credit of the Central Government and furnish a statement of TDS on or before the due date specified on this behalf.
What are TDS and TCS?
The concept of "Tax Deducted at Source", commonly known as TDS has been introduced to ensure a regular flow of revenue to the Government. The payer of income is required to deduct tax from certain payments at the prescribed rates and deposit it to the credit of the Central Government within the prescribed time.
The provisions relating to TCS were introduced under Income-tax Act to collect tax in advance from the persons who are engaged in the business of trading in alcoholic liquor, scrap, forest produces, etc., and buy such goods under a contract. As per TCS provisions, a seller is required to collect tax from the buyer in respect of certain transactions and deposit it to the credit of the Central Govt. The tax so collected and deposited through this mechanism is called 'Tax collected at Source'.
How to deposit the TDS?
A corporate assessee and other assessees (who are subject to tax audit under section 44AB) will have to make payment of TDS/TCS electronically. To deposit the tax, the deductor/collector has to fill in the Challan No. ITNS 281.
What are the due dates for the deposit of TDS/TCS?
| Type of Deductor/Collector | Mode of payment of TDS/TCS | Due Date for deposit of TDS/TCS |
| Office of Government | Without Income-tax Challan | On the same day on which tax is deducted/collected |
| Office of Government | With Income-tax Challan ITNS 281 | Within 7 days from the end of the month in which tax is deducted/collected |
| Other Deductor | Monthly - With Income-tax Challan ITNS 281 | • For April-February Month: Within 7 days from the end of the month in which tax is deducted |
| • For March Month: On or before April 30 | ||
| Other Deductor (where AO permitted quarterly deposit of TDS) | Quarterly - With Income-tax Challan ITNS 281 | • Quarter 1: On or before July 7 |
| • Quarter 2: On or before October 7 | ||
| • Quarter 3: On or before January 7 | ||
| • Quarter 4: On or before April 30 | ||
| Any person deducting tax under Section 194-IA | With Income-tax Challan Form 26QB | Within 30 days from the last date of month in which tax is deducted. |
| Individual and HUF deducting tax under Section 194-IB | With Income-tax Challan Form 26QC | Within 30 days from the last date of month in which tax is deducted |
| Individual or HUF deducting tax under Section 194M | With Income-tax Challan Form 26QD | Within 30 days from the last date of month in which tax is deducted |
| Specified person deducting tax under section 194S | With Income-tax Challan Form 26QE | Within 30 days from the last date of month in which tax is deducted |
| Other Collector | With Income-tax Challan ITNS 281 | Within 7 days from the end of the month in which tax is collected |
What are the consequences of failure to deposit TDS or TCS?
If any person responsible for the deduction/collection of tax at source fails to deduct/collect or after deduction/collection fails to deposit the same to the credit of the Central Government, then he shall be deemed to be an assessee in default and liable to pay interest or penalty.
Further, if a deductor after deducting the tax, fails to deposit the same to the credit of the Central Government then he shall also be liable to prosecute under section 276B.