Penalty for not collecting TDS

Penalty for not collecting TDS

February, 21st 2007

Employers who are not collecting and depositing tax deducted at source (TDS) from the salary of their employees will have to pay heavy penalty from April 1 onward as per the indications made by the Income Tax Department. Following the information received by the Central Board of Direct Taxes (CBDT) that in a number of cases, employers as well as accounting departments in many corporates were not collecting and depositing the TDS, especially after the expansion of the provisions of TDS, in its recent circular, the department inserted a new Section 271ca to provide for imposition of penalty on any person who is responsible for collecting tax and has failed to collect TDS in accordance with the provisions of Act. This amendment will take effect from April 1, 2007, and will, accordingly, apply in relation to the assessment year 2007-08 and subsequent assessment years.

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