Hyderabad: Several public and private institutions have been served notices by the income tax department to pay lakhs of rupees as penalty for delay in filing quarterly returns (statements) of TDS (tax deducted at source), under the new rule 234 E of the Income Tax Act of 2012.
According to 234 E, which came into effect from June 2012, the IT department can levy Rs 200 for each day’s delay in filing TDS or TCS (tax collected at source).
All public and private institutions in the state have been receiving unexpected notices for late fee from December 1, 2013 (for the period of five quarters starting from June 2012). The late fee payment with accrued interest has to be paid within 30 days of receiving the notice.
This is a heavy burden for small firms as the late fee is almost equivalent to the actual TDS amount. Many of those who got the notices say they were unaware of the new rule.
The MD of a city-ba-sed software solutions firm said that he has over a dozen employees. “Quarterly TDS of my company is around Rs 30,000. But the late fee levied along with the interest is Rs 29,750 (late fee of Rs 26,600 and interest of Rs 3,150).
In the notice I received, the total amount I need to pay crossed Rs 1.5 lakh,” he said. “How can we pay such a huge amount? We were not even given a prior notice. They should intimate us when we are paying monthly TDS.”
Heads of several government schools too were shocked to get notices demanding payment of Rs 80,000 and above.
“We just got to know about the monthly deduction of TDS. I was surprised to get the late fee penalty of RS 1.09 lakh as I’ve ensured that the monthly TDS is being paid,” said the headmaster of a government school in Nampally.
Kota Sashidhar, executive member of the AP Upadhyaya Sangam, said, “We don’t know about the new norm of TDS. No prior notice was given to us. It is outright cheating.”
There is no provision for waiver of either the late fee or the interest. While Atul Pranay, IT (TDS) commissioner, AP, refused to speak on the issue, IT chief commissioner, AP, Bibhar Datta, said he was busy.
