Major Relief For Taxpayers: Tax Department Waives Interest On Delayed TDS And TCS Deposits

You may no longer need to worry about paying interest if you have paid tax deducted at source (TDS) or tax collected at source (TCS) on time, but owing to technical glitches, it was deposited late in the government account, according to a recent media report. The Central Board of Direct Taxes (CBDT) has taken a significant decision in this matter and has issued an order to waive interest in such cases. 

TDS, TCS Issue: In recent times, several taxpayers complained that they had paid TDS and TCS on time, but owing to technical difficulties, there was a delay in depositing it in the government account, according to a media report. Thanks to this, the Income Tax Department charged interest on them under Sections 201(1A)(ii) and 206C(7) of the Income Tax Act.

Comprehending this situation, CBDT has decided whether the taxpayer, deductor, or collector had made the payment within the stipulated time limit, but due to technical issues there was a delay in depositing it in the government account. In that case, the interest charge on it would get waived. 

To carry out this decision, the Chief Commissioner of Income Tax (CCIT), Director General of Income Tax (DGIT), or Principal Chief Commissioner of Income Tax (PrCCIT) has been permitted to decide on interest waivers in such cases. 

In Case Interest Has Already Been Paid: A taxpayer can apply for a refund, in case he has already paid the interest. However, CBDT has clarified that the application for an interest waiver can be made within one year from the end of the financial year. 

Who Would Be The Most-Relieved Party: The taxpayers who were facing interest notices owing to technical flaws despite making timely payments will benefit the most. While they will avoid unnecessary financial stress, they will also be able to deposit taxes under the correct procedure. 

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