TDS Defaults, Late Fees & Penalties: Sections 234E, 271H & 201 Explained

TDS compliance failures can lead to heavy financial consequences.The Income Tax Act prescribes interest, late fees and penalties for different types of defaults. This WonderTax guide explains all TDS penalties clearly. Section 234E – Late Filing Fee...

TDS compliance failures can lead to heavy financial consequences.
The Income Tax Act prescribes interest, late fees and penalties for different types of defaults.

This WonderTax guide explains all TDS penalties clearly.

Section 234E – Late Filing Fee

₹200 per day
Maximum = TDS amount
Mandatory & non-waivable

Section 271H – Penalty for Incorrect TDS Return

₹10,000 to ₹1,00,000
Applicable for:
- Late filing
- Wrong PAN
- Incorrect reporting

Section 201 – Failure to Deduct or Deposit TDS

Default	Interest
Late deduction	1% per month
Late deposit	1.5% per month

Example: Late TDS Deposit

TDS deducted: ₹50,000
Deposit delayed by 2 months

👉 Interest @1.5% × 2 = ₹1,500

How to Avoid TDS Penalties

✔ Deduct TDS correctly
✔ Deposit on time
✔ File returns before due date
✔ Reconcile AIS / 26AS
✔ Respond to notices promptly

Internal Links (WonderTax)

TDS Default Correction & Notices
https://wondertax.in/services/income-tax-notice-handling
TDS Return Filing Support
https://wondertax.in/tds-return-filing

CTA – WonderTax

👉 Received TDS default notice or late fee demand?

WonderTax helps with:

TDS corrections
Interest & penalty reduction
Notice replies

🔗 https://wondertax.in