Tax Authorities Waive Interest On TCS, TDS Payments Delayed Due To A Glitch. Here’s How This Will Help Taxpayers

The CBDT clarified that if the deductor or collector has completed the payment on time, but a system delay led to a late deposit, the interest imposed will be waived.

For taxpayers who have already paid interest on these delayed deposits, a refund mechanism has been provided.

Source : ABPLIVE AI

Taxpayers who paid Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) on time but faced delays in government deposit due to technical glitches will no longer have to bear interest charges.

In a major relief measure, the Central Board of Direct Taxes (CBDT) has issued an order allowing an interest waiver in such cases.

Issue of Delayed Deposits and Interest Charges

Several taxpayers recently reported instances where their TDS and TCS payments were made within the prescribed timeframe but were credited to the government account late due to system errors, reported The Financial Express. Despite their compliance, the Income Tax Department levied interest under Sections 201(1A)(ii) and 206C(7) of the Income Tax Act.

This led to financial stress for taxpayers who fulfilled their obligations but suffered penalties due to technical issues beyond their control. Taking note of the situation, CBDT has clarified that if the deductor or collector has completed the payment on time, but a system delay led to a late deposit, the interest imposed will be waived.

To facilitate the process, authorities such as the Chief Commissioner of Income Tax (CCIT), Director General of Income Tax (DGIT), and Principal Chief Commissioner of Income Tax (PrCCIT) have been authorised to grant such waivers on a case-by-case basis.

Process for Refunds on Already Paid Interest

For taxpayers who have already paid interest on these delayed deposits, a refund mechanism has been provided. They can apply for a refund, but the request must be submitted within one year from the end of the relevant financial year.

Who Benefits from This Decision?

This directive brings significant relief to taxpayers who received interest notices despite making payments within the stipulated deadline. The decision aims to prevent unnecessary financial strain and ensure fair treatment for taxpayers affected by system-related issues.