Now no more prosecution for delayed payment of TCS

Now no more prosecution for delayed payment of TCS if its paid by this date: Budget 2025

Budget 2025 has removed prosecution for taxpayers who failed to deposit Tax Collected at Source (TCS) despite collecting it. This is subject to the condition TCS is paid before filing the TCS return for that period. This amendment will take effect from April 1, 2025.

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Earlier the tax department used to prosecute tax payers for delay in depositing the collected TCS. Now after this amendment, only penal interest will be imposed, prosecution will not happen, provided TCS is deposited befoew the due date to file TCS return.

Due date to file TCS return

According to Rule 31AA of Section 206(C) here’s a table showing the deadlines:
TCS return deadlineSource: Income tax website

FAQs about exemption from prosecution for delayed TCS payment

Q1. What is section 276BB of the Income-tax Act, 1961?

Ans. Secton 276BB of the Income-tax Act, 1961 provides for prosecution in case of failure to pay the tax collected at source to the credit of Central Government.


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Q2. What amendment has been made in section 276BB of the Income-tax Act, 1961 in Finance Bill 2025?

Answer: Section 276BB of the Income-tax Act, 1961 has been amended to provide that prosecution shall not be instituted if the person has paid TCS to the credit of the Central Government at any time on or before the time prescribed for filing the statement under proviso to 206C (3) in respect of such payment.

Q3. What happens if person does not pay TCS even after expiry of Ɵme prescribed for filing the TCS statement under proviso to 206C (3) of the Income-tax Act, 1961?

Answer: The present provisions of section 276BB of the Income Tax Act,1961 shall continue to apply.

Q4. What is the relaxation provided to the taxpayer through the amendment in section 276BB of the Income-tax Act, 1961 in Finance Bill 2025?

Ans. Section 276BB of the Income-tax Act, 1961 has been amended to provide the relaxation from prosecution. The prosecution shall not be instituted if the person has paid TCS to the credit of the Central Government at any time on or before the time prescribed for filing the statement under provision to 206C (3) of the Income-tax Act, 1961 in respect of such payment.

Explanatory memorandum to Budget 2025 exemption from prosecution for delayed payment of TCS

Section 276BB of the Act provides for prosecution in case of failure to pay the tax collected at source to the credit of the Central Government. The provision of the said section states that if a person fails to pay to the credit of the Central Government, the tax collected by him as required under the provisions of section 206C of the Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.

It is proposed to amend section 276BB of the Act to provide that the prosecution shall not be instituted against a person covered under the said section, if the payment of the tax collected at source has been made to the credit of the Central Government at any time on or before the time prescribed for filing the quarterly statement under proviso to sub-section (3) of section 206C of the Act in respect of such payment.
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This story originally appeared on: India Times - Author:Faqs of Insurances