Failure to pay tax collected at source triggers graded imprisonment, fine, and a filing-time compliance exception.

Failure to pay tax collected at source to the credit of the Central Government attracts criminal liability, with graded punishment based on the amount involved. The penalty ranges from simple imprisonment up to two years, or fine, or both, for higher amounts, to simple imprisonment up to six months, or fine, or both, for intermediate amounts, and fine in other cases. The provision does not apply where the tax collected at source is paid to the Central Government on or before the prescribed time for filing the related statement.

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