Tax Deduction at Source compliance: voluntary payment of outstanding TDS plus interest avoids penalty and prosecution Employers must deduct and remit tax at source on salaries, allowances and perquisites paid or provided abroad for services rendered in India; failure to do so makes the employer an assessee in default with interest and exposes them to penalties and prosecution. The Board offered a time limited concession exempting voluntary payers who remit the full outstanding TDS plus interest by the specified cutoff from initiation of penalty and prosecution proceedings, and directed wide publicity for the concession while warning of strict enforcement thereafter.