Section 201 - Consequences of failure to deduct or pay TDS

Failure to deduct tax at source triggers deemed assessee in default status with interest and penalty consequences.

Section 201 deems a person obliged to deduct TDS an assessee-in-default if they fail to deduct or, after deduction, fail to pay the tax, attracting interest and penalty; a proviso exempts deeming where the resident deductee has filed a return, declared the sum and paid tax with a chartered accountant's certificate. Section 201(1A) prescribes interest for late deduction and payment and amendments provide that interest is payable as per AO's order in 201(1) cases; limitation periods for making deeming orders have been updated, while no time bar applies where tax was deducted but not deposited or where recovery from non-residents is impracticable.