Income Tax Department Issues TDS Demand Notice to Swiggy
Food delivery giant Swiggy Limited has been served a tax demand notice by the Income Tax Department’s TDS Circle in Bangalore for the financial year 2017–18. The notice alleges non-compliance with Section 194C of the Income Tax Act, which mandates TDS on payments made under contractual agreements. In this case, the issue pertains to cancellation charges paid to merchants, which the department claims should have been subject to TDS.
Tax and Interest Breakdown
The Deputy Commissioner of Income Tax has demanded ₹53.47 lakh in unpaid taxes and an additional ₹45.44 lakh as interest—bringing Swiggy’s total liability to ₹98.91 lakh. The notice indicates that Swiggy failed to deduct tax at source on these payments, thereby violating TDS provisions.
This case underscores the critical importance of adhering to TDS obligations, as lapses can lead to substantial financial and legal consequences for businesses
Understanding TDS (Tax Deducted at Source)
Tax Deducted at Source (TDS) is a tax collection mechanism under the Income Tax Act, 1961, aimed at collecting tax right at the point of income generation. It mandates that certain payments—such as salary, rent, interest, commission, or professional fees—be subject to tax deduction by the payer before disbursing the amount to the recipient. The deducted amount is then deposited with the government, and the deductor is responsible for filing regular TDS returns that reflect these transactions
Why TDS Compliance Matters
Adhering to TDS rules is not only a legal obligation but also a best practice for maintaining financial transparency. Here’s why it’s essential:
Legal Mandate: TDS compliance is compulsory. Non-compliance can result in penalties, interest charges, and even prosecution.
Avoid Penalties: Timely deduction and payment of TDS prevent late fees and interest liabilities.
Improved Transparency: Proper TDS reporting makes it easier during audits and tax assessments, enhancing the credibility of business transactions.
Enhanced Reputation: Consistent TDS compliance signals professionalism and integrity to stakeholders, including clients, partners, and regulators
TDS Due Dates: Payments and Returns
TDS Payment Due Dates
Monthly Deadline: On or before the 7th of the following month.
Exception – March Deductions:
Non-Government Deductors: By April 30
Government Deductors: By March 31
TDS Return Filing Deadlines
Quarter | Period | Due Date |
|---|---|---|
Q1 | April – June | 31st July |
Q2 | July – September | 31st October |
Q3 | October – December | 31st January |
Q4 | January – March | 31st May |
Penalties for TDS Non-Compliance
Delayed Deduction: Interest at 1% per month or part thereof.
Delayed Payment: Interest at 1.5% per month or part thereof.
Late Return Filing: ₹200 per day until the return is filed, subject to the total TDS amount.
Non-Deduction or Non-Payment: Assessing Officer may impose a penalty equal to the amount of TDS not deducted or deposited
How IndiaFilings Can Help You Stay TDS Compliant
Avoid costly mistakes with expert-led TDS support from IndiaFilings. We offer:
Accurate TDS Deduction & Timely Payment
Error-Free Quarterly Return Filing
Compliance Monitoring with Automated Alerts
Legal Support in Case of TDS Notices or Disputes
Stay compliant, avoid penalties, and streamline your tax process—partner with IndiaFilings for end-to-end TDS management
About the Author
Manisha
Manisha is a seasoned content writer with expertise in business registration, tax laws, trademark regulations, and corporate compliance. His articles break down complex legal and regulatory topics into practical insights, empowering entrepreneurs and business owners to confidently manage legal requirements and stay compliant with ease
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