Section 206C of the Act requires the collection of tax at source (TCS) for specific transactions. Additionally, subsection 7 of section 206C stipulates an extra interest charge of one percent per month for instances of non-collection or non-payment of TCS to the central government.
Conversely, section 201(1A) establishes an interest rate of 1% for the non-deduction of TDS and 1.5% for the failure to deposit TDS with the central government.
To ensure consistency in penalizing those who do not comply with TCS collection and fail to remit the required amounts, the simple interest rate for TCS will also be increased to 1.5% per month.
This amendment will take effect from 1st April, 2025.