Calculate the fee using the statement’s tax ceiling
For the stated 2026–27 framework, section 427(1)–(2) of the Income-tax Act, 2025 imposes ₹200 for every day of continuing failure to deliver the statement referred to in section 397(3)(b) within the prescribed time. The fee cannot exceed the amount of tax deductible or collectible and must be paid before delivery of that statement. Read the current Act, sections 397, 399, 427 and 461.
The model is the lower of ₹200 × established delay days and the relevant tax deductible or collectible. This is not a blanket ₹1 lakh ceiling: that fixed ceiling belongs to the separate SFT/reportable-account fee in subsection (3). The Finance Act, 2026 substituted section 427 from 1 April 2026, so read the correct subsection instead of copying a combined late-filing chart. The law and calculations here were checked on 25 October 2026.
Fix the statement, governing period and deadline first
Identify the deductor or collector, relevant statement, period and statutory filing obligation. Use the applicable prescribed form, deadline and any valid extension for that statement. Do not confuse the tax-deposit deadline, a certificate-issue date or an internal payroll cut-off with the statement-delivery deadline. Legacy-period statements require their own transition analysis; this article does not assume that every filing made after April 2026 automatically changes its governing law.
Preserve the accepted filing acknowledgement, date and status. A local file-validation result or an upload attempt is not conclusive evidence that the required statement was delivered. If a submission was rejected, document the reason and the effective accepted submission rather than closing the delay calculation from an unverified attempt. Where delivery is disputed, resolve that factual issue before finalising the number of continuing days.
The cap uses tax deductible or collectible, not a convenient cash figure
Reconcile the underlying transactions and legally correct tax for the statement. An underdeduction, unadjusted challan or short deposit must not be used casually to reduce the statutory ceiling. Equally, do not use unrelated tax from another period to enlarge it. Maintain separate columns for tax deductible or collectible, actual deduction or collection, deposit, statement linkage and the calculated fee.
Apply the daily amount and then the ceiling once to the established failure. Where more than one statement is late, prepare separate workings for the distinct obligations; do not pool a low-tax statement with a high-tax statement merely to produce a preferred combined cap. Correction statements and an earlier valid filing need a careful chronology, not an assumption that every correction date means the original statement remained undelivered until then.
Separate the fee from interest and section 461 penalty
Section 399 processing expressly includes the section 427(1)–(2) fee, relevant interest and amounts already paid. Reconcile the processing intimation to the filed statement and payment records before making another payment. Deposit of tax does not by itself erase the statement-filing fee, and payment of the fee does not cure an unfiled statement.
Section 461 deals separately with late or incorrect statements and permits a ₹10,000–₹1 lakh penalty. Its subsection (2) protects the specified delay/non-filing case where the person proves payment of tax, fee and applicable interest and delivers the statement before expiry of the specified one-month window. That penalty protection is not a waiver of section 427’s fee and should not be extended to the separate incorrect-information limb without statutory support.
Use a reproducible close-out file
The worked dates below are expressly stipulated model deadlines, not announcements of filing dates for an unidentified form. A real file needs the operative rule or extension. The examples compute fees only; separate interest, penalty or other demands are not included in the totals. Common mistakes are using tax actually deposited as the cap, importing the SFT ceiling, stopping at an unsuccessful upload and paying the same fee again after processing.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: One established late day
Assume a specified statement is validly due on the stipulated model date and is delivered one day late. Tax deductible for it is ₹20,000. Fee = lower of 1 × ₹200 and ₹20,000 = ₹200.
Illustrative example 2: Tax ceiling binds
An established 35-day delay produces ₹7,000 before the cap. Tax deductible for that statement is ₹6,000, so fee is ₹6,000. The ₹1,000 difference is the statutory cap effect, not a credit for unrelated payments.
Illustrative example 3: No automatic ₹1 lakh ceiling
An established 600-day delay produces ₹1,20,000. With relevant tax collectible of ₹1,50,000, the fee working is ₹1,20,000. Limiting it to ₹1,00,000 would wrongly import subsection (3)’s different ceiling and understate this working by ₹20,000.
Illustrative example 4: Separate statement computations
Statement A has 10 established late days and ₹1,000 tax deductible: fee ₹1,000 after its cap. Statement B has 20 established late days and ₹10,000 tax deductible: fee ₹4,000. Combined fee is ₹5,000, with the separate statement workings retained.
Illustrative example 5: Calendar-day model
Assume the legally valid deadline is 31 July 2026 and accepted delivery is 5 August 2026. With no extension or other timing issue, the model delay is five calendar days, 1–5 August. At ₹200 a day and a ₹10,000 tax ceiling, fee is ₹1,000.
Illustrative example 6: Credit an already paid fee
A verified fee working is ₹4,000 and ₹1,500 is already paid and correctly linked to that same liability. The unreconciled fee balance is ₹2,500. Tax or interest payments cannot be substituted for that fee credit without the legally correct allocation.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the obligation | Deductor/collector, statement and relevant period. |
| 2 | Fix governing law | Current or transition-period statutory framework. |
| 3 | Establish the deadline | Applicable rule and valid extension, if any. |
| 4 | Verify delivery | Accepted acknowledgement, date and rejection history. |
| 5 | Calculate delay | Reproducible continuing-day schedule. |
| 6 | Establish the ceiling | Correct tax deductible or collectible for the statement. |
| 7 | Compute the fee | ₹200 per day followed by the statutory tax ceiling. |
| 8 | Reconcile payments | Correctly linked fee, tax and interest separately. |
| 9 | Complete statement delivery | Required fee payment and accepted filing evidence. |
| 10 | Review other exposure | Processing intimation and separate section 461 analysis. |
Sixteen practitioner FAQs
1. Which late fee is discussed here?
The specified TDS/TCS statement fee under section 427(1)–(2), not the SFT fee in subsection (3).
2. What is the daily amount?
₹200 for every day the relevant failure continues.
3. What is the ceiling?
The amount of tax deductible or collectible for the relevant statement obligation.
4. Is the ceiling always ₹1 lakh?
No. That fixed ceiling applies to the separate subsection (3) obligation.
5. Can a short deposit automatically lower the cap?
No. Establish legally deductible or collectible tax rather than simply using the cash deposited.
6. Does timely tax payment eliminate a late-statement fee?
Not by itself. Tax payment and statement delivery are different obligations.
7. Must the fee be paid before delivery?
Section 427(2)(b) expressly requires it.
8. Is an internal validation report proof of delivery?
No. Retain the accepted filing evidence and status.
9. Can a rejected upload end the calculation automatically?
Do not assume so. Establish when the required statement was effectively delivered.
10. Does every correction create a new original-filing delay?
Analyse the actual original filing and correction chronology; do not use that shortcut.
11. Are different statement caps pooled?
Prepare distinct workings for distinct late obligations rather than transferring a cap between them.
12. Does processing consider earlier payments?
Section 399 provides the processing and payment-adjustment framework; reconcile actual credits.
13. Is the fee the same as interest?
No. Interest must be analysed and reconciled separately.
14. Is section 461 penalty automatic fee arithmetic?
No. It is a separate statutory penalty provision with its own conditions.
15. Does its one-month protection waive the fee?
No. The stated protection for the delay limb itself requires payment of tax, fee and applicable interest along with timely compliance with that window.
16. What should the final file contain?
Deadline authority, accepted delivery date, day count, tax ceiling, fee calculation, payment allocation and filing acknowledgement.
Conclusion
Section 427(1)–(2) charges ₹200 per continuing day of delay for the specified TDS/TCS statement, capped at the tax deductible or collectible. Establish the correct statement deadline, filing evidence and tax ceiling; do not import the separate ₹1 lakh SFT cap or confuse the fee with interest and penalty.