Section 201 → Section 235
Consequences of failure to deduct or pay (Assessee in Default)
Quick Answer
Section 201 of the Income Tax Act, 1961 (Consequences of failure to deduct or pay (Assessee in Default)) corresponds to Section 235 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 201
Provision Summary
If a person fails to deduct TDS or pay it to the Govt, they are treated as an 'Assessee in Default' and must pay interest @ 1% or 1.5% per month.
Sec 235
Provision Summary
Retained. Interest calculation is automated on the TRACES portal.
Key Changes & Highlights
- Liability is waived only if the payee has filed their return and paid the taxes (as per Second Proviso).
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Frequently Asked Questions
What does Section 201 of the Income Tax Act 1961 deal with?
Section 201 (Consequences of failure to deduct or pay (Assessee in Default)) If a person fails to deduct TDS or pay it to the Govt, they are treated as an 'Assessee in Default' and must pay interest @ 1% or 1.5% per month.
What is the new section number for Section 201 under the Direct Tax Code 2025?
Section 201 of the ITA 1961 maps to Section 235 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 201 under the new tax code?
Section 201 is marked as "Retained" with status "Active". Impact: High - Severe financial impact for payroll and accounts departments.
What are the key changes to Section 201 under DTC 2025?
Liability is waived only if the payee has filed their return and paid the taxes (as per Second Proviso).
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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