New Delhi, April 21 -- When a young Mumbai-based couple bought an apartment from a seller who resides outside India, they ensured that they fully complied with the rules on tax deducted at source (TDS).

They deducted the tax at source at the higher 31.2% rate (includes cess) applicable to non-resident Indian (NRI) sellers and submitted it to the tax authorities on time. However, they missed one additional step: filing an e-TDS return. Consequently, the couple, who did not wish to be named, was slapped with a penalty of Rs.80,000.

Many individuals like this couple face penalties and interest charges each year due to missed steps in TDS compliance, often stemming from limited awareness.

After the TDS amount is submitted, the deductor has...