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TDS Return Filing
What is TDS return filing?
- TDS return filing is a quarterly statement submitted to the Income Tax Department by the deductor.
- It’s essential to file TDS returns on time.
- The process can be completed online.
- Details required for filing TDS returns include:
- PAN of the deductor and deductee.
- Amount of tax paid to the government.
- TDS challan information.
- Any other relevant details.
What is TDS?
- Tax Deducted at Source (TDS) is a system where the government collects tax at the time of certain transactions.
- The tax is deducted either when the money is credited to the recipient’s account or when the payment is made, whichever happens first.
- For salary payments or life insurance policies, the tax is deducted when the payment is made.
- The entity making the payment deducts the tax and pays it directly to the Income Tax Department.
- Typically, TDS is deducted at a rate of 10% of the payment amount.
What is TAN?
- TAN, which stands for Tax Deduction and Collection Number, is a 10-digit alphanumeric code required by those responsible for deducting or collecting tax on behalf of the government.
- Salaried individuals don’t need to get a TAN or deduct tax at the source.
- Proprietorships, companies, and other entities must deduct tax at the source for certain payments exceeding Rs. 2,40,000 annually, such as salaries, contractor fees, and rent payments.
- Filing Champs offers assistance in obtaining TAN registrations.
- Entities with a valid TAN registration must file their TDS (Tax Deducted at Source) returns every quarter.
- Our TDS experts can help in calculating TDS payments and filing the necessary forms as per TDS requirements.
Eligibility Criteria
Who can file TDS returns?
- TDS returns are filed by companies or employers with a valid Tax Deduction and Collection Account Number (TAN).
- Any individual or entity making certain payments specified under the Income Tax Act must deduct taxes at the source and deposit them within the designated time frames.
- These payments include:
- Salaries
- Income from securities
- Winnings from lotteries, puzzles, etc.
- Winnings from horseraces
- Commissions from insurance
- Payments related to the National Savings Scheme, among others.
Due Date for TDS Return filing
What are the due dates for TDS return filing?
- The due date for payment of TDS deducted is the 7th of the following month.
- For filing TDS returns, the due dates are as follows:
- 1st Quarter (April to June): July 31, 2022
- 2nd Quarter (July to September): October 31, 2022
- 3rd Quarter (October to December): January 31, 2023
- 4th Quarter (January to March): May 31, 2023
- Note: For the quarter ending on September 30, 2022, the due date for furnishing the TDS Statement in Form 26Q has been extended to November 30, 2022, as per Circular 21/2022.
TDS return filing procedure
How to file TDS returns online?
- Step 1: Fill Form 27 A, ensuring all columns are completed. Verify the hard copy with the electronically filed E-TDS return.
- Step 2: Accurately fill in the deducted tax and total payment amounts, ensuring they match.
- Step 3: Mention the organization’s TAN on Form 27 A to avoid verification issues.
- Step 4: Provide the correct challan number, payment mode, and tax details. Incorrect details may lead to filing discrepancies.
- Step 5: Use the standard Form for e-TDS filing and enter the 7-digit BSR for easier reconciliation.
- Step 6: Submit physical TDS returns at a TIN FC managed by NSDL, or online via the NSDL TIN website.
- Step 7: Upon correct submission, receive a token number or provisional receipt as proof of filing.
- Step 8: If rejected, receive a non-acceptance memo detailing reasons for rejection. Rectify and re-file the returns accordingly.
TDS Return Form
What are the different types of TDS Forms?
- Form 24Q: Filed quarterly, it covers TDS from “Salaries”.
- Form 26Q: Also filed quarterly, it includes TDS statements for all payments except “Salaries”.
- Form 27Q: Quarterly statement for TDS from interest, dividends, or other payments to non-residents.
- Form 27EQ: Filed quarterly, it’s for reporting tax collected at source.
TDS Form 24Q
Section 192 of the Income Tax Act of 1961 requires employers to deduct TDS when paying an employee’s wage. An employer is required to file salary TDS returns in Form 24 Q, which must be submitted quarterly. Form 24 Q specifies the salary details paid to employees as well as the TDS withheld from the payment. In other words, Form 24 Q is a quarterly statement of payments paid to employees and TDS deducted by the deductor.
TDS Form 26Q
When a taxpayer pays taxes, the payee deducts TDS on specific occasions. Form 26Q is used to file TDS data for payments other than salary. The form specifies the total amount paid during a specific quarter as well as the TDS amount deducted. Form 26 Q must be submitted at least once per quarter.
Form 27Q
Form 27 Q is a TDS return or statement that gives information about the tax deducted at source on non-salary payments made to non-resident Indians and foreigners. Form 27 Q must be submitted every quarter on or before the due date. Form 27 Q contains payment details, and the deductor pays the NRI the TDS deducted on those payments.
Form 27EQ
Form 27 EQ contains all details about tax that is collected at the source. According to Section 206 C of the Income Tax Act 1961, this form has to be filed every quarter. The Form has to be submitted by both corporate and the government collectors and the deductors.
What is a TDS Certificate?
- Issued by deductors after deducting TDS.
- Contains a unique 7-digit certificate number and TRACES watermark.
- Deductees must retain these certificates.
- Issued quarterly for payments other than salaries and annually for salary payments.
- Duplicate certificates can be obtained if lost.
Penalty for Late Filing:
- Section 234E imposes a penalty of Rs. 200 per day for late TDS returns filing.
Non-Filing Penalty:
- Additional penalty if returns aren’t filed within a year or if false information is provided.
- Minimum penalty is Rs. 10,000, maximum is Rs. 1 million.
Revised TDS Returns:
- If errors are found, revised returns must be filed to ensure correct tax credits.
- Initial return must be approved by TIN central system before filing revised return.
- Latest consolidated TDS statement needed for revised returns.
Claiming TDS Return:
- Deductees must include TDS information in their income returns.
- Accuracy is crucial to avoid processing issues.
TDS Return Filing FAQs
Concept: TDS ensures tax payment at the source to curb evasion.
Calculation: Deduct exemptions from gross monthly income, multiply by 12 for yearly income, and compute TDS.
Penalty: Late payment incurs interest or penalties, up to Rs. 1,00,000, as per TRACES demand.
Duration: Refunds are processed within 30-45 days of e-verified income tax returns.
Eligibility: Employers or organizations with a valid TAN deduct taxes for specified payments under the Income Tax Act.
Penalty: Late filing incurs a minimum penalty of Rs. 10,000, extendable to Rs. 1,00,000.
Reflection Time: TDS reflects in Form 26AS within 30-45 days, depending on the efficiency of the company's accounts department.
Necessity: If taxable income is below the tax limit, no additional tax is required after TDS deduction.
Issuer: Employers issue Form 16/16A certifying tax deductions for transactions between the deductor and deductee.
Platform: TRACES is an online portal aiding in TDS reconciliation, connecting stakeholders in tax deduction processes.
Definition: TDS is tax deducted on payments exceeding certain limits, while TCS is tax collected by sellers on certain goods.
Summary: Form 27A summarizes e-TDS/TCS returns, containing control totals of amount paid and tax deposited at the source.
Frequency: Form 26Q is submitted quarterly for TDS reporting.
