TDS Filing

TDS FILLING

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    TDS FILLING

    TDS Return Filing

    In simple words, Tax Deduction at Source has come to refer as the deduction of tax in respect of income, based on certain specified expenses incurred by those persons or organisations who are involved in the exercise of tax deductions at source. They are legally obligated to file TDS returns, meaning that they need to provide quarterly information relating to the details of the deductions. While the process of TDS returns is no cakewalk, India Filings guides you with expert assistance for the purpose. Our teams guide you step by step to ensure all of your TDS return filing processes are both accurate and compliant, ensuring your business smoothly navigates the tax regime intricacies.

    Let India Filings simplify your TDS return filing today – get expert assistance to ensure accurate and timely compliance.

     

    TDS – Tax Deducted at Source

    TDS is the acronym for Tax Deducted at Source, a process through which the income tax is automatically deducted from a person’s payments on various transactions such as salary, rent, interest, professional fees, and commission. Ordinarily, the recipient pays the income tax. In such case, with the help of TDS, the government could collect the tax up front from the payments, thereby making the tax collection process prompt.

    The amount received after deduction of TDS is the net income of the receiver. He has to report the same in the return of tax gross before the amount deducted on account of TDS.

     

    What is TDS return filing?

    Besides paying the tax, the deduct or must file TDS returns. A TDS return is a quarterly statement that brings all transactions under Tax Deducted at Source for a particular quarter. The TDS return has to be filed quarterly so that all taxes are in compliance and there is no possibility of penalty. Once the TDS returns are made, the entire details shall reflect on Form 26 AS. While filing the TDS returns, all details which need to be mentioned are:
    • Permanent Account Number of the deduct or and the payee.
    • Details of the TDS payments.
    • Details about the deposit challans.
    • This is also reflected in Form 26AS for the payee.
    • Filing of TDS return is a mandatory process for those falling within the income tax brackets.
    • The required persons can file through the official e-filing portal of the Income Tax Department.

     

    Who is Required to File a TDS Return?

    Obligations in filing TDS returns also lie with employers and other organizations that hold a TAN, or Tax Deduction and Collection Account Number. Both those audited under Section 44AB and government and corporate employees are mandatorily required to file their TDS returns online quarterly.

    As various entities, be it individual, collective, Hindu Undivided Families (HUFs), corporations, local authorities, partnerships, and any other associate, have been brought under TDS as the deduct or of the income.

    Under the Income Tax Act, returns of TDS are required for the following type of transactions:
    • Salaries Payable
    • Income from securities
    • Winnings of lotteries, puzzles, and more
    • Winnings of horseracing
    • Commission earned from insurance
    • Consideration received in respect of National saving scheme and many more

     

    TDS Deduction Rates

    For TDS, the income is charged differently from source to source, namely salary, professional charges, commissions received, rents paid, and interest on investments. The rate applied would depend on the source and aggregate amount of income. For every type of income, there is a different TDS rate, which is basic for effective tax management. TDS is levied on only that which exceeds certain prescribed limits. Based on taxable income, rates range from 1% to 30%. Knowing these rates proves essential for effective management of taxes.

     

    Why is TDS Return Filing Essential?

    TDS returns must be filed with a view to fulfil legal compliances and abide by the tax laws. Here’s the reason why TDS filing is necessary:
    • Legal Compliancy: All those entities and individuals who are liable to deduct tax at source are required by law to submit TDS returns. In case of non-compliance, the legal consequences included penalties would be incurred. It maintains a record of the deductions made at the source of income as well as provides a record of the payment of tax made to the concerned authorities. Filing TDS return is a proof that the taxpayers have deducted the right amount of tax and have remitted the same on behalf of them.
    • Redemption of Tax Deducted at Source: While submitting TDS returns, the amounts deducted at source can be set off against the total tax payable in the course of a year to ensure that not too much amount is paid towards tax.
    • Ease in the Claim of Refund: In case more tax has been deducted than necessary, the submission of TDS returns makes the refund process easier while filing an income tax return.
    • Compliance with tax regulations : Filing for TDS ensures complete compliance with tax regulations and makes financial transactions transparent.
    • Sharing in Revenue collection: Timely filing for TDS returns guarantees that the government receives its proper share of taxes on time, thus contributing to revenue collection and nation-building exercises.

     

    TDS Return Due Date

    The due date for filing the TDS Return falls quarterly, necessitating that every individual or entity deducted TDS adhere to these timelines. These returns are essential for reporting details such as the Tax Deduction Account Number (TAN), the amount of tax deducted, the nature of the payment, and the Permanent Account Number (PAN) of the individual from whose payment the tax was deducted. Depending on the nature of the income on which TDS has been deducted, different forms are prescribed for the submission of TDS returns.

     

    TDS Return Filing Deadlines

    The TDS return due date is crucial for ensuring compliance with tax obligations. For each financial quarter, the due dates are as follows:

    QuarterPeriodTDS Return Due Date
    Quarter 1April to June31st July
    Quarter 2July to September31st October
    Quarter 3October to December31st January
    Quarter 4January to March31st May

    To fulfil TDS payment obligations effectively, it’s important to adhere to these deadlines and ensure the timely filing of TDS returns.

     

    TDS Return Forms

    TDS forms depend on the income of the deductee or the type of deductee paying taxes. The TDS forms are mentioned below:

    FormPeriodicityParticulars
    Form 24QQuarterlyThe quarterly statement for TDS from “Salaries”
    Form 26QQuarterlyQuarterly statement of TDS in respect of all payments other than “Salaries”
    Form 27QQuarterlyQuarterly statement of TDS from interest, dividend, or any other sum payments to non-residents
    Form 27EQQuarterlyQuarterly statement of collection of tax at source

    TDS Form 24Q

    Under the provisions of Section 192 of the Income Tax Act 1961, an employer deducts the TDS while making the salary payment to an employee. An employer has to file the Salary TDS returns in Form 24Q, which has to be filed every quarter. Details about the salary paid to employees and the TDS deducted on such salaries are required to be disclosed in Form 24Q. Hence, Form 24 Q shall be considered as quarterly statement of payment to the employee and TDS deducted made by the deductor.

    TDS Form 26Q

    TDS the payee is deducting when a taxpayer is paying the taxes on certain occasions. Form 26Q is used for filing TDS details on other than salary payments. The Form will mention the overall amount paid within a particular quarter along with the TDS amount deducted. Form 26 Q has to be filed every quarter.

    Form 27Q

    Form 27 Q is a TDS return or a statement that contains the details of the Tax Deducted at Source on payments other than salary made to a Nonresident India and foreigners. Form 27 Q is to be furnished every quarter or before the due date. Form 27 Q includes all the details of payments that are made and the TDS deducted on payments is made to the NRI by the deductor.

    Form 27EQ

    Form 27 EQ carries all details of the source tax collected. 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.

     

    Essential Details for Online TDS Return Submission

    For the seamless filing of TDS returns online, it’s essential to have the following details ready:

    • TAN Information: The TAN will be needed for the submission of the TDS returns since it assigns the deductor. PAN Information: Details of the PAN of both the deductor and the deductees must be submitted so that the tax payments and deductions are appropriately appropriated.
      • Previous TDS Filing Records: This is in case you intend to file the TDS return as an amended return for a TDS return already filed. You could need the details of filing of previous years to ascertain the facts.
        • TDS Filing Quarter and Financial Year: If you are filing the return in continuation with the tax periods, you must find out the quarter and financial year for which you are filing the TDS return.
        • Incorporation Date: The date the business or entity was incorporated might be required especially when new filers or filing for the first time in that fiscal year.
       • Transaction Count: The total number of transactions involving TDS deduction in the period will have to be declared as it helps categorize and process the return correctly.
       • Entity Type: This is pretty essential to declare explicitly, because the type of entity would determine the tax norms and reporting standards applicable, which are totally different for a Proprietorship, Partnership, Company, and LLP (Limited Liability Partnership).

     

    Penalty for Failure in Filing the TDS returns

    In case the assessee fails to file TDS returns before the due date then it draws a penalty of Rs.200 under Section 234 E by the assessee until the time the default is continuing.

     

    Non-Filing the TDS returns

    If the assessee has not submitted the return within a year from the date of filing, then the returns or if the person has furnished wrong information, then he or she will also be liable for a penalty. The penalty levied is not less than 10,000 and more than Rs. 1,00,000.

     

    How to file TDS Return?

    Learn the step-by-step process of how to file TDS returns with ease through IndiaFilings’ expert guidance.

    Collect All Required Documents: One needs to collect all the relevant documents, such as the TAN (Tax Deduction and Collection Account Number), PAN (Permanent Account Number) of the deduct or and the dedicatees, and details of the challan regarding the payment of TDS, and details of earlier returns filed, if any.
    Select appropriate TDS Form: Depending upon whether receipt is through salary, interest or rent, select appropriate type of TDS return form. In example, where salaries are concerned, use Form 24Q, in cases of non-salary payments use Form 26Q, etc.
    Download TDS Return Preparation Utility (RPU): Income Tax Department provides free software utility called RPU for preparation of TDS return. Download latest version from the website of the original TRACES www.traces.gov.in.
    Preparation of TDS Return: Using the RPU, input all required data, including deductor, deductee, and challan details. The software will validate your data and help rectify any errors before final submission.
    Validate the Return: After filling in all the details, validate the TDS return file using the File Validation Utility offered by the Income Tax Department. FVU Validates for Error FVU verifies if the file is as per the department requirement.
    Generate the FVU File: Once the validation process is done successfully, the FVU will generate a file in the format of. fvu. That’s the final version of the TDS return ready to submit.
    Submit TDS Return: Login to the Income Tax Department’s e-filing portal using your TAN, navigate to the TDS tab, and upload the .fvu file. If your category of deduct or requires a digital signature certificate (DSC), you have to attach it with your return.
    Acknowledgement: Upon successful submission, the IT department will issue an acknowledgment, which you should ensure to preserve for future reference.
    Revised TDS Returns

    Once the TDS return is submitted and errors are noticed like incorrect challan details or the PAN is not provided or incorrect PAN is provided then the tax amount credit with the government will not reflect in Form 16A / Form 26 AS. In order to ensure that the amount is correctly credit and reflected in Form 16/ Form 16A / Form 26 AS, a revised TDS return has to be filed.

    Prerequisites for submission of Revised TDS returns

    The modified TDS returns could be furnished after the original TDS return is received by the TIN central system. The assessed might verify the status of the TIN Central System. He might check the status of the filed TDS returns online also, providing essential details like fhe PAN and the Provisional Receipt Number/ Token number on NSDL.

    New TDS returns must be prepared on the latest consolidated TDS statement. The certificate may also be downloaded from the TRACES website.

    Claiming TDS return

    TDS Credit The deductor can claim the credit of the TDS by mentioning the details of the TDS in his returns of income. The deductee is expected to take due care to quote the correct TDS certificate number and TDS details while filing the returns of income.

    In case incorrect information is furnished by the deductee, then the tax credit of processing the TDS returns will be mismatched with such information.

     

    Why Choose India Filings for Your TDS Return Filing?

    With India Filings, you receive professional help while going about your TDS return filing. We have experience with tax complexity and understand how to disentangle the issues by staying updated with the latest tax laws. This saves you from undue hassle on account of penalties and lawsuits. We work to make TDS calculations and form submissions hassle-free for you while doing away with documentation hassles. We help both the individuals and businesses put in their return with minimum hassle.

     

    TDS Return FAQ’s

    What is TDS return filing?

    Tax deducted at source is the practice of reducing the tax evasion and the spillage by TDS payment mandatory at pre refined rates.

    What is the concept of TDS?

    TDS was introduced so that the tax could be collected from the source of income. Here, the deductor who is liable to make payment to the deductee should deduct the tax at source and remit the same into the account of the central government.
    On what amount is TDS deducted?

    TDS will be deducted only if total income is taxable. In case total income is Rs 2,50,000, then no TDS will be collected and this will be applicable for both men and women who are below 60 years of age.

    What happens if the TDS is not deducted on time?

    It attracts a penalty for failure to deposit or to deduce TDS in time; the employer can pay interest on such delayed payment of TDS before filing of returns of TDS or the demand raised by TRACES.
    How is TDS deducted on Salary?

    First calculate the exemptions available under Section 10 of the Income Tax (ITA) then subtract the exemptions that are determined in step (2) from the gross monthly income determined in step (1), multiply the number obtained above by 12 because the TDS is calculated on the yearly income.
    Duration required for TDS refund?

    It takes 30-45 days from the date of the E-verification of the income tax return to get the refund credited.

    Who is eligible for TDS refund?

    Returns of TDS are to be made by the employers or organizations holding a valid TAN-Tax Collection and Deduction Number. A person is mandatorily required to deduct tax at source from a list of payments specified under the Income-tax Act and deposit it in the bank within a given stipulated time.
    What is the penalty for delay in TDS payment?

    In case an individual fails to submit the statement of TDS within the due date, there is a minimum penalty of Rs.10,000 which can be extended up to the limit of Rs.1,00,000.
    How long does it take to reflect the TDS in 26AS?

    It takes 30-45 days to reflect the TDS deposit in Form 26AS, depending on the efficiency of the company’s accounts department.

    Is it necessary to tax after TDS?

    Most of the TDS payment rates are determined in the income tax act and TDS is deducted by the payer as per the specified rates. However, in case you have provided the proofs of investment to the employee and the total taxable income is below the tax limit then he does not need to pay any tax.