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Overview of TDS Return Filing in India
Tax Deducted at Source (TDS) is a system where tax is collected when money changes hands. Instead of waiting for the end of the year, the government gets its share in advance. So, if you are getting a salary, bank interest, rent, or even professional fees, the person making the payment will cut a small portion as tax and give you the balance. This person is called the deductor, and it’s their duty to calculate the right amount, deposit it with the Income Tax Department, and also file quarterly returns showing these details. They must also hand over a TDS certificate, such as Form 16 or 16A, so that the person receiving the money—the deductee — can claim the tax that has already been paid on their behalf. The deducted amount later appears in the Form 26AS of the payee and can be adjusted when filing the income tax return. Since there are strict timelines, filing late or incorrectly can bring penalties and even legal issues for the deductor.
What is a TDS?
TDS, or Tax Deducted at Source, is a system where tax is deducted before you receive your money. For example, when you get your salary, bank interest, rent, or fees, the person paying you will keep aside a small portion as tax and give you the balance. The deducted amount is sent directly to the Income Tax Department in your name, and you can view it in your Form 26AS and adjust it when filing your return.
Under the Income Tax Act, 1961, India, TDS is deducted on various types of payments, such as:
- Salaries
- Interest on loans or fixed deposits
- Rent payments
- Professional fees
- Commission and Brokerage
The deductor is responsible for deducting a certain percentage of the payment as tax before making the actual payment to the recipient/deductee. The deducted amount is then paid to the Income Tax Department.
The TDS return must include the following:
- The total amount of TDS deducted during a particular quarter.
- Details of the deductor – their PAN and TAN
- Details of the deductee – their PAN
- The amount of tax deposited with the government.
The TDS return has to be filed periodically, usually every quarter, by the deductee.
Benefits of TDS Return Filing
Filing TDS Return on time has the following benefits:
- Legal requirement under the Income Tax Act,1961: Under the Income Tax Act, 1961, filing TDS returns on time is a mandatory requirement. Any delay in filing the return can result in heavy penalties, and in the worst case, it can lead to imprisonment.
- Helps to track tax payments and prevent tax evasion: TDS returns provide a transparent record of tax deducted at source, which later helps the government to track taxpayers and identify potential tax evaders. By TDS, the government ensures that taxes are paid correctly and on time.
- Enables Deductee to claim refunds: If the amount of TDS deducted by the deductor exceeds the deductee's actual tax liability, by filing the TDS return, the deductee/payee can claim the excess tax paid as a refund.
- Reduces taxpayer burden: Since TDS is deducted automatically from the source, it helps ease the burden on taxpayers as they file the quarterly returns.
Requirements for TDS Return Filing Online
TDS Return Filing is a requirement under the Income Tax Act 1961. The following are the prerequisite conditions that must be met before filing TDS returns:
- A valid PAN number for both the deductor and deductee.
- Valid TAN of the deductor
- Digital Signature Certificate (DSC) of the director of the company
- Digital Signature Certificate (DSC) of a partner of a partnership firm or LLP
- TDS Payment Challan forms - Form 26QB, 26QC, etc.
- TDS Deduction Details: Information regarding the amount deducted, the nature of payment, and the recipient’s details.
- Select the appropriate form based on the type of payment (e.g., Form 24Q, 26Q, 27Q, etc.).
- Valid Bank Account Details are required for payment of TDS and for refund (if applicable).
- Quarterly TDS Statement: Complete details of TDS returns for the respective quarter.
Eligibility Criteria for TDS Return Filing Online
TDS return filing is needed for all taxpayers who have received TDS. The eligibility reasons for making TDS forms are as follows:
- Anyone Who Deduces TDS: If you are the person or organisation who is deducting tax at the source (like an employer, business, or bank), you must file a TDS return online. This includes people who pay salaries, interest, rent, professional fees, or other payments where TDS is deducted.
- TAN (Tax Deduction Account Number): To file TDS returns online, you must have a valid TAN. This is a unique number given to businesses or individuals who are deducting TDS. Without it, you cannot file the return.
- Quarterly Filing: If you are deducting TDS, you must file the TDS return every quarter and submit it four times a year.
- Government and Corporations: Government bodies, large companies, and other entities that deduct TDS for their employees or contractors are also required to file TDS returns online.
Documents Required for TDS Return Filing Online
Necessary documents for TDS Return filing are:
- PAN of the Deductor and Deductee.
- TAN of the deductor.
- Proof of TDS Payment, such as receipts or challans in the forms 26QB, 26QC, etc., for various types showing the TDS paid to the government.
- Bank Account Details of both the deductor and deductee.
- Amount deducted, the type of payment from salary, rent, etc., and the details of the person receiving the payment.
- Form 16/16A: Form 16 is for salaried employees, and Form 16A is for others, like contractors or freelancers.
- Previous TDS Returns (if applicable): If any TDS returns were filed in the past or if you are correcting your previous return, keep the returns ready for reference.
- A Digital Signature Certificate (DSC) of the directors/partners of the company or firm.
- Quarterly TDS Return Forms like Form 24Q, Form 26Q, and Form 27Q.
- Other Relevant Documents: As required by the Income Tax Department.
TDS Forms
- Form 24Q- This is a quarterly statement for TDS from ‘Salaries.’
- Form 26Q—This is a quarterly statement for TDS regarding all payments other than ‘Salaries.’
- Form 27Q- This is a quarterly statement for TDS from interest, dividends, or any other sum payable to non-residents.
- Form 27EQ- This is a quarterly statement for the collection of TDS at the source.
Online Procedure for TDS Return Filing in India
Follow the steps below to file your TDS Return online:
- Log in to the e-filing page of the Income Tax Department at the e-filing site by adding your credentials. If you are a new user, you need to sign up and make a new account.
- Select the TDS return submitting option: Once you have logged in, click the TDS return submitting option from the menu. By clicking, you will be moved to the TDS return filing web page.
- Enter the TAN and PAN details: On the TDS report filling page, add your Tax Deduction and Collection Account Number (TAN) and Permanent Account Number (PAN) information.
- Enter the information of the TDS deducted, including the amount, the recipient's PAN, and the date of payment. Make sure all the data is correct and up to date.
- Before finishing the TDS return, make sure that all details are correct and up to date.
- After filing the TDS return, download the acknowledgement – it will be evidence of filing the return. The acknowledgement consists of a unique TDS return submission number, which is essential for future reference.
Checklist for Filing TDS Return
- Verify TAN and PAN details: Confirm that your Tax Deduction and Collection Account Number (TAN) and Permanent Account Number (PAN) are valid and updated. These numbers are critical for TDS back submissions and need to be accurate to avoid errors and fines.
- Do not forget to collect the necessary documents
- Keep an eye on the due date for filing the TDS Return
- File TDS returns on time: Submit TDS returns correctly and on time to avoid fines and keep compliance with tax laws.
TDS Filing Due Dates
The due dates for making TDS returns for FY 2024-25 are
- 1st Quarter: 31st July 2024
- 2nd Quarter: 31st October 2024
- 3rd Quarter: 31st January 2025
- 4th Quarter: 30th April 2025
Penalty for Late Filing or Non-filing of TDS Return
TDS returns have to be filed on time. Non-filing of returns on time can lead to penalties, which are as follows:
- Under Section 234E, a fee of Rs. 200 for every day would be charged for late furnishing of TDS/TCS statements from the due date of furnishing of the statement. However, the total amount of the fee cannot exceed the total amount of tax-deductible/tax collectable, and such a fee has to be paid. The punishment under this section is in addition to the late filing fee u/s 234E. This part will also cover the cases of wrong filing of TDS records.
- Under Section 271H of the Income Tax Act, 1961, the assessing officer may order any person who fails to file a TDS statement or TCS statement within the due date to pay a penalty of Rs. 10,000. This penalty can be extended up to Rs. 1,00,000.
- Under Sectio 276B of the Income Tax Act, 1961, a person will be punished with a rigorous three-month sentence, which can be extended up to seven years, along with a fine for not paying TDS to the credit of the Central Government.
Important Things to Keep in Mind while Filing a TDS Return
- To file TDS returns, people must possess a legal TAN and be registered in e-filing. The return preparation tool can be used to prepare and send TDS records. The TDS return should be approved, and the ZIP file of the TDS statement should be uploaded with the help of a digital signing certificate (DSC). A signing file should also be added and shared.
- If any mistake is found on the TDS report, the tax amount paid to the government will not show in Form 16/Form 16A/Form 26AS. To avoid this mistake, one must fix it by filing a new TDS.
- Employers and groups with valid TANs are qualified to make TDS returns. Individuals whose accounts are reviewed under Section 44AB of the Income Tax Act, 1961, and who hold jobs under the government or companies are responsible for filing online TDS returns every quarter.
- The deductor can be a person, an association of individuals (AoI), an HUF, a public or private limited company, a local body, a joint firm, etc.
Why Choose Kanakkupillai?
Kanakkupillai is the leading service provider for filing TDS returns in India. Our team of experts, with vast knowledge of Tax Laws, works tirelessly to provide users with a hassle-free experience. To save you time and effort, our team helps you prepare the necessary documents for the TDS return. Our services are customised and designed based on the client's needs.
With 24/7 assistance, TDS can be filed in just a few clicks. We ensure that all your doubts and confusion are adequately cleared on time, and our clients remain compliant with the nation's Tax Laws to avoid any fines.
In addition to TDS return filing, Kanakkupillai offers complete income tax return filing services, providing specific information about income sources, reductions, and tax-saving purchases made during the financial year. They also provide online GST return filing services, with individual users needing to file four forms for GST returns.
Frequently Asked Questions
What is TDS return filing?
TDS report filing is the process of giving the details of the tax received at source to the Income Tax Department.Who is allowed to file TDS returns?
All taxes who have taken TDS are qualified to file TDS returns.What are the papers needed for TDS return filing?
TDS permit, bank account, and PAN card are needed for TDS return filing.What is the process of TDS return filing?
The method of TDS return submitting includes getting into to the e-filling website of the Income Tax Department, selecting the TDS return submitting option, enter the TAN and PAN info, enter the details of the TDS taken, checking the information, and sending the TDS return.How often should TDS returns be filed?
TDS reports are an annual process, and they should be made every year.What is the due date for TDS return filing?
The due times for TDS return filing change based on the type of user.What are the fines for not filing TDS returns?
fines for not filing TDS returns can be serious, and it is important to file TDS returns on time to avoid any finesCan TDS returns be made online?
Yes, TDS returns can be made online through the e-filing page of the Income Tax Department.Is it mandatory to make TDS returns?
Yes, it is needed to file TDS records for all users who have received TDS.How can Kanakkupillai help with TDS return filing?
Kanakkupillai can help with TDS return filing by giving an easier way, understanding, 24/7 support, and ensuring compliance with the Income Tax Department.What makes Us Different
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