TDS Return Filing

What are the benefits of TDS return filing

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Avoid penalties

If you are required to file a TDS return and you don't, you may be subject to late filing penalties. The penalty for not filing a TDS return is a fine of Rs. 200 per day, up to a maximum of Rs. 10,000. In addition, you may also be charged interest on the unpaid tax at the rate of 1% per month or part thereof from the date on which the tax was originally due until the date of payment.

Get a refund

If you have paid more tax than you actually owe, you can claim a refund by filing a TDS return. To get a refund, you will need to file your return within one year from the end of the financial year in which the tax was deducted. For example, if the tax was deducted in March 2020, you will need to file your return by March 2021.

Improve your credit score

Filing your TDS return on time can help improve your credit score as it is one of the factors that lenders take into account when considering your loan application. A good credit score indicates that you are a responsible borrower and increases your chances of getting approved for a loan with favorable terms and conditions such as a lower interest rate.

 

What is TDS in India?

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TDS stands for Tax Deducted at Source and is a system introduced by the Indian government to collect taxes. Under this system, a certain percentage of money is deducted from the total amount payable to the taxpayer by the deductor. The deductor can be an individual, a company, or any other organization. The TDS amount is then deposited with the government.
The purpose of TDS is to ensure that taxpayers pay their taxes on time. It also helps in reducing tax evasion and avoidance. TDS is deducted on various types of payments such as interest income, salary, professional fees, rent, etc. The rate of deduction depends on the type of payment and the Income Tax Slab of the taxpayer.
TDS must be deducted by the deductor if the total amount payable to the taxpayer exceeds Rs 2,500 in a financial year. The deductor is responsible for paying TDS to the government within specified due dates. If TDS is not paid on time, late payment interest and penalties will be levied by the government.

What is TDS

TDS stands for Tax Deducted at Source. It is a system introduced by the Income Tax Department wherein taxes are deducted from certain specified payments before they are paid to the recipients.

What is the purpose of TDS

The purpose of TDS is to collect taxes from individuals who may not be paying their taxes regularly. This ensures that the government receives its share of taxes on time, and also reduces the burden on the taxpayers.

Who is responsible for paying TDS

The responsibility of paying TDS lies with the payer (deductor) of income. The deductor is required to deduct tax at source and deposit it with the government within a specified timeframe.

What are the different types of TDS

There are four different types of TDS in India:

1. Tax deducted at source from salary;
2. Tax deducted at source from interest payments;
3. Tax deducted at source from commission or professional fees; and
4. Tax deducted at source from rent payments.

When is TDS deducted

TDS is generally deducted when payment for goods or services is made to a resident supplier/contractor/professional etc. However, there are certain threshold limits prescribed for each type of payment, beyond which TDS will not be applicable.

TDS Process in India

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The TDS process in India

In India, the process of deduction and collection of tax at source is called Tax Deduction at Source (TDS). The person responsible for making payment of specified nature to any other person shall deduct TDS on such payments and remit the same into the account of the Central Government.
The amount deductible as TDS shall be equal to the amount of tax payable on the total income earned by the payee from the said payment. The payer is required to furnish details of deduction made along with Challan-281 to the Income Tax Authorities. A statement in Form No 26AS showing all TDS deductions made in respect of a PAN holder is available online for viewing/downloading by taxpayers from TRACES.

The TDS Return

The deductor is required to file quarterly statements of tax deducted at source (TDS return) in Form No 26Q on or before due dates specified under section 139(1) read with rule 31A of Income-tax Rules, 1962. These returns can be filed electronically through the portal www.tdscpc.govt.in using digital signature or electronic verification code (EVC). Return in physical form can also be filed at selected branches of authorized banks which have been enabled for this purpose by NSDL Database Management Limited (NDML). Similarly, corrected statements can also be filed electronically or physically as above within specified due dates only after obtaining acknowledgement for original statement filed earlier.

TDS Payment

Tax deducted at source has to be deposited into central government account through any authorized bank branch using challan no./TR6 challan available on www.tin-nsdl.com . After depositing into central government account, a unique transaction number will be generated called “challan identification number” (CIN). This CIN is then required to be quoted by deductor while filing quarterly return i e., Form No 26Q & annual return i e., Form No 24Q/27EQ respectively. “Payer" means a person responsible for paying any sum to "Payee". In case where there is more than one payer, each such payer shall separately deduct tax at source and comply with all provisions relating thereto including furnishing information relating thereto as may prescribed;]

TDS Certificate

TDC certificate in Form 16/16A is issued by deductor to deductee specifying therein details such as name &address of deductor, Permanent Account Number (PAN)of deductor, assessment year, financial year, amount paid/credited and amount deducted as tax.

The purpose of TDS is to deduct tax from the income of individuals and companies and deposit it with the government. TDS is deducted by employers from employee salaries, and by businesses from payments made to contractors. TDS certificates are issued to employees and contractors, which can be used to claim a refund of tax deducted at source.