Description
What is TDS?
Tax deducted at source or TDS is the tax collected by the government of India at the time when a transaction takes place. In this case, the tax is required to be deducted at the time money is credited to the payee’s account or at the time of payment whichever happens earlier.
In the case of salary payment or the life insurance policy, tax is deducted at the time the payment is done. The deductor then deposits this amount with the Income-tax department. Through TDS a portion of the tax is paid directly to the IT department.
Tax is deducted as per the applicable norms under the income tax act.
What is TAN?
TAN or Tax Deduction and Collection Number is a mandatory 10 dight alpha number that is to be obtained by all people who are responsible for Tax Deduction at Source or Tax Collection at Source on behalf of the Government.
The person who deducted the tax at the source is required to deposit the amount to the Central Government quoting his TAN number. Salaried individuals are not required to obtain TAN or to deduct the tax at the source.
In the case of proprietorship businesses and other entities must deduct tax at the source while making certain payments like the salary, payments to the contractor, payment of rent exceeding Rs.1,80,000 per year. Taxology can help you obtain the TAN registrations.
The entities that have TAN registration must file the TDS returns quarterly. Taxology can help you file the TDS returns online. Our TDS experts can help in computing the TDS payments and file the TDS returns and comply with the TDS regulation.
Eligibility criteria for filing TDS Return
- Salary payment
- Income on Securities
- Income by winning lotteries, puzzles, and others
- Income from winning horse races
- Insurance commission
- Payment concerning National Saving Scheme and many others.
Due Date for TDS Filing
The due date for Payment of TDS deducted is the seventh of the next month.
| Quarter | Period | The due date for Filing Form 27Q |
|---|---|---|
| Q1 | 1st April – 30th June | On or before 31st July |
| Q2 | 1st July – 30th September | On or before 31st October |
| Q3 | 1st October – 31st December | On or before 31st January |
| Q4 | 1st January – 31st March | On or before 31st May |
How to File TDS return online?
Here is the step by step process to file the TDS returns:
- At first, Form 27A which contains multiple columns must be filled, in case of hard copy of the form is filled it should be verified along with the e-TDS return that has been filed electronically.
- The next part is that the tax deducted at the source and the total amount that has been paid must be correctly filled and should be tallied.
- The TAN of the organizations must be mentioned on Form 27A. There will be difficulties in the verification process if the TAN mentioned is incorrect.
- While filing the TDS returns the appropriate challan number, the mode of payment and the tax details must be mentioned. In case of an incorrect challan number or incorrect date of payments, there will be a mismatch and the TDS returns might have to be filed again.
- To bring consistency the basic form used for filing e-TDS must be used. The 7-digit BSR must be entered for easing the tallying process.
- Physical TDS returns must be submitted at the TIN-FC. The NSDL manages all the TIN-FCs. In case of online filing, they can be submitted on the official website of the NSDL TIN. A level 2 signature must be used by the deductor in case TDS returns are filed online.
- If the provided information is correct a token number or provisional receipt will be received. This tells us that the TDS return has been filed.
- In case of rejection, a non-acceptance memo along with the reason for rejection is issued and the returns must be filed again.
TDS Certificate
After deducting the TDS the deductor would furnish to the deductee a TDS certificate. The deductee can cross-check the tax credit by viewing a valid TDS certificate in the TDS certificate downloaded from TRACES which bears a 7 digit unique certificate number and a TRACES watermark.The TDS certificates must be preserved by the deductee. TDS certificates on payments other than salaries are issued every quarter and the TDS certificate for the salary is provided on annual basis.In case the deductee loses possession of the certificate he can request a duplicate TDS certificate.
Claiming TDS
TDS credit can be claimed by the deductor, to claim the credit of the TDS the deductee has to mention the details of the TDS in his returns of income.The deductee should take due care to quote the correct TDS certificate number and the TDS details while filing the return of income.In case of incorrect details provided by the deductee, there will be a discrepancy with the tax credit of processing the TDS returns.
TDS Return Form
Different TDS Forms are depending on the income of the deductee or the type of deductee who pays the TDS. The different TDS forms are listed below as follows:
| Form | Period | Particulars |
|---|---|---|
| 24Q | Quarterly | Statement for TDS from “Salaries”. |
| 26Q | Quarterly | Statement of TDS in respect of all payments other than “Salaries”. |
| 27Q | Quarterly | Statement of TDS from interest, dividend, or any other sum payments to non-residents |
| 27EQ | Quarterly | Statement of collection of tax at source |
TDS Return Filing Plans
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General questions
Tax deducted at source is the practice of reducing the tax evasion and the spillage by TDS payment mandatory at pre refined rates.
TDS is deducted only the total income is taxable, the TDS will not be deducted in case the total income is Rs 2,50,000 and this amount is applicable for both men and women below the age of 60 years.
There is a penalty for not depositing or not deducting TDS on time, the employer can make the interest payment on such late payment of the TDS before filing the TDS returns or the demand raised by TRACES.
It takes 30-45 days to reflect the TDS deposit in Form 26AS, depending on the efficiency of the company’s accounts department.
Form 16/16A is the certificate of tax deduction at source and is issued on the tax deduction by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between the deductor and the deductee. It is mandatory to issue the TDS certificates to the Taxpayers.
TDS is the tax deducted on the payment that is made to the company, in case the amount is exceeding certain limits. TCS is the tax that is collected by the sellers while selling something to the buyers. The Deduction of TCS is applicable on sales of goods like timber, scrap, mineral wood, and so on.
Form 27 A is the summary of e-TDS/TCS return (Form 24Q, 26Q, 27Q, and 27EQ) which contain control totals of Amount Paid, Income Tax deducted at source, and tax deposited at the source.
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