TDS Return Filing

Income Tax is required to be deducted at source at the time of payment to various persons depending on the status of the payer and the nature of the payment. Where TDS is applicable, tax must be deducted as and when a transaction/ payment takes place and such deducted amount must be deposited to the credit of the Government every month.

TDS is to be deducted either at the time of payment or when the transaction is recorded in the books of accounts, whichever occurs first.

Details of TDS deducted in each quarter must be furnished on a quarterly basis.

 

Tax Deduction Account Number (TAN)


TAN is a 10-digit alphanumeric code issued to deductors for the purpose of TDS/ TCS. TAN is to be obtained by all persons who are required to deduct tax (except tax under section 194IA and 194IB). TDS return filing is filed on the basis of TAN.

Due dates of payment of tax and filing returns

Tax deducted throughout the month must be deposited within 7th of the next month. However, TDS deducted in month of March can be deposited till 30th April. Failure to deposit tax within the due date attracts interest at 1.5% per month.


The due dates for filing the quarterly TDS statements is as follows: -

Quarter ending on Due Date
30th June of the FY 31st July of the FY
30th September of the FY 31st October of the FY
31st December of the FY 31st January of the FY
31st March of the FY 31st May of the FY

Failure to TDS Return Filing within the due date attracts late fees of Rs. 200 per day. But the total late fees amount cannot exceed the amount of TDS.

Rates of TDS

Some of the most common TDS rates are as follows: -

S.NO Nature of Payment Section Rate (%)
1 Salary 192 Slab Rate
2 Interest on Securities paid to residents 193 10%
3 Interest other than interest on securities 194A 10%
4 Winnings from Lottery/ Crossword Puzzle paid to resident as well as non-resident 194B 30%
5 Winning from horse race paid to resident as well as non-resident 194BB 30%
6 Contract charges paid to residents where the payee is an individual/ HUF 194C 1%
7 Contract charges paid to residents where the payee is NOT an individual/ HUF (e.g. Payee is Company/ Firm etc.) 194C 2%
8 Insurance commission paid to residents 194D 5%
9 Amount payable under Life Insurance Policy paid to a resident 194DA 10%
10 Commission on sale of lottery tickets paid to resident as well as non-resident 194G 5%
11 Commission or brokerage paid to residents 194H 5%
12 Rent on plant and machinery/ equipment paid to resident 194I 2%
13 Rent on land/ building/ furniture/ fittings paid to resident 194I 10%
14 Fees for Professional or Technical services paid to residents 194J 10%
15 Consideration paid by purchaser of immovable property where the payee is resident and the consideration exceeds Rs. 50 lakhs 194IA 1%
16 Payment of rent exceeding Rs. 50,000 per month by individuals/ HUFs who are not liable to tax audit where payment is made to resident 194IB 5%
17 Contract charges/ Commission/ Professional fees paid by individuals/ HUF (other than those covered under section 194C/ 194H/ 194J) where total payment in a financial year exceeds Rs. 50 lakhs 194M 5%
18 Cash withdrawal in excess of Rs. 1 crore from a bank/ co-operative society or post office (TDS to be deducted only on the amount exceeding Rs. 1 crore) 194N 2%

Further, where the rate of TDS is less than 20% and the payee does not provide Permanent Account Number (PAN), TDS shall be deducted at the rate of 20%.

In case of payment to non-resident, cess of 4% and surcharge as per applicable rates shall be added.

Interest on default

Interest is charged when there is default in deduction of TDS or deposit of TDS as follows: -

Situation Interest
Where TDS has not been deducted 1% per month or part of the month until the default continues
Where TDS has been deducted but not deposited 1.5% per month or part of the month until the default continues

While calculating interest, it should be noted that part of the month is considered as full month. Further the month which the TDS relates to shall also be counted.

TDS Certificate

TDS certificate is issued by the person deducting tax to the payee. After successful filing of the quarterly TDS returns, TDS certificate is generated. The certificates can be downloaded from TRACES portal here.


The various kinds of TDS certificates are: -

Certificate Purpose
Form 16 TDS on Salary
Form 16A TDS on payments other than salary
Form 16B TDS @ 1% on payment of consideration for immovable property under section 194IA
Form 16C TDS @ 5% on payment of rent exceeding Rs. 50,000 per month by individual/ HUF not liable to tax audit.

Rectification of Return

Errors occurring in the TDS Return Filing can be rectified by filing a correction statement. Errors can occur due to incorrect PAN, incorrect TDS deduction or incorrect challan details provided in the return. Correction statement can be filed by the deductor by logging into the TRACES portal.

Any person who is required to deduct tax at source is required to file quarterly statement of TDS disclosing the details of tax deducted and deposited during the quarter.

Any person who is required to make specific payments such as contract charges, professional fees, commission, interest (other than interest on bank loan) are required to deduct TDS on such payments. An individual is usually required to deduct TDS only if he is liable to tax audit in the preceding financial year.

TDS is deposited vide Challan ITNS 281. This may be done online or by visiting your bank.

The counter-foil of the Income-tax Challan filled by taxpayers, should be stamped and returned by the bank. Please ensure that the bank stamp contains BSR (Bankers Serial number code), Challan Identification Number (CIN) and the date of payment.

An individual or HUF is usually required to deduct tax only if he is liable to tax audit in the preceding financial year. However, where an individual/ HUF makes payment of rent in excess of Rs. 50,000 per month, TDS must be deducted even if he is not liable to tax audit in the preceding financial year. Further, an individual/ HUF making payment of consideration for purchase of an immovable property is also required to deduct TDS if the aggregate consideration exceeds Rs. 50 lakhs.

If TDS return is not filed within the due date, late fees will be levied at the rate of Rs. 200 per day for each day until the default continues. However, the total late fees shall not exceed the amount of TDS.

Non-compliance of TDS provisions is punishable under Section 271C of the Income-tax Act 1961 where minimum penalty is Rs 10,000 but can go up to Rs 100,000. If a case where wilful default is established, the defaulter can be punished with imprisonment of not less than 3 months but may extend to 7 years and with fine.

If you are not required to deduct tax in any quarter, then you are not required to file TDS Return for that quarter even if you hold a valid TAN. A declaration statement should be filed online declaring the reason for no deduction of any TDS.

Error in original TDS return can be rectified by filing a correction statement. This can be filed online in the TRACES portal. There are different types of corrections depending on the type of error. We at Filecrat can help you with filing TDS revised return.

The due date for filing TDS returns is as follows: -

Quarter ending on Due Date
30th June of the FY 31st July of the FY
30th September of the FY 31st October of the FY
31st December of the FY 31st January of the FY
31st March of the FY 31st May of the FY

What’s Included

  • Monthly Assistance in TDS Calculation and Payment
  • Price for up to 7 Transactions per month
  • Quarterly filing of TDS returns
  • Form 16, Form 16A for your payees

Documents Required

 

  • Tax Deduction Account Number (TAN)
  • Party wise details of Tax deducted with name, PAN, nature of payment, date and amount
  • Tax Payment Challan in Form ITNS-281
  • DSC of Authorized Signatory

TDS Return Filing


TDS Return Filing is required to be filed quarterly in Form 24Q, 26Q, 27Q, 27EQ. File your TDS return online through filecrat with TDS Expert Assistance just Rs.999.

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