Income Tax Return is a form in which specific people file information about their income and tax paid before-handedly thereon to Income Tax Department. The Income Tax Act, 1961 and the Income Tax Rules, 1962 obligates citizens to file returns with the Income Tax Department at the end of every financial year, these returns must be filed before the said due date. Every Income Tax Return Form is applicable to a certain section of the people, only those Forms which are filed by the eligible person are processed by the Income Tax Department of India. It is therefore imperative to know which particular form is appropriate in each case, Income Tax Return Forms vary depending on the criteria of the source of income of the citizen and the category of the assessee. One such type of return is called as Tax Deducted at Source (TDS).
What is TDS & TDS Return?
Tax Deducted at Source (TDS) is a source of collecting tax by the Government of India (GOI) at the time when a particular transaction takes place. Here, the tax is said to be deducted at the time when money is credited to the payee’s account or at the time of particular payment, whichever is earlier. It is the amount deducted from payments such as salary, contract payment, commission, etc. This said deducted amount must be adjusted against the tax due to that deductee.
A TDS Return is a quarterly statement which must be submitted to the Income Tax Department of India. Submitting TDS Return is mandatory for one who is a deductor. It has details of TDS deducted and deposited by them.
Who is required to file TDS Return?
It is the duty of the person who is making payment to someone for specified goods or services to deduct TDS and file a TDS return. The person who deducts TDS is called deductor and the person whose tax is being deducted is called a deductee.
But no TDS has to deducted if the person making the payment is an individual or Hindu Undivided Family (HUF) whose books are not required to be audited.
Key Terms of a TDS Return
- TDS return must be submitted quarterly and various details need to be furnished such as:
- Tax Deduction and Collection Number (TAN);
- Amount of TDS deducted;
- Type of payment;
- PAN of deductee, etc.
- The various forms required in the TDS Return filing process are:
- Form 24Q: TDS statement for salaries
- Form 26Q: TDS on all payments except salaries
- Form 27Q: Tax collected from dividend/interest paid to non-resident Indians (NRIs)
- Form 27EQ: Collection of taxes at source
- In addition to filing quarterly return statements, the specified person must also provide Form 27A. This particular form deals with the whole summary of the returns filed which contains tabulations for the amount paid during various transactions and breakup of the IT deducted.
- Online filing of the quarterly results are must under the following circumstances:
- Deductors/Collectors are from government offices
- Deductors/Collectors are from private companies or corporates
- If the Deductor/Collector is a person, whose accounts must be audited u/s 44AB in the last financial year.
- If the number of deductees recorded in a statement during a specific quarter is 20 or more than that.
Note: This above is mandatory as per Section 206 of the Income Tax Act. All other types of assesses may either choose to file their TDS Return online or over the counter i.e. at the designated offices and centres.
How to File TDS Returns Quarterly?
One needs to submit the TDS Return and related paperwork at any of the designated TIN-Facilitation Centre’s managed by the National Securities Depository Limited (NSDL), details of which are available on their website. Upon submission of the forms, their representative will issue a provisional receipt as an acknowledgment for the TDS returns filed. In case of rejection due to certain reason, a memo would be provided with the reason for the non-acceptance.
Due Dates for Filing TDS Returns in India:
|April to June (Q1)||July 15|
|July to September (Q2)||October 15|
|October to December (Q3)||January 15|
|January to March (Q4)||May 15|
Due date for filing Form 24Q for FY 2018-19 (Q4) has been extended to 30th June 2019.
Penalty for Non-filing/Delay in filing TDS Return
There are certain monetary penalties if the deductor/collector does not file the return as per the due dates in each quarter which are as follows:
- If the deductor fails to file the TDS return within a year from the time it falls due or provides any incorrect information due to which the same gets rejected, the penalty can range between Rs.10, 000 to Rs.1, 00,000.
- If the return is not filed as per the specified due date, a penalty at a daily rate of Rs.200 is payable, until the time valid returns are received by the department. The total penalty, however, must not exceed the tax amount deducted.
Sometimes navigating and uploading a TDS return on the Income-Tax portal can be difficult for some of the taxpayers, complying with the data procedure too has been found tedious by many. Therefore, to ease the process LetsComply’s legal experts can help you in preparing and filing TDS return. To know more, call us at +91-9717070500 or send an email at firstname.lastname@example.org.