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How to file TDS Return?

Deepti Shikha

| Updated: Jan 11, 2020 | Category: Taxation

How-to-file-TDS-Return

TDS or Tax Deducted at Source is a process of collection of tax by the Government of India at the time when the transaction takes place. Here the tax is deducted from the creditor’s account at the time of payment. The deducted amount is then deposited to the Income Tax department. Through TDS some portion of the tax is automatically transferred to the income tax department. TDS is also considered as a method of tax-reducing evasion. However, TDS is not deducted while making payments to lawyers, doctors and paying of rents. The person who makes the payment is called a deductor and the person receiving the payment is known as deductee.

What is TDS Return?

The deductor apart from depositing the tax should file TDS return. A TDS Return is to be submitted quarterly to the Government. Different TDS deductions have various return forms. The deductors need to file TDS return on time.

TDS is deducted for the following types of payments:

TDS Deducted Types

The details required to register TDS Returns are:

details required to register TDS Returns

Eligibility criteria for filing TDS return

Organizations and employers with a valid Tax Deduction and Collection Account Number (TAN) can file TDS Returns.

For the below-mentioned payments TDS is to be presented:

  • Payment of Salary
  • Income by way of ‘Income on securities’
  • Income by way of winning puzzles, Lottery and similar types of games
  • Insurance Commission
  • Income that has been generated by winning horses
  • Payments that have been made towards National Savings Scheme and any other similar schemes

How to file TDS Returns?

The process to file TDS return is mentioned below:

  • The multiple columns of Form 27A must be filled properly.
  • In case the hard copy of the form is filled, it is to be verified along with the e-TDS return that has been electronically filed.
  • The total amount paid and the tax deducted source must be accurately filled and cross-checked with the respective forms.
  • The Tax Deduction and Collection Amount Number (TAN) must be mentioned in Form 27A.
  • The correct challan number, mode of payment and the tax details must be mentioned on the TDS returns. There will be a mismatch if incorrect details are mentioned in the challan.
  • The seven-digit Basic Statistical Returns or BSR must be mentioned so that tallying becomes easy. The basic form is to be used for filing the TDS Returns.
  • Physical TDS Returns must be submitted at the Tax Information Network or TIN-FC. NSDL manages TIN-FCs.
  • In case the returns are filed online, they must be submitted on the official website of the NSDL TIN( National Securities Depository Limited).
  • Where TDS is filed online, a level 2 digital Signature must be used by the deductor.
  • After completion of all the steps, a token number or provisional receipt will be received as an acknowledgment that the TDS Returns have been filed.
  • Where TDS Returns are rejected, a non-acceptance memo along with the reasons for rejection is issued. TDS Returns must be filed again in case of rejections.

The details of the various sections involved in the filing process are mentioned below:

Various sections involved in the filing

Penalty for delay in filing TDS Returns

Penalty TDS Returns

The TDS is to be deposited with the Government within 30 days from the end of the month when the deduction is made. Failure to do so will attract penalties and interest. Not filing TDS Returns as per due dates attract monetary penalties.

  • Penalty under Section 271H: If the deductor fails to file the TDS Return within a year from its due date or gets rejected because of incorrect information, the penalty imposed can range between Rs. 10,000 to Rs. 1 lakh on case to case basis.
  • Penalty under Section 234E: A penalty of Rs. 200 is deducted daily if the return is not filed as per the due date until the department receives valid returns. The total payment shall not exceed the tax amount deducted

There is an exception under Section 271 H of the Income Tax Act where the penalty is not charged even when returns are not filed in the due date, provided following conditions are applicable:

  • The TDS is paid to the Government’s credit
  • The filing of TDS Return id done prior to the expiry of 1 year from the due date.
  • The late filing fees and interest is paid to the Government’s credit.

Interest Rate for TDS Payment

Section 201(1A) of the Income Tax Act,1961 provides interest rates for the following two situations if tax is not deducted at source:

Issue Interest Rates Period of Interest
Delay in deduction of TDS 1% per month From the due date of deduction
Delay in payment of TDS 1.5% per month From the month in which TDS was deducted to the date of payment of Tax

How and when to file TDS Returns?

TDS needs to be submitted quarterly. Various due dates are mentioned in the box below:

TDS on salary –Form  24Q Quarter 1-31st July Quarter 2-31st October Quarter 3- 31st January Quarter 4- 31st May  
TDS on all forms except salaries-Form 26 Q Quarter 1-31st July Quarter 2-31st October Quarter 3- 31st January Quarter 4- 31st May  
TDS on all payments made to non-residents except salaries-Form 27Q Quarter 1-31st July Quarter 2-31st October Quarter 3- 31st January Quarter 4- 31st May  
TDS on sale of property-Form 26 QB 30 days from the end of the month in which TDS is deducted
TDS on rent 30 days from the end of the month in which TDS is deducted

Enterslice helps in Filing TDS Returns

Our experts help in the quick filing of TDS Returns before the due date. Follow the due date from preventing you from paying penalties.

Conclusion

TDS is deducted on the gross amount, which is paid by the payee to the receiver. The filing of TDS returns is mandatory as per the general provisions of the Income Tax Act, 1961. The returns should be filed quarterly. The penalty is imposed for late payment of TDS Returns. It is advised to use a professional’s help to prevent oneself from getting in all types of hassles. The experienced professional checks on all the prerequisite documents and completes the process accordingly.

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Deepti Shikha

Deepti is a Law graduate with an avid interest in reading and very proficient in summarizing legal cases. She has enough experience in handling legal affairs of the company. In the initial days of her career, she has worked as a legal researcher and has 3+ years of experience.

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