What Is TDS?
Tax deduction at source (TDS) in India is a means of collecting tax on income, dividends, or asset sales by requiring the payer (or legal intermediary) to deduct tax due before paying the balance to the payee (and the tax to the revenue authority).
Under the Indian Income Tax Act of 1961, income tax must be deducted at source as per the provisions of the Income Tax Act, 1961. Any payment covered under these provisions shall be paid after deducting a prescribed percentage of income tax.
You can File your TDS Return Online :
Online TDS return is a statement given to the IT department every quarter. It is essential for every deductor to deposit income tax and file for TDS return on time.
On online TDS return, there are 3 easy steps:
TDS Return can be for individuals and businesses
An employer or company that has a valid TAN - Tax Collection and Deduction Account Number can file for online TDS return. Any individual or business who makes a particular payment which is stated under the I-T Act needs to deduct tax at source. The deposit for the same has to be made within the stipulated time. The payment categories include the following :
Income from winning horse races
Income by way of “Income on Securities”
Income by way of winning the lottery, puzzles, and others
Payment in respect of National Saving Scheme and many others
An assessee can submit an e-TDS return if the same was deducted from their income. As mentioned earlier, it is the obligation of the assessee to file within the due date or be liable to pay a penalty for delay. The categories of assessees eligible to electronically file TDS return every quarter are:
Persons whose accounts are audited u/s44AB
Persons holding an office under the Government
The Advantages of TDS Return Filing
As per the IT Act of 1961 filing TDS return is mandatory as well as it fetches some benefits to person or company. A few advantages of submitting a return and knowing the refund status are:
A steady inflow of income to the government.
Facilitates a smooth collection of taxes used for welfare.
No burden of paying tax lump sum as the payment is done every three months for the whole year
The Filing Of TDS Return
It is mandatory for every deductor to submit TDS return to the Income Tax Department of India in quarterly statements. Every detail of the returns has to be accurate and precise. Keeping up with the quarterly payments can be cumbersome and if not done on time, you may attract huge penalty.
The rate of TDS is set by the IT department based on expense recognized by them. Hence the prescribed rate of deduction varies. Keeping the threshold limit in mind while making payments can be tedious.
These things should be taken care of:
Computing your TDS payments
e-filing the TDS return
Adherence to compliance with regulations
Things to remember before Filing TDS Return on time
For any person who has TDS reduction in their pay, TDS return can be filed online. Return preparation has to be done within the prescribed time frame because for individuals who are deemed as a regular defaulter in India, a grave penalty can be charged. Therefore submitting e-TDS Return in the prescribed time is essential.
For the deductor, it is vital to deposit the subtracted TDS to the concerned government department along with the details.
The time period within which the deductor should deposit the amount and the deductee has to file for TDS refund are given below. It is important to stick to the schedule to avoid incurring a penalty.
For online TDS return, every single person who has made the TDS deduction should file the TDS return without fail. The deductor should make the quarterly submissions at the Income Tax department. There are different types of forms available in accordance with the change in the intent of the TDS deductions made. The PAN details of both the deductees and the deductor should be added in the statement. The statement should also contain information about TDS challan and the tax details among other important details.
In online TDS return, the statement/ TDS return is defined as the summary of every transaction made in relation to the quarterly TDS payments. This statement should be submitted by the deductor to the department of income tax.
For all deductors, the submission of TDS return is mandatory. It contains the details of TDS deductions and deposits made by the deductor. It should also contain PAN card details of both deductees and deductor, tax paid particulars, information about TDS challan and any other extra information the form demands.
About Filing Revised TDS Returns
In the case of online TDS return, if there are any errors committed due to incorrect challan details, incorrect PAN details or lack of PAN card details, the amount which is credited as the tax will not be reflected in the Form 16A/Form16/Form 26AS. In such cases a revised TDS return must be filed.
Also read Form 16 – Here Is About Tax Deducted At Source
To file a revised TDS return, we need two files - a consolidated file containing the details of the deductions made in the quarter; and the one is the justification report containing the information on the errors filed in the return.
When Are We Eligible For TDS Refund?
While filing online TDS returns, if you pay in excess than the actual tax amount payable, you will be eligible to claim TDS refund.
The time within which the refund is done depends on whether you have made the income tax return filing before or after the due date. In case the returns were filed on time, then you will receive the refund of the excess amount within 3-6 months.
In online TDS return, if there is a case of late filing or failure to file the returns, the individual or the company will have to face two types of penalties:
The late filing fee- U/s 2 and 234E
Non-filing penalty - U/s 271 H
Due dates for online TDS Return Submission
A TDS return has a time frame same as a tax payment. Though the return can be filed online, there is a due date for each quarterly submission. You will be receive a notification of the approaching due date well in advance and never incur a penalty for missing it.
Documents needed to file TDS Return online
The following documents have to be submitted for filing the TDS returns.
Last TDS filing details, if applicable
The period for which TDS has to be filed
Date of incorporation of the business
No. of transactions for filing TDS returns
Name of the entity - Proprietorship/ Partnership/ Company/ LLP.
You may also read Sole Proprietorship Firm: The Power Of The Single.