TDS Return Filing

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TDS Return Filing


The source by which the government collects Tax when the transaction is taking place is known as Tax Deducted at Source (TDS). It is either deducted when the money is received in the payee’s accounts or when the payment is made to the payee, whichever is done first.

At the point of payment of life insurance policy and salary payment, Tax is deducted and then deposited to the IT department by the deductor. It helps in reducing Tax avoidance as, by TDS, some portion of the Tax is paid automatically.

Once the Tax is deducted, it is the responsibility of the deductor to file the TDS return.

TDS return is necessary to be filed by deductors before the due date starts. It is a statement of the assessee to be given to the IT department quarterly. It needs the following documents or details;

  • Deductees and deductors PAN number
  • The details about amount that was paid to government
  • Information of TDS challan

Penalty For Delay in TDS Retun Filing

To motivate people to file returns on time, the government has included a fine for late return filing and non-filing. Section 243E deals with a fine provision under which a person who fails to file TDS return till the due date will be responsible for paying the fine of Rs200 per day until it is filed. Also, it should not be more than the amount of tax that is deducted.

In situations where the person fails to file tax for an entire year and enters the defaulter list or gives incorrect information, in that situation, the penalty of minimum Rs10000 and maximum Rs1, 00,000 is imposed on the person.

Basis for TDS returns filing

Some conditions are there that need to be fulfilled to file TDS return. The organization or employees should have Deduction Account Number(TAN) or get a valid tax deduction. The person has to make particular payments and deduct tax at the same time as directed under the IT Act and needs to deposit the same within a given time duration. Following payments requires TDS;

  • Salary payment
  • Commission through insurance
  • Prize money won on horse races
  • Income received by puzzles or lottery etc
  • National saving scheme payment or other such schemes.

Procedure for Filing TAX Return

It is necessary to file the TDS before or on the due date to avoid fine.

The due dates are as follows;
  • 31st August for the first quarter ending on 30th June
  • 31st October for the second quarter ending on 30th September
  • 31st January for the third quarter ending on 31st December
  • 31st May for the fourth quarter ending 31st March.

What are the Types of TDS Forms?

There are many forms available to file TDS return such as;

  • Form 24Q for Salary
  • Form 26QB for immovable property transfer payment
  • Form 27Q for non-resident or foreigner deductee
  • Form 26Q for other cases

Depending on the scenarios mentioned above, the Form should be selected along with Form 27A, in which quarterly statements are verified, and then the deductor should file it together.

Following steps should be taken for filing TDS return:
  • All columns must be filled in Form 27A. This form is further checked with the hard copy to verify the electronically recorded e-TDS return.
  • The total tax deducted at Source and pain amount should be filled accurately, and all forms like 27A, 24, 26, and 27 number form, needs to be filled in
  • Tax Deduction Account Number (TAN) must be specified in Form 27A by the assessee as performed at the time of e-TDS return filing. It is defined in the IT Act under section 203 A and subsection (2).
  • Details about deposits of TDS (tax deducted at Source) should be specified appropriately
  • The basic form, as suggested by the department to be used for TDS return filing, should be mandatorily followed to sustain consistency and understanding the form filling. The branch code of the bank which is given to banks by Reserve Bank of India, is to be filled properly.
  • ASCII format is used for filing e-TDS, which can be operated easily by using software like TALLY, COMPUTEX, MS-EXCEL, etc. NSDL website also gives the choice of available software known as e-TDS RPU Light for online filing return. The extension of the filename should be ‘txt’ for TDS return filing.
  • NSDL manages the TIN-FC, where physical returns are filled. They are distributed throughout the country in specified areas.
  • If the file return is submitted online, the NSDL TIN website submits a return directly. The digital signature of the deductor will therefore be required.
  • The temporary receipt will be issued if the details filled in the forms are correct. This receipt is the sign of acknowledgment of the return submitted by the deductor. The non-acceptance memo will be created in case of non-acceptance, followed by rejection reasons.

TDS Refund

The amount deducted on the name of tax at the time of the transaction is known as TDS. This is paid during the year in the form of quarterly payment. At the end of the year, a difference is calculated between actual tax liability and deducted tax for the entire year. If the difference is found, where tax deducted at source is more than actual tax liability, it leads to a tax refund, and if the tax deducted is less and actual liability is more than the assessee has to pay the IT department.

TDS Refund Status

To check the status of TDS refund, the following methods can be used

  • The email is sent to confirming the status of the refund.
  • Income-tax-India-e-filling website can provide you these details if the PAN number is entered.

Refund Period OF TDS

If the assessee has paid more tax, then actual liability, then his tax is refunded. Although the refund will depend on the return filing of the assessee. If the return is submitted before the due date of filing income tax return, then the additional amount will be paid within 3 to 6 months after the filing.

Interest Applied on TDS Refund

This refers to the income tax department where according to Section 200a of the IT Act, 1961, if the IT department does not pay the TDS refund within the time defined in the Act, then the interest of 6% p.a will be charged to the amount to be refunded. Moreover, if the refund amount is only 10% or less of the actual liability, then no interest is charged; else, the interest is calculated from April (first month) of the financial year.

Points to Remember During Return Filing

Following is the list of documents which are needed for registration of TDS for many businesses:

  • The single return should be filed in one medium and should not be split into two media parts.
  • There are possible situations where TIN-FC does not accept the filed TDS/TCS return; in such cases, the TIN-FC issues Non-AcceptancesMemo specifying the rejection reasons.
  • One or more TDS returns can be filed using the same computer file.
  • Provisional receipt by TIN-FC will be issued to the filer only if the TDS/TCS returns are complete and submitted without error. The issued receipt is confirmation that TDS/TCS returns have been submitted.
  • TDS can be filed in compressed form using WinZip files
  • Once the e-TDS is approved the computer file will be returned to the filer
  • TDS returns are necessarily filed by everyone using the procedure described above. Only in matters of TDS on the property, the returns are provided using challan cum return Form known as Form 26QB.

Frequently Asked Questions ?

While paying TDS, e-payment is the mandatory process to file TDS Return online, and it becomes very easy with the support of MeraLegal.

Yes, deductors and employees must submit their PAN.

There are various benefits of TDS return filing. It is necessary to file TDS under the IT Act, 1961. Several benefits that come with it like,

  • Regular tax collection becomes simple.
  • This divides the entire tax into sections, making it simpler for the taxpayer, and the burden of the lump-sum act is reduced.
  • The flow of income to government is regularise
  • This form of tax payment offers ease in payment for the taxpayer.

It has been noticed that the due date for government and non-government appraisers is different.

TDS return due dates for government employee are;

  • Same-day for Tax deposit without challan
  • 7th of next month for Tax deposit with challan
  • 7th of next month for perquisite tax chosen by the employer

For non-government appraisers the due date for TDS return is;

  • 30th April of subsequent year for tax-deductible in March
  • 7th of next month for other months or opted tax to be deposited by appraiser
  • Quarterly payment of TDS can also be managed by appraising the officer after taking permission from the joint commissioner.
  • The quarter ended on 30th June and date for TDS to be filed is 7th July
  • The quarter ends on 30th September, and the due date for TDS to be submitted is 7th October.
  • The quarter ends on 31st December, and the due date for TDS to be submitted is 7th January
  • The quarter ends on 31st March, and the due date for TDS to be submitted is 30th April.
  • It is mandatory for all the corporate appraisers and appraisees to file TDS return under Tax Act Section 44AB, online. Those who do not come under these categories can either deposit with a prescribed bank or use an online portal.

The person who deducts TDS provides a Form to the deductee, which is called a TDS certificate. It presents the details of payment, the date of tax deducted at source, and the date of its credit to the Government. Based on this certificate, the taxpayer can demand the credit and the refund (if any).