What is TDS?

The tax that is gathered by the Government of India at the time a transaction occurs is known as tax deducted at source, or TDS. In this instance, the tax must be subtracted at the moment the funds are credited to the payee's account or, if earlier, at the time of payment.

Tax is subtracted at the time of payment in this event of wage payment or the life insurance policy. This sum must be deposited with the Income Tax Department by the deductor. A portion of the tax is paid to the Income Tax Department immediately through TDS. The tax is typically subtracted between 10% and 15%.

What is TAN?

All those in charge of withholding tax at source or collecting tax at source on behalf of the government must get a TAN, or Tax Deduction and Collection Number, which is a required 10 digit alpha number. Individuals who are paid a salary are not required to obtain a TAN or deduct taxes at the source.

When dealing with sole proprietorships, enterprises and other entities must withhold tax at the source when making certain payments, such as salaries, contractor payments, and rent payments over Rs. 2,40,000 annually. Getting the TAN registrations is possible with the aid of IndiaFilings.

The entities that have a valid TAN registration have to file the TDS returns quarterly. Our TDS experts can help in computing the TDS payments and file the TDS returns while complying with the TDS regulations.

What is a TDS Certificate?

It is important to provide the TDS Certificate after the deductor has taken the TDS deduction. A valid TDS certificate from TRACES with a 7-digit unique certificate number and the TRACES watermark can be viewed by the deductee to double-check the tax credit.

The deductee is required to keep the TDS certificates. The TDS certificate for salaries is provided annually, whereas those for payments other than salaries are issued on a quarterly basis.

The deductee may ask for a duplicate TDS Certificate in the event that he misplaces the original.

Penalty for failure in filing the TDS returns

A fine of Rs. 200 is imposed under Section 234 E on the assessee every day the default continues if the assessee fails to submit the TDS returns by the deadline.

Non Filing the TDS returns

The assessee will also be responsible for paying a penalty if they failed to file their return within a year of the due date or if they provided inaccurate information. The fine imposed ranges between Rs. 10,000 and Rs. 1,000,000.

Revised TDS Returns

The tax amount credit with the government will not be recorded on the Form 16A / Form 26AS once the TDS returns have been submitted and problems have been found, such as inaccurate challan details, the PAN not being provided, or the PAN being provided incorrectly. A amended TDS return must be filed to ensure that the money is correctly credited and indicated in Forms 16/ 16A/26 AS.

Prerequisites for submission of Revised TDS returns

Only when the original TDS return has been approved by the TIN central system may the updated TDS returns be filed. The assessee has access to the TIN Central System's status. By entering the necessary information, such as the PAN and the Provisional Receipt Number/Token number on NSDL, the assessee can track the progress of the TDS returns that have been filed online.

The most current consolidated TDS statement must be used to prepare the updated TDS returns. On the TRACES website, you can download the certificate.

Claiming TDS return

TDS Credit can be claimed by the deductor, but in order to do so, the deductee must include information about the TDS in his income tax filings. When filing income tax returns, the deductee must take reasonable care to include the right TDS certificate number and TDS data.

There would be a problem with the tax credit for processing the TDS returns if the deductee provides inaccurate information.

Eligibility Criteria

Who can file TDS returns?

TDS return filing is done by organizations or employers who have availed a valid tax collection and deduction number (TAN). Any person who is making specified payments mentioned under the Income Tax Act is required to deduct the taxes at the sources and they are needed to deposit the tax within the stipulated time for making the following payments.

• Salary Payment
• Income on securities
• Income by winning the lotteries, puzzles, and others.
• Income from winning horseraces
• Insurance commissions.
• Payment concerning the National saving scheme and many others.

Due Date for TDS Return filing

What are the due dates for TDS return filing?

The due date for the payment of the TDS deducted is the seventh of the next month.

Note: As per Circular 21/2022, the date of furnishing the TDS Statement in Form 26Q for the quarter ended 30th Sept 2022 has been extended to 30th Nov 2022.

TDS return filing procedure

How to file TDS returns online?

Here is the step-by-step procedure to file the TDS returns online.

Step 1: Firstly, Form 27 A containing multiple columns has to be filled and in case of the hard copy of the Form, it has to be verified along with the E-TDS return that has been filed electronically.

Step 2: In the next step, the tax that is deducted at the source and the total amount that has been paid needs to be correctly filled as well as tallied.

Step 3: The TAN of the organizations is to be mentioned on Form 27 A. There will be difficulties in the process of verification if the mentioned TAN is incorrect.

Step 4: While filing the TDS returns the appropriate challan number, the mode of the payment, and the tax details have to be mentioned. In case of the incorrect challan number or the incorrect date of the payment, there will be a mismatch and the TDS returns also need to be filed again.

Step 5: To bring consistency the basic Form used for Filing the e-TDS must be used. The 7 Digit BSR has to be entered for easing the tallying process.

Step 6: Physical TDS returns are to be submitted at the TIN FC, which is managed by NSDL. In case of the online filing, they can be submitted on the official website of the NSDL TIN.

Step 7: If the provided information is correct then a token number or a provisional receipt is received. This is a proof that TDS return has been filed.

Step 8: In case of rejection, a non-acceptance memo along with the reason for the rejection is issued and the returns have to be filed again.