What is TDS?
TDS (Tax Deducted at Source) is an indirect system of deduction of tax according to the Income Tax Act, 1961 at the point of generation of income. Tax is deducted by the payer and is remitted to the government by him on behalf of the payee.
A TDS Return is a quarterly statement which has to be submitted to the Income Tax Department of India. Submitting TDS Return is mandatory if you are a deductor. It has details of TDS deducted and deposited by you.
How to file TDS?
Step 1: Go to http://incometaxindiaefiling.gov.in/ and click on ‘Login Here’.
Step 2: Enter your login credentials and click on ‘Login’. Your user ID will be your TAN.
Step 3: Once you’ve logged in, click on the ‘Upload TDS’ option under the TDS tab.
Step 4: You will be provided with a form where you will need to select the correct details. Once the details are selected, click on Validate.
Note that TDS statements can be uploaded only from FY 2010-11 and only regular statements can be uploaded on the income tax website.
Step 5: The returns can be validated through the following modes:
Step 5a: Validate using DSC or Digital Signature Certificate. The TDS statements can be uploaded using DSC. To upload using DSC, first upload the TDS zip file and also attach the digital signature file. Then, click on Upload.
Once the TDS statement is uploaded, a success message will appear on the screen and a confirmation mail will be sent to your registered email ID.
Step 5b: Validate using EVC or Electronic Verification Code. After step 4, if you haven’t generated a DSC, you will be able to validate the TDS statements using an electronic verification code (EVC). Upload the TDS zip file and click on ‘Click here to E-verify’.
The next screen will give you the option to use an EVC already generated or generate a new EVC.
Select the relevant option, enter the EVC and click on ‘Submit’.
Frequently Asked Questions (FAQs)
Ans. TDS means Tax Deducted at Source. It is the amount deducted from payments of various kinds such as salary, contract payment, commission etc. This deducted amount can be adjusted against the tax due of the deductee.
Ans. It is the duty of the person who is making payment to someone for specified goods or services to deduct TDS and file TDS return. The specified payment includes salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. The person who deducts TDS is called deductor and the person whose tax is being deducted is called deductee.
TDS is not required to be deducted by Individuals and HUF except for those whose accounts are required to be audited u/s 44AB i.e. whose gross receipts in preceding financial year in case of business is more than 2 crore (AY 2017-2018) or 1 crore ( AY 2016-2017) and in case of profession 50 lakhs ( AY 2017-2018) or 25 lakhs (AY 2016-2017).
Ans. TAN is an alphanumeric 10 digit number required by a person who is liable to deduct TDS and file TDS return. Thus such person must make an application within a month of deducting TDS for allotment of Tax Deduction and Collection Number (TAN) in Form 49B. This number allotted is mandatory to mention in all TDS Certificates issued, returns, challans etc. If a person fails to apply for TAN he may be penalised up to Rs. 10,000/-.
Ans. Different types of TDS forms are as follows:-
Form 24Q -TDS on Salaries
Form 26Q – TDS on payments other than Salaries
Form 27Q – TDS on payments made to Non-Residents
Form 27EQ – TCS
Ans. PAN of the deductor has to be given by Non-Government deductors. It is essential to quote PAN of all deductees.
Ans. Due dates of submission of quarterly TDS Return is 31st July for Q1, 31st October for Q2, 31st January for Q3, and 31st May for last quarter.
Ans. Following table gives the types of payments, threshold limits and the rates at which TDS is to be deducted.
|Section||Particulars||TDS Rates in %||Threshold limits|
|192||Salary||As per the rates of Income Slab||As per the rates of Income Slab|
|192A||Payment of accumulated balance of provident fund which is taxable in the hands of an employee||10||Rs. 50,000|
|193||Interest on securitiesInterest on SecuritiesInterest on Debentures;||
|Interest on 7.75% GOI saving bonds – Rs. 10,000
Others – Rs. 2,500
Interest on debentures – Rs. 5,000
(other than the listed companies)
|10||Senior citizen – Rs. 50,000
Others – Rs. 40,000
|194A||Income by way of interest other than interest on securities||10||Rs. 5,000|
|194B||Winnings from lotteries/ puzzles/card games.||30||Rs. 10,000|
|194BB||Income by way of Winnings from horse races||30||Rs. 5,000|
|194C||Payment to contractor/sub- contractorHUF/IndividualsOthers||
|Single payment – Rs. 30,000
Aggregate payment – Rs. 1,00,000
|194D||Insurance commission||5||Rs. 15,000|
|194DA||Payment in respect of life insurance policy||1||Rs. 1,00,000|
|194EE||Payment of NSS Deposits||10||Rs. 2,500|
|194F||Payment on account of repurchase of unit by Mutual Fund or Unit trust of India||20||Nil|
|194G||Commission on sale of lottery tickets||5||Rs. 15,000|
|194H||Commission or brokerage||5||Rs. 15,000|
a) Plant & Machineryb) Land or building or furniture or fitting
|Rs. 2.4 lakhs|
|194-IA||Payment on transfer of certain immovable property other than agricultural land||1||Rs. 50 lakhs|
|194-IB||Payment of rent by individual or HUF not liable to tax audit||5||Rs. 50,000 per month|
|194-IC||Payment of monetary consideration under Joint Development Agreements||10||–|
|194J||Any sum paid by way ofFee for professional servicesFee for technical servicesRoyalty,Remuneration/fee/commission to a director orFor not carrying out any activity in relation to any businessFor not sharing any know-how, patent, copyright etc.||10||Rs. 30,000|
|194K||Dividend income from shares and mutual fund||10||Rs. 5,000|
|194LA||Payment of compensation on acquisition of certain immovable property||10||Rs. 2.5 lakh|
|194LBA||Income distribution by a Business Trust u/s 115UA||10||–|
|194LBB||Income distribution by a Investment Fund u/s 115UB||10||–|
|194LBC||Income distribution by a Securitisation Trust u/s 115TCA||25% in case of Individual or HUF 30% in case of other individual||–|
|Any other Income||10||–|
Ans. Payment can be made online on NSDL by selecting Challan 281 and making the payment using net banking. These TDS payments need to be made before filing the TDS return.
E-payment is compulsory for all Corporate assesses & non-corporate assessees who are liable for audit u/s 44AB.
Physical payment can be made using Challan 281 in authorised bank branch.
Ans. Every person deducting tax as per provisions of section 203 is required to issue a certificate to the payee in respect of tax deducted by him along with certain other particulars. This certificate is called TDS Certificate. Even banks deducting TDS on pensions issue TDS certificates.
Types of TDS certificate to be issued in different cases:
Salaries: Certificate is to be issued in Form 16 containing details of TDS Payment, tax deducted at source and tax calculation based on which TDS was estimated. The certificate should be issued within 31st May of next financial year.
Non Salary Payments: Certificate is to be issued in Form 16A containing details of payment and tax deducted at source. The certificate should be issued within 15 days of due date of filing the return.
TCS: Certificate to be issued in Form 27D containing the Tax Collected & Paid details.
Failure to issue certificate will result in penalty of Rs. 100 for every day the failure continues but limited to the TDS amount.
Ans. Once tax is deducted the deductor should deposit the tax deducted with Central Government within time limit specified in the table below:
|Type of Deductor||Payments made between April – Feb||Payments made in March|
|Government||Without Challan: Same dayWith Challan: On or before 7th of next month||Without Challan: Same dayWith Challan: On or before 7th of next month|
|Other than Government||On or before 7th of next month||On or before 30th April|
|Other than Government (payment u/s 194IA)||On or before 30th of next month||On or before 30th of next month|
Ans. It is a document which serves as an annexure to the intimation to be sent to the deductor. Intimation will be sent to the deductor through mail / post but a justification report will have to be downloaded from the portal.
Ans. According to Section234E, if an assessee fails to file his/her TDS Return before the due date, a penalty of Rs 200 per day shall be paid by the assessee until the time the default continues. However, the total penalty should not exceed the TDS amount.
Ans. If an assessee has not filed the return within 1 year from the due date of filing return or if a person has furnished incorrect information, he/she shall also be liable for penalty. The penalty levied should not be less than Rs 10,000 and not more than Rs. 1,00,000.
Ans. After submitting the return, if any error is detected, such as incorrect challan details or PAN not provided or incorrect PAN provided, the tax amount credited with the government will not reflect in the Form16/ Form 16A/ Form 26AS.
To facilitate conformity and make sure that the tax amount is properly credited and reflected in the Form 16/Form 16A/ Form 26AS, a revised TDS return has to be filed.
Ans. The following are the different types of corrections that are to be made in order to submit an error-free TDS return:
The above mentioned charges would also be required to be again paid in case a revised return is filed by the deductor.
Revised Return can be filed multiple times to incorporate any changes.
Ans. TDS is the tax amount deducted at the time of payment. At the year end, while assessing the total tax liability, there is a difference between the total tax deducted during the year and the actual tax liability. If the tax deducted at the source is less than the actual tax liability, then the difference between the two has to be paid by the assessee. On the other hand, if the tax deducted at source is more than the actual tax liability, it results in TDS refund.
According to Section 200A of the I-T Act, 1961, if the income tax department does not pay the TDS refund amount within the specified time period, they will have to pay an interest of 6% p.a. on the refund amount. This interest is calculated from the first month i.e. April of any financial year. However, no interest is applicable if the TDS refund amount is less than 10% of actual tax liability.