TDS Return Filing

TDS Return Filing

Entities (both corporate and non-corporate deductors) making payments (specified under Income Tax Act) to third parties (deductees) are required to deduct tax at source (Tax Deducted at Source -TDS) from these payments and deposit the same at any of the designated branches of banks authorised to collect taxes on behalf of Government of India. They should also furnish TDS returns containing details of deductee(s) and challan details relating to deposit of tax to ITD.

As a part of automation of collection, compilation and processing of TDS returns ITD has notified an “Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003”. It is applicable to all deductors furnishing their TDS return in electronic form. As per this scheme:

  • It is mandatory (w.e.f. June 1, 2003) for corporate deductors to furnish their TDS returns in electronic form (e-TDS return).
  • From F.Y. 2004-2005 onwards furnishing TDS returns in electronic form is also mandatory for government deductors in addition to corporate deductors.
  • Deductors (other than government and corporates) may file TDS return in electronic or physical form.
  • NSDL e-Governance Infrastructure Limited (NSDL) as the e- TDS Intermediary (appointed by ITD) receives, on behalf of ITD, the e-TDS returns from the deductors.

TCS means collection of tax at source by the seller (collector) from the buyer (collectee/payee) of the goods (specified u/s 206C of Income-tax Act, 1961, like timber obtained under forest lease, scrap, any other forest produce not being timber or tendu leaves etc.,). For e.g. if purchase value of goods is Rs.10,000/-, the buyer will pay an amount of Rs.10,000/- + X (X being the value of TCS as prescribed under Income-tax Act, 1961) to the seller. The seller will deposit the tax collected at source (TCS) at any of the designated branches of the authorised banks.

Following the automation of TDS returns in 2003, ITD has now notified an “Electronic Filing of Returns of Tax Collected at Source Scheme, 2005”. . It is applicable to all deductors furnishing their TDS return in electronic form. As per this scheme:

  • It is mandatory for corporate and government deductors to furnish their TCS returns in electronic form (e-TCS return) from F.Y. 2004-2005 onwards.
  • Deductors (other than government and corporates) may file TCS return in electronic or physical form.
  • NSDL as the e-TCS Intermediary (appointed by ITD) receives, on behalf of ITD, the e-TCS returns from the deductors.

Deductors/Collectors can submit e-TDS/TCS returns through TIN-Facilitation Centres (TIN-FC) established by NSDL or may directly file at e-Filing portal.

e-TDS/e-TCS returns will be filed quarterly for F.Y. 2005-2006. However, filing of quarterly e-TDS/TCS returns facility upto FY 2006-07 has been discontinued from TIN as advised by Income Tax Department (ITD). The file formats for quarterly returns (Forms 24Q, 26Q, 27Q and 27EQ) have been notified by the ITD and have been made available on NSDL web-site.

Deductors furnishing e-TDS/TCS returns are required to furnish a control chart – Form 27A in physical form along with the e-TDS/TCS return furnished in CD/Pen Drive.

With effect from February 1, 2014, it is mandatory to submit Form 27A generated by TDS/TCS FVU (File Validation Utility) duly signed, along with the TDS/TCS statement(s). Any other Form 27A submitted will be treated as invalid submission and the same will be rejected by TIN-FC branches.

NSDL has developed a freely downloadable utility called File Validation Utility to verify whether the e-TDS/e-TCS return files prepared by the deductors/ collectors conform to the prescribed format.

Types of TDS Return Forms

Form 24Q

TDS Return Statement for Tax deducted at Payment of SalarySections Covered: 192 and rule 31A

Form 26Q

TDS Return Statement for Tax deducted at Payment Other than SalarySection Covered: 192A, 193, 194, 194A, 194B, 194BB, 194C, 194D, 194DA, 194EE, 194F, 194G, 194H, 194-I, 194J, 194LA,194LBA,194LBB,194LBC, 194N and rule 31A

Form 27Q

TDS Return Statement for Tax deducted at Payment made to Non-ResidentSections Covered: 192A,194E, 194LB, 194LBA, 194LBB, 194LBC, 194LC, 194LD, 194N, 195, 196A ,196B, 196C, 196D and rule 31A

Form 27EQ

TCS Return Statement for Tax collected Sections Covered: 206C and rule 31AA

Form 24G

The Pay and Accounts Office (PAO)/ District Treasury Office (DTO)/ Cheque Drawing and Disbursing Office (CDDO) are required to file Form 24G. Government dept pay TDS by book entry via this form and not by actual challan.

Form 27A

Form 27A is a summary of e-TDS/TCS return (Form 24Q, 26Q, 27Q & 27EQ), which contains control totals of 'Amount Paid', 'Income tax deducted at source'& ‘Tax Deposited (Total challan amount)’. The control totals mentioned on Form 27A should match with the corresponding control totals in e-TDS/TCS return file. Form 27A is required to be furnished separately for each e-TDS/TCS return (Form 24Q, 26Q, 27Q & 27EQ).

Form 26QB

TDS Return Statement for Tax deducted at Payment made to for Purchase of Property above 50 Lakh see sec. 194-IA, rule 30 and rule 31A.

As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property exceeds or is equal to ₹ 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% or 0.75% should be deducted (depending upon the Date of Payment/Credit to the Seller) by the purchaser of the property at the time of making payment of sale consideration. Tax so deducted should be deposited to the Government Account through any of the authorised bank branches.

Points to be remembered by the Purchaser of the Property:

  1. Deduct tax @ 1% or 0.75% from the sale consideration (depending upon the Date of Payment/Credit to the Seller).
  2. Collect the Permanent Account Number (PAN) of the Seller and verify the same with the Original PAN card.
  3. PAN of seller as well as Purchaser should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction.
  4. Do not commit any error in quoting the PAN or other details in the online Form as there is no online mechanism for rectification of errors. For the purpose of rectification you are required to contact Income Tax Department.

Points to be remembered by the Seller of the Property:

  1. Provide your PAN to the Purchaser for furnishing information regarding TDS to the Income Tax Department.
  2. Verify deposit of taxes deducted by the Purchaser in your Form 26AS Annual Tax Statement.

Form 26QC

Payment of TDS on Rent of Property. Sections Covered:

As per Finance Act, 2017, “TDS on Rent” under section 194-IB is liable to be deducted by Individuals or HUFs (Hindu Undivided Family) (other than an individual or a HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid) responsible for paying to a resident monthly rent exceeding ₹ 50,000. Section 194-IB of the Income Tax Act, 1961 states that for all the transactions with effect from June 1, 2017, tax @ 5% or 3.75% should be deducted (depending upon the Date of Payment/Credit to the Landlord) by the Tenant/ Lessee/ Payer of the property at the time of making payment of rent (to Landlord / Lessor/ Payee). Tax so deducted should be deposited to the Government Account through any of the authorized bank branches.

Points to be remembered by the Tenant of the Property:

  1. All individuals or HUFs (except those liable to audit under clause a and b of section 44AB) paying monthly rent to a resident in excess of ₹ 50,000 are liable to deduct TDS under section 194-IB
  2. Deduct tax @ 5% or 3.75% from the rent payment made to the Landlord (depending upon the Date of Payment/Credit to the Landlord).
  3. Collect the Permanent Account Number (PAN) of the Landlord and verify the same with the Original PAN card.
  4. PAN of the Landlord as well as Tenant should be mandatorily furnished in the online Form for furnishing information regarding the rent.
  5. Do not commit any error in quoting the PAN or other details in the online Form. For the purpose of error rectification you have to contact Income Tax Department.
  6. Download and furnish TDS certificate in Form 16C from TRACES and issue to the Landlord / Lessor/ Payee within 15 days from the due date of furnishing of the challan-cum-statement in Form 26QC.
  7. If the Landlord / Lessor/ Payee is a non-resident, liability to deduct TDS arises under section 195 of the Income-tax Act, 1961

Points to be remembered by the Landlord of the Property:

  1. Provide your PAN to the Tenant for furnishing information regarding TDS to the Income Tax Department.
  2. Verify deposit of taxes deducted by the Tenant in your Form 26AS Annual Tax Statement.
  3. Insist on obtaining Form 16C from the tenant which has been downloaded from TRACES website only.

Form 26QD

Payment to Resident Contractors, Payment of Commission, Brokerage charges and Fees for Professional Services. Sections Covered:

As per Finance Bill of 2019, “TDS on PAYMENTS TO RESIDENT CONTRACTORS AND PROFESSIONALS” is applicable to Individuals and HUFs (Hindu Undivided Family) making ‘Payments to Resident Contractors and Professional’ value greater than ₹ 50,00,000. Section 194M of the Income Tax Act, 1961 states that for all the transactions with effect from September 1, 2019, Tax @ 5% or 3.75% should be deducted (depending upon the Date of Payment/Credit to the Deductee) by the Payer/Deductor at the time of making ‘Payments to Resident Contractors and Professional’ Tax so deducted should be deposited to the Government Account through any of the authorized bank branches.

Points to be remembered by the Payer/Deductor:

  1. All individuals or HUFs (except those liable to audit under clause a and b of section 44AB) making payment to a resident greater than ₹ 50,00,000 are liable to deduct TDS under section 194M.
  2. Tax @ 5% or 3.75% to be deducted from the payment made to the Payee/Deductee(depending upon the Date of Payment/Credit to the Deductee).
  3. Collect the Permanent Account Number (PAN) of the Payee/Deductee and verify the same with the Original PAN card.
  4. PAN of the Payee/Deductee as well as Payer/Deductor should be mandatorily furnished in the online Form used for furnishing information regarding the payment.
  5. Do not commit any error in quoting the PAN or other details in the online Form. For the purpose of error rectification you have to contact Income Tax Department.
  6. Download and furnish TDS certificate in Form 16D from TRACES and issue to the Payee/Deductee within 15 days from the due date of furnishing of the challan-cum-statement in Form 26QD.

Points to be remembered by the Payee/Deductee

  1. Provide PAN to the Payer/Deductor to furnish the information regarding TDS to the Income Tax Department.
  2. Verify deposit of taxes deducted by the Payer/Deductor in your Form 26AS Annual Tax Statement.
  3. Insist on obtaining Form 16D from the Payer/Deductor which has been downloaded from TRACES website only.
  4. The Payee/Deductee can apply to the Assessing Officer under Section 197 to obtain Nil or Lower TDS certificate in respect of sum paid or payable which are subject to TDS under section 194M if his estimated tax liability are justified to the satisfaction to the Assessing Officer to issue such certificate.

TDS Return Filing Due Date and Late Filing Fees

TDS Return Filing Due date for FY 2021-22

TDS Return Filing Due date for FY 2020-21

These date are for regular returns which are filed regularly. For example 24Q, 26Q, 27Q etc. Due date for TDS Return of Tax deducted on Purchase of Property is within 30 days from the end of the month in which payment is made.

Payment of TDS (Due Date, Interest)

TDS Payment Due date

Interest on Late deduction: 1% p.m

Interest on Late Payment: 1.5% p.m

Interest under TDS is calculated on calendar month basis. i.e. If you pay TDS of April on 8th May, you have to interest of 2 month (April & May). Even though if you pay TDS on 31st May you need to pay interest for 2 month. But if you pay TDS of April on 1st June then you need to pay interest for 3 month.

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