Categories, Eligibility, Documents, Deadlines, Procedure and Penalty
A quarter’s worth of TDS transactions are compiled into a TDS Return. Deductors are required to timely file a TDS return. Tax Deducted at Source is referred to as TDS. It serves as a means for the Indian government to collect taxes at the time a transaction is made. When funds are credited to the payee’s account or when payment is made, whichever comes first, the tax must be subtracted. Learn about TDS return types, forms, eligibility requirements, deadlines, penalties, and filing procedures.
- What is TDS Return?
- TDS Return Types
- TDS Return Due Dates
- Penalties for Missing or Not Filing
- Eligibility for TDS Returns
- How is a TDS return filed?
- Advantages of Paying TDS
- Statement of TDS Return Correction
- Frequently Asked Questions
TDS Return Sample
Document Required
What is TDS Return?
The deductor must submit a TDS Return, a quarterly statement, to the income tax department. A summary of all the entries for TDS paid to the Income Tax Authority and TDS gathered by the deductor is displayed in the statement. When funds are credited to the payee’s account or when payment is made, whichever comes first, the tax must be subtracted.
Generally, income recipients are required to pay income taxes. However, the government ensures that income tax is subtracted in advance from the payments made with the aid of Tax Deducted at Source regulations. The net amount is given to the income recipient (after lowering TDS). The recipient deducts the amount of TDS from his ultimate tax due and adds the gross amount to his income. For the money that has already been withheld and paid on his behalf, the recipient accepts credit.
Information Needed to Submit TDS Returns
- The Deductor’s and Deductee’s PAN
- Amount of tax revenue provided to the state
- Details of TDS Challan
- Date of Transaction Credit or Payment
- The amount that TDS is subtracted from
- The rate of TDS deduction
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A TDS Certificate: What Is It?
The payer who deducts TDS must provide TDS certificates to the payee, from whose income the deduction was made at the time of payment. TDS certifications are contained in Form 16, Form 16A, Form 16B, and Form 16C.
| Form | Certificate of | Frequency | Due date |
| Form 16 | TDS on salary payment | Yearly | 31st May |
| Form 16 A | TDS on non-salary payments | Quarterly | 15 days from due date of filing return |
| Form 16 B | TDS on sale of property | Event based | 15 days from due date of filing return |
| Form 16 C | TDS on rent | Event based | 15 days from due date of filing return |
File Your TDS Return
TDS Return Types
There are mainly 4 types of TDS Return Forms:
Form 24Q: The quarterly “Salaries” tax deducted at source statement
Form 26Q: Tax deducted at source on all payments made, except salaries, is shown on a quarterly basis.
Form 27Q: Quarterly document showing the amount of tax deducted from dividends, interest, and other payments made to non-residents.
Form 27EQ: Quarterly report on tax collection at the source.
1. Salary Payment TDS Return (Form 24Q)
A quarterly statement of tax withheld from wages under Section 192 of the Income Tax Act of 1961 is called Form 24Q. When an employer pays an employee’s salary, TDS is subtracted. TDS For TDS deduction, the employer must complete Form 24Q and send it to the Income Tax Department every quarter.
Form 24Q contains information about the pay paid, the TDS withheld from it, and the specifics of the challan. All Indian corporations and firms must submit this declaration and payment every quarter.
Annexures I and II are the two annexures included in Form 24Q. Details about the deductor, deductees, and challans are included in Annexure-I, and the deductees’ salaries are included in Annexure-II.
Annexure-I – is required to be filed by the deductor for each of the fiscal year’s four quarters.
Annexure-II – is necessary to provide and submit in the fourth quarter of the fiscal year, together with information on the employees’ pay for the full fiscal year, but it is not necessary to do so in the first three quarters of the fiscal year.
2. TDS Return on Non-Salary Payments (Form 26Q)
A quarterly statement of tax deductions on all payments other than salaries is called Form 26Q. The Income Tax Act of 1961’s sections 200(3), 193, and 194 apply to tax deducted at source, and the payer is required to make a TDS return every quarter using Form 26Q.
Unlike Form 24Q, which includes two annexures, Form 26Q only has one. Form 26Q is where the deductor, deductees, and challan details go. Interest on securities, dividend securities, professional fees, directors’ compensation, etc. are all considered forms of income from which taxes are withheld at the source.
Note: For non-government deductors, providing PAN is a mandatory requirement. The word “PANNOTREQD” must be mentioned on the form for government deductors.
3. TDS Return on Non-Resident Payments (Form 27Q)
A quarterly statement of tax deduction on all non-salary payments made to an NRI is called Form 27Q. It includes information about the payments the payer made to a non-resident during that quarter. By section 200(3) of the Income Tax Act of 1961, the Indian buyer is liable for tax deducted at source and must submit form 27Q each quarter before the deadline.
In addition to interest and bonuses, any additional income, and any amount payable to non-resident Indians or foreigners are also considered income from which tax is withheld at source.
Note: Non-government deductors are required to provide PAN. The code “PANNOTREQD” must be mentioned on the form for government deductors.
4. TDS Return on Collection of Tax at Source (Form 27EQ)
Section 206C of the Income Tax Act of 1961 provides information on the details and information of the tax collected at source, which is included in Form 27EQ, a quarterly statement. Form 27EQ must be filed every quarter, and the individual’s TAN information must be included.
The Tax Collected at Source, or the tax that the seller has collected, is displayed on Form 27EQ. The seller uses the TCS method to collect tax from the consumer when the customer purchases specific items or commodities. The buyer’s payment, made by cash, credit card, check, demand draft, or any other method of payment, is when this tax is collected.
Note: For non-government deductors, providing PAN is a mandatory requirement. The code “PANNOTREQD” must be mentioned on the form for government deductors.
Dates of Submission for TDS Returns
The following dates are the deadlines for submitting TDS returns for FY 2021–2022:
| Quarter | Quarter Period | TDS Return Due Date |
| 1st Quarter | 1st April to 30th June | 31st July, 2021 |
| 2nd Quarter | 1st July to 30th September | 31st October, 2021 |
| 3rd Quarter | 1st October to 31st December | 31st January, 2022 |
| 4th Quarter | 1st January to 31st March | 31st May, 2022 |
Penalty for late or incomplete TDS return filing
Throughout the fiscal year, TDS returns have to be submitted after each quarter. A person is subject to late fees under section 234E if he neglects to file the TDS/TCS return or fails to file the return by the deadlines specified by the Income Tax Act. He would also be responsible for paying a penalty under section 271H in addition to late filing fees.
Late filing penalties (under section 234E) for the TDS return
By section 234E, an individual who neglects to submit the TDS/TCS return by the deadline will be required to pay a ₹200 late filing fee for each day the failure persists. The late filing fees must be deposited before the TDS return can be filed, as the TDS return cannot be filed without them.
The total amount of TDS cannot be more than the late fees. For example, you will only be required to pay a late filing fee of ₹5,000 if the TDS amount is ₹5,000 and your late fee is ₹20,000.
Note: There is a late filing cost of ₹200 per day, not a penalty.
Failure to file TDS Return (as required by section 271H)
According to section 271H, the assessing officer may order someone to pay a penalty under section 271H if they fail to file the TDS/TCS return within a year after the filing date. A minimum penalty of ₹10,000 and a maximum penalty of ₹1,000,000 may be imposed.
In addition to TDS return filing delays, improper return filings are covered under section 271H. A person who provides false information may also be subject to penalties under section 271H. If an inaccurate TDS return is filed, there will be a minimum penalty of ₹10,000 and a maximum penalty of ₹1,000,000.
Note: In addition to the late filing fees specified under section 234E, there will be a penalty under section 271H.
Application and Eligibility of TDS Returns
Employers and organizations with a current Tax Deduction and Collection Account Number (TAN) can file TDS returns. Anybody making any of the specified payments listed in the Income Tax Act must withhold tax at the source and deposit it with the Central Government within the allotted time frame.
If TDS is withheld from an assessee’s income, the assessee is required to file a TDS return. The individuals or companies required to make a quarterly TDS return are those whose accounts are audited under section 44AB or who hold government office.
How to file TDS Return?
The step-by-step process to file TDS Returns online is as follows:
Step 1:- Form 27A requires numerous columns to be filled out correctly. If the form is filled out on paper, it needs to be cross-checked with the electronically filed e-TDS return.
Step 2:- It is now necessary to accurately fill out and match the tax deducted at source and the total amount paid with the corresponding forms (24, 26, 27, 27A).
Step 3:- Next, as required by sub-section (2) of section 203A of the Income Tax Act in India, the assessee filing the TDS return must include the Tax Deduction Account Number (TAN) in Form 27A.
Note:- It should be emphasized that proper information about the challan number, deductee’s PAN, and tax data must be included on the TDS forms; otherwise, the verification process would be more challenging.
Step 4:- The government recommends using the basic form, which promotes uniformity and better understanding while filling out the forms, for filing e-TDS returns. To make totaling easier, the seven-digit Bank Branch Code must be mentioned.
Step 5:- TDS returns must be physically submitted to the TIN-FC, which is run by NSDL. Returns may be electronically filed using the NSDL TIN’s official website. The TDS return must be digitally signed by the deductor.
Step6:- If every detail provided is accurate, a provisional receipt or token number will be sent. This is regarded as confirmation that the TDS return has been lodged, acting as an acknowledgment. A non-acceptance note containing the reasons for rejections is sent out if the return is not accepted. The TDS return needs to be filed afresh in these circumstances.
Advantages of TDS payment
Since TDS is due on earnings, it’s critical to remember that the need to pay TDS exists solely if earnings occur. TDS is subtracted before payment. Payments made by credit, check, or cash are subject to deductions. The money that is withheld under TDS is then deposited with other government organizations.
There are several benefits to paying TDS, some of which are listed below:
- Reducing TDS at the source stops tax avoidance.
- Taxes are collected correctly and on schedule.
- Many individuals are subject to taxes.
- The government receives a consistent stream of income from the collection of TDS.
Statement of TDS Return Correction
If it is discovered that the first return filed was incorrect or incomplete, deductors are required to file a TDS rectification statement. The error could have been in the deductee’s PAN, challan information, or TAN. Every quarter, deductors must provide a single statement in a single form for a specific TAN.
Frequently Asked Questions(FAQs)
A quarter’s worth of TDS transactions are compiled into a TDS Return. The payer or deductor must submit this quarterly statement to the income tax department.
The payer or deductor files a TDS return each quarter to notify the Income Tax Department of the tax that was withheld at the source.
The quarterly statement of tax deducted at source from salaries is called 24Q, while the quarterly statement of tax withheld at source from all other payments is called 26Q.
Yes, the deductor is required to file a TDS return with the Income Tax Department on a quarterly basis. If not, he will also be responsible for paying the penalty under section 271H and the late fees under section 234E.
A quarterly statement of tax deducted at source on all payments other than salaries is called a 26Q TDS return. Sections 193, 194 and 200(3) of the Income Tax Act, 1961 require the deductor to file a TDS return on a quarterly basis in Form 26Q.
Throughout the financial year, TDS returns have to be submitted at the conclusion of each quarter. If the TDS/TCS return is not filed on time or at all, the individual will be subject to late costs under section 234E as well as a penalty under section 271H.