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Concepts of TDS return filing, TDS, TAN

TDS return filing:

- TDS return filing is a statement given to the Income Tax department

- It is necessary to submit TDS returns on time and it can be filed online

- Details required for TDS returns include PAN of deductor and deductee, amount of tax paid, TDS challan information

- Details submitted on TDS returns will appear on Form 26AS

TDS:

•    TDS, which means Tax Deducted at Source, is a crucial component of India's tax system. 
•    The government collects TDS during a transaction, either at the time of payment or when money is credited to the payee's account, whichever occurs first. In case of salary payment or life insurance, tax is deducted when payment is made. 
•    The deduction amount must then be deposited by the deductor with the Income Tax Department. TDS ensures that a percentage of tax payments are sent directly to the Income Tax Department, making it a vital tool. Typically, tax is deducted at a rate of 10%.

TAN:
•    TAN stands for Tax Deduction and Collection Number. It is a 10 digit alpha number that is mandatory for those responsible for deducting or collecting tax at source on behalf of the government.
•    However, proprietorships and other entities must deduct tax at the source for certain payments such as salaries, contractor payments, and rent exceeding Rs. 2,40,000 per year. 
•    At Taxapillar, we can effortlessly assist in obtaining TAN registration. It is critical to note that entities with valid TAN registration must file TDS returns every quarter. Our TDS experts can provide excellent assistance with computing TDS payments and filing TDS returns while maintaining compliance with TDS regulations.

"WHO is eligible to submit TDS returns?"

- TDS returns are filed by organizations or employers with a valid TAN

- Anyone making specified payments under the Income Tax Act must deduct taxes at the source

- The deducted taxes must be deposited within the stipulated time for the following payments:

    - Salary payment

    - Income on securities

    - Income from winning lotteries, puzzles, etc.

    - Income from winning horseraces

    - Insurance commissions

    - Payment concerning National Savings Scheme and others

IMPORTANT DUE DATE DETAILS FOR FILING TDS RETURN:

- TDS deducted MUST be paid by the 7th of the following month. It is absolutely essential to note that while the online filing of TDS Return is possible, it must be completed on or before the due date for every quarterly submission.

- An extension has been granted for furnishing TDS statement for Quarter 2 (ending September 30, 2022) until November 30, 2022 as per Circular 21/2022. It is important to take note of these dates and comply accordingly.

Guidelines for claiming TDS return:

It is of utmost importance to take appropriate measures when claiming TDS return and credit. To ensure credit of the TDS, proper details must be included in the income return. The deductee must exercise caution in quoting the accurate TDS certificate number and other relevant TDS information while filing returns of income. Failures to do so could result in discrepancies with tax credit during the TDS return processing.

Procedural steps for filing TDS returns:
How to easily file TDS returns online?
It is essential to follow the steps below when filling out Form 27 A for accurate tax reporting. Please ensure that you use the correct information:
1.    Be sure to fill out all fields in Form 27 A diligently, as it contains several columns.
2.    Verify the hard copy of the form with the E-TDS return filed electronically to double-check that all details match.
3.    Enter the correct tax deducted at source and total amount paid.
4.    Mention the TAN of the organization on Form 27 A to avoid any confusion.
5.    Please use the proper challan number, mode of payment, and tax details for flawless reporting and Double-check the payment date and challan number to avoid mismatch issues that could arise in the future.
6.    Use the basic form and enter the 7 digit BSR for consistency in filing e-TDS
7.    Physical TDS returns should be submitted at a TIN FC managed by NSDL or online on their website
8.    A token number or provisional receipt is received as proof of filed TDS return if information provided is correct
9.    Non-acceptance memo with reason for rejection issued if TDS return is rejected, requiring re-filing.

Types of TDS forms:

There are different types of TDS forms and it mainly depends on income of the deductee or type of deductees paying taxes

·         

Form 24Q

• TDS is deducted by employers under Section 192 of the Income Tax Act 1961 while paying salary to employees.

• Employers need to file Salary TDS returns in Form 24Q every quarter.

• Form 24Q includes details of salary paid to employees and TDS deducted.

Form 26Q

- Taxpayers pay taxes and payees deduct TDS on certain occasions

- Form 26Q is used to file TDS details on payments made other than salary

- Form shows total amount paid and TDS deducted in a quarter

- Form 26Q must be submitted every quarter.

Form 27Q

- Form 27 Q is a TDS return/statement

- Contains details of Tax Deducted at Source on payments made to Non-resident Indians and foreigners

- Must be furnished every quarter or before the due date

- Contains details of payments made to NRI and TDS deducted by the deductor

Form 27EQ

- Form 27 EQ contains details of tax collected at source

- Required to be filed every quarter according to Section 206 C of the Income Tax Act 1961

- Must be submitted by corporate and government collectors as well as deductors

• It is a quarterly statement of payment made to employees and TDS deducted by the employer.

Why TDS Certificate?

- TDS certificate is necessary after TDS is deducted by the deductor

- Deductee can cross-check tax credit using a valid TDS certificate from TRACES with a 7-digit unique certificate number and a TRACES watermark

- TDS certificates are to be preserved by the deductee

- TDS certificates for non-salary payments are issued every quarter and for salary payments, annually

- In case of lost certificate, the deductee can request a duplicate certificate.

 FAILURE TO FILE TDS RETURNS BEFORE DUE DATE:

- A penalty of Rs.200 per day shall be imposed.

- The penalty is governed by Section 234 E.

- The penalty will persist until the violation is cured.

FAILURE TO FILE TDS RETURNS ATTRACTS PENALTY

- Penalty is imposed if the returns are not filed within a year from the filing date

- Furnishing incorrect information also attracts penalty

- The penalty amount starts at a minimum of ₹10,000 and can go up to ₹1,00,000.

TDS Returns - Revised

Submitting TDS returns with errors such as inaccurate challan information or incorrect PAN details can lead to the tax credit not being reflected in Form 16A/26AS. To rectify this, a revised TDS return must be filed to ensure proper crediting and reflection in Form 16/16A/26AS.

Submission Requirements for Revised TDS Returns:

- Prior to filing a revised TDS return, it is mandatory that the original TDS return is accepted by the TIN central system.

- To keep track of the filed TDS returns, the assessee can enter the PAN and Provisional Receipt Number/Token number on NSDL website.

- Please ensure that the most recent consolidated TDS statement is utilized while preparing the revised TDS returns.

- The certificate for revised TDS returns can be easily downloaded through the TRACES website.