What is TDS?
TDS (Tax Deducted at Source) is at source
deduction of by the responsible person for deducting the same for the following
payments :
· Payment of Salary.
· Income by way of “Income on Securities”.
· Income by way of winning lottery, puzzles and
others.
· Income from winning horse races.
· Insurance Commission.
Who deposit TDS to the government?
The deductor deposits this TDS amount to the
Income Tax department. Through TDS, some portion of tax is automatically paid
to the Income Tax department. Thus, TDS is considered as a method of reducing
tax evasion. Tax is deducted usually over a range of 1% to 30% and it should be
deposited into credit of Income Tax Department, Government of India on or
before due date. To know more about TDS payment due dates read my article Pay TDS (Tax Deducted at Source) on time and avoid penalty of 1.5% per month
What is TDS Return?
Apart from depositing the Tax Deducted at Source
(TDS), the deductor should compulsorily file a TDS return on time.
The details required during filing a return are:
· TAN of the deductor.
· PAN of the deductor and the deductee(s).
· Amount of tax deducted and paid to the government.
· TDS challan information. Form 281.
Who is responsible for TDS Return?
Employers or organizations having a valid Tax
Collection and Deduction Account Number (TAN), and deduct tax at source and
deposit tax same to the government is responsible for filling TDS Return on
time under the Income Tax Act, 1961.
Due dates of TDS Return filling of FY 2020-21:
Quarter |
Period |
Due dates of filling |
1st Quarter |
1st April to 30th June |
31st July, 2020 |
2nd Quarter |
1st July to 30th September |
31st October, 2020 |
3rd Quarter |
1st October to 31st December |
31st January, 2021 |
4th Quarter |
1st January to 31st March |
31st May, 2021 |
How TDS Return filling is done?
Various forms are available for filling TDS
Return, according to the purpose of deduction. These forms are to be filled with quarterly deduction information.
Form No |
Purpose of the Deduction |
24Q |
TDS on Salary. |
27Q |
TDS on payment to non-resident, foreign company. |
26QB |
TDS on payment of immovable property. |
26Q |
TDS on payment of contracts/ subcontracts or in other cases. |
Penalty for delay in filing of TDS Return
Section234E of Income Tax Act, 1961 clearly
states that, if an assessee fails to file TDS Return before the due date, a
penalty of Rs 200 per day shall be levied to the deductor until the time the
default continues. However, the total penalty should not exceed the TDS amount.
Penalty for non-filling of TDS Return
If a deductor fail to file a return within 1
year from the due date filling the same, or if the deductor file the return
with incorrect information, he/she shall liable to pay penalty not less than
Rs.10,000 and not more than Rs.1,00,000.
What is revised TDS Return?
If any error detected in the filed return,
such as incorrect challan details or PAN not provided or incorrect PAN
provided, TDS not reflecting in Form 16/ Form 16A/ Form 26AS, the deductor can
opt for a revised return filling, for
making correction in the TDS return.
What are the benefits of TDS Return?
As per Income Tax Act, 1961, filling regular
return of TDS is mandatory for every deductor. Some of the benefits of TDS
return are:
· It ensures regular flow of income to the government.
· It helps regular collection of taxes.
· It helps taxpayers, by reducing huge tax liability at the end of a year.
Read more: Form16,Form 16A, Form 27A, Form
24Q, Form 26QB.
