TDS details are filed using Form 26Q when payments other than salary are made. The form shows the total amount paid and the amount of TDS deducted during the quarter. Quarterly submissions of Form 26Q are required.
The Indian government collects income tax through Tax Deducted at Source (TDS). TDS stands for Tax Deducted at Source. The TDS amount is deducted in accordance with the Income Tax Act of 1961. Any payment included in the TDS provisions is paid after the amount is deducted. It is deducted at the government-specified percentage.Form 26Q Tds Return Filing Forms Due Dates Penalties
The TDS collection process is managed and controlled by the Indian Revenue Service under the Department of Revenue. The Indian Revenue Service is a part of the Central Board of Direct Taxes (CBDT). This department is extremely important for the government or legal boards in conducting audits.
In this case, the source can be employers, promoters, contractors, or any payer who pays someone else. Employees, part-timers, freelancers, and others who pay others must also file TDS returns. The payee must file quarterly TDS returns to CBDT. Also, the TDS return details must include information on the total TDS deducted, payment to the government in that particular quarter etc.
| Illustration – If person X makes payment to a person Y, the payer X has to deduct TDS on certain occasions. And this payment does not include the payment of salary and must be non-salary income, and the payer has to file a TDS return in FORM 26Q. |
26Q TDS Return Meaning
Form 26Q is a statement of TDS (Tax Deducted at Source) that is filed by the deductor to the Income Tax Department in India. It contains details of TDS deducted and deposited against payments made to non-salaried individuals and entities. Form 26Q is a mandatory requirement for individuals or entities responsible for deducting TDS.
How to Download Form 26Q?
To download Form 26Q, you can follow these steps:
- Visit the official Income Tax e-filing portal https://www.incometaxindiaefiling.gov.in/.
- Log in to your account using your user ID and password.
- After logging in, go to the “TDS” tab.
- Under the “TDS” tab, select “Form 26Q” from the dropdown menu.
- Choose the assessment year for which you want to download Form 26Q.
- Click on the appropriate Form 26Q link to download the form in PDF or Excel format.
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Details to be Mentioned in Form 26Q
Form 26Q requires various details related to Tax Deducted at Source (TDS). Some of the key details to be mentioned in Form 26Q include:
- Deductor Details: This section includes the name, address, and TAN (Tax Deduction and Collection Account Number) of the deductor.
- Deductee Details: It includes the name, address, PAN (Permanent Account Number) and the nature of payment made to the deductee.
- TDS Amount: Details of the TDS deducted, including the amount and the date of deduction.
- Challan Details: Information about the TDS payment made, such as BSR code of the bank branch, date of deposit, and the Challan Identification Number (CIN).
Rate of Interest
Missing a TDS deadline can result in interest charges. Here’s a breakdown of the rates:
- Missed Deduction: If you forget to deduct TDS at the source, you’ll be charged 1% interest per month on the tax amount you should have deducted. This interest starts accruing from the date the TDS was originally due until the day you actually deduct it.
- Late Deposit: Even if you deduct TDS on time, there’s a penalty if you don’t deposit it with the government by the due date. In this case, you’ll be charged 1.5% interest per month on the deducted amount. This interest starts from the day you deducted the TDS and continues until the day you finally deposit it.
Submission of Form 26Q:
Form 26Q is submitted every quarter. The total amount paid to the payee during the particular quarter and the TDS deducted on such payments have to be furnished in Form 26Q.
All non-government deductors will be required to quote the PAN, whereas, government deductors will be quoting ‘PANNOTREQD’ on the form.
What is the Use of Form 26Q?
Think of Form 26Q as a report card for taxes deducted from various payments you make. In India, if you’re a business or individual making payments like professional fees, rent, or interest, you might need to deduct tax at the source (TDS). Form 26Q helps you track and report this deducted tax to the government.
Here’s why it’s important:
- Tracks Non-Salary TDS: Unlike salaries where tax is deducted automatically, Form 26Q helps report TDS on other income sources.
- Covers Various Payments: This includes payments for professional services, interest earned, director fees, and dividend income.
- Quarterly Submission: You’ll need to file Form 26Q every quarter, keeping the government updated on deducted taxes.
- Tax References: The form uses specific sections (193, 194, and 200(3)) of the Income Tax Act to determine the applicable tax deduction rates.
- PAN Identification: Businesses need to include their PAN (Permanent Account Number) for identification, while government entities can use “PANNOTREQD.”
How to File Form 26Q?
Filing Form 26Q can be done online through the government’s e-filing portal. Here’s a simplified breakdown:
- Log In: Head to the e-filing portal and sign in using your TAN (Tax Deduction and Collection Account Number) and password.
- Navigate to TDS Returns: Once logged in, look for the “e-file” section and select “Income Tax Forms” followed by “File Income Tax Forms.” There, you’ll find an option for “File Now” specifically for filing Quarterly TDS Returns.
- Select Details: Choose “Form 26Q” from the available form types. Enter the relevant financial year, quarter for which you’re filing, and how you’ll be uploading the form (usually a zip file).
- Attach and Verify: Attach the completed Form 26Q zip file and proceed with e-verification. This confirms the information you’ve submitted is accurate.
- Complete E-verification: Choose “Yes” to confirm e-verification and follow the on-screen instructions to finalise the submission using your preferred method.
Note: The portal provides a table with section codes you might need while filling out the form.
List of Sections Covered under Form 26Q:
| Section | Nature of Payment | Section Code |
| 193 | Interest on securities | 193 |
| 194 | Dividend | 194 |
| 194A | Interest on than interest on securities | 94A |
| 194B | Winnings from lotteries and crossword puzzles | 94B |
| 194BB | Winnings from horse race | 4BB |
| 194C | Payment of contractor and sub-contractor | 94C |
| 194D | Insurance commission | 94D |
| 194EE | Payment with regards to the deposits under the national savings scheme | 4EE |
| 194F | Payments made on re-purchase of any units by UTI or Mutual Funds | 94F |
| 194G | Commission, prize etc., on sale of lottery tickets | 94G |
| 194H | Commission or Brokerage | 94H |
| 194I (a) | Rent | 4IA |
| 194I (b) | Rent | 4IB |
| 194J | Fees for Professional or Technical Services | 94J |
| 194LA | Compensation Payment any immovable property acquisition | 4LA |
| 194LBA | Certain income from units of a business trust | 4BA |
| 194DA | Payment in respect of life insurance policy | 4DA |
| 192A | Payment of accumulated balance due to an employee from the trustees of the Employees’ Provident Fund Scheme, 1952 | 92A |
| 194LBB | Income in respect of units of investment fund | LBB |
| 194IA | Payment on transferring any immovable property ( This does not include any agricultural land) | 9IA |
| 194LBC | Income in respect of investment in securitization trust | LBC |
Need for Filing TDS:
Both the government and the taxpayers are benefitted from receiving and paying TDS respectively. The advantages are as follows –
- TDS helps the government to collect taxes regularly
- It enables a regular flow of income to the government
- Paying TDS quarterly has reduced the overall burden of paying a huge tax amount all at once.
- TDS helps to distribute the tax payment into parts spread over several months making it easier for the taxpayer.
- Taxpayers are also provided with an easy mode of tax payment through TDS.
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Deductor Category under Form 26Q:
- Statutory Body ( Central government)
- Statutory Body (State government)
- Autonomous Body (Central government)
- Autonomous Body (State government)
- Local Authority (Central government)
- Local Authority (State government)
- Company
- Branch/ Division of Company
- Association of Persons (AOP)
- Association of Person (Trust)
- Artificial Juridical Person
- Body of Individuals
- Individual/HUF
- Firm
Due Dates for Filing Form 26Q
| Quarter | Due Date |
| April to June | 31st July |
| July to September | 31st October |
| October to December | 31st January |
| January to March | 31st April |
Penalties for not Filing Form 26Q:
When a deductor does not submit Form 26Q within the deadline, then they will be subjected to one or more of the penalties listed below:
- If a deductor does not file the TDS on the submission date, he/she/they may have to pay a late filing fee.
- The deductor also has to pay interest on the TDS amount, if he misses the submission deadline.
- The deductor is charged with a larger penalty when they fail to file TDS within the deadline or fail to deposit the amount within the given one-year time period from the actual due date.
The modified rules, effective from April 1, 2017, can make you liable to pay a maximum penalty of ₹10,000.
FAQs:
1. How is Form 26Q different from Form 24Q?
Form 24Q is used for preparing eTDS returns for the TDS deducted on salary payments, while Form 26Q is used for the TDS on all the payments received other than salary.
2. Is it possible to revise a filed Form 26Q?
Yes, it is possible to revise a filed Form 26Q. The revised form should be submitted within one year from the end of the financial year in which the payment was made.
3. What details are to be filled in Form 26Q?
Form 26Q includes details such as the name and PAN of the deductor, the name and PAN of the deductee, the amount paid, the TDS deducted, and the nature of the payment.
4. When should an individual or a company opt for Form 26Q instead of other forms?
An individual or a company should opt for Form 26Q instead of other forms when the TDS is on payments received other than salary such as dividend on securities, interest on securities, directors’ remuneration, professional fees, etc.
5. What are the sections under which TDS is reflected in Form 26Q?
TDS is reflected in Form 26Q under sections 200(3), 193, and 194 of the Income-tax Act.
6. Are there any exemptions or deductions applicable while filing Form 26Q?
Yes, there are exemptions and deductions applicable while filing Form 26Q. For example, if the deductor has either not deducted or deducted at a lower rate, reasons are to be mentioned in the form.
7. Can Form 26Q be filed for both residents and non-residents?
Yes, Form 26Q can be filed for both residents and non-residents. However, Form 27Q is used for tax deduction on income received from interest, dividends or any other sum payable to non-residents.
Conclusion
To summarize, the government views TDS deduction as a method of collecting revenue. They require the deduction of revenue from various sectors and individual entities to ensure the government’s smooth operation. This reflects the country’s financial and other advancements. It also encourages taxpayers to pay their taxes in quarterly installments rather than all at once.
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