e-TDS is a digital solution for filing TDS returns, streamlining the process for both individuals and businesses. With various forms and online options available, understanding the basics of e-TDS is essential for accurate and timely submissions.
The legal provisions for filing electronic tax deductible at source (e-TDS) returns in India are given under the Income Tax Act, 1961. These provisions are applicable to all entities required to deduct tax at source on payments made to residents and non-residents.
e-TDS returns must be filed using the prescribed form (Form 26Q) and must be furnished on or before the due date specified in the income tax act. The due date for filing e-TDS returns is the 7th day of the month following the end of the quarter in which the deduction is made. For example, if tax is deducted in the month of June, the e-TDS return must be filed by July 7th.
e-TDS returns can be filed online using the government’s e-filing portal or offline by downloading the form from the portal and submitting it to the TDS office.
It is important to note that e-TDS returns cannot be filed without first registering as a deductor with the Income Tax Department. Deductor registration can be done online on the e-filing portal or offline by filling out Form 49B and submitting it to the concerned TDS office.
Forms of Deductible at Source Returns
In India, there are three forms of Deductible at Source (DAS) Returns. They are:
Form I: Return for the first quarter of the financial year
Form II: Return for the second and third quarter of the financial year
Form III: Return for the fourth quarter of the financial year
DAS returns must be filed by the due date in order to avoid any penalties. The due date for filing Form I is July 31st, Form II is October 31st, and Form III is January 31st.
DAS returns can be filed electronically via the e-Filing portal on the website of the Income Tax Department.
Few Interesting Aspects to Understand
If your employer pays you a salary, they are required by law to deduct TDS (Tax Deducted at Source) from your income and deposit it with the Indian government. This is done to ensure that you pay your taxes on time.
However, if you are self-employed or earn an income from other sources, it is your responsibility to file your tax returns and pay your taxes on time. Filing electronic tax returns makes this process easier and faster.
There are various legal provisions under which electronic tax returns can be filed in India. These include the Income Tax Act, 1961, the Companies Act, 2013, and the Value Added Tax (VAT) laws.
What Information Constitutes Evidence of Deduction Undertaken?
If an electronic tax deduction at source (TDS) return is filed in India, the law requires that the taxpayer maintain records and provide evidence to the deductor of the tax deducted. These records may include a challan, counterfoil of bank draft/ pay order, or receipt issued by the depository participant, as per the Income Tax Rules. In case of any failure to do so, the deductor will be liable to pay interest and penalties as specified under the Income Tax Act.
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What Is the Scope of Audit and Penalties
As per the Income Tax Act,1961, audit is compulsory in the following cases:
- Companies (Section 44AB)
- Firms and LLPs (Section 44AD)
- Any person carrying on business or profession whose total turnover or gross receipts exceed ₹ 1 crore during the financial year (Section 44AB)
- Any person carrying on business or profession whose total turnover or gross receipts do not exceed ₹ 1 crore during the financial year but who is required to get his accounts audited u/s 44AD(1)(b), (c) or (d)
- Any other person as may be specified by the Board on this behalf by notification in the Official Gazette.
What Documents Have to Be Furnished Along With the e-TDS Return
- A copy of the TDS certificate issued by the deductor
- The PAN (Permanent Account Number) of the deductor
- The name, address and TAN (Taxpayer Identification Number) of the deductor
- The bank account number of the deductor
- The amount of tax deducted during the quarter
- The Challan Identification Number (CIN) for each challan used to deposit the tax deducted during the quarter
Statistics for e-TDS Return in India
e-TDS or electronic tax deductible at source returns are required to be filed in India under the following legal provisions:
- Income Tax Act, 1961
- Companies Act, 2013
- Minimum Wages Act, 1948
- Payment of Gratuity Act, 1972
- Payment of Bonus Act, 1965
- The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
- The Industrial Disputes Act, 1947
- The Contract Labour (Regulation and Abolition) Act, 1970
Since the Income Tax Department has made it mandatory for certain businesses to file their tax returns electronically, there has been an increase in the number of e-TDS returns filed in India. The e-TDS system is a simple and convenient way to file your tax return, and it also allows you to track your tax payments.
According to the latest statistics, the number of electronic tax deductible at source (e-TDS) returns filed in India in the financial year 2016-17 was nearly 2.5 crore. This is a significant increase from the previous year, when only 1.9 crore e-TDS returns were filed.
The e-TDS system is beneficial for both businesses and the government. Businesses can save time and money by filing their taxes electronically, and the government can collect taxes more efficiently. Electronic filing of taxes also helps to reduce errors and fraud.
If you are required to file an e-TDS return, you can do so using the Income Tax Department’s e-filing portal. The portal is user-friendly and easy to use, and it provides step-by-step instructions on how to file your return.
Benefits of Filing e-TDS Return
The electronic filing of tax deducted at source (e-TDS) return has several advantages. It is a paperless process and is faster and more efficient than the manual filing of TDS returns. The e-filing of TDS returns also reduces the chances of errors and makes it easier to track TDS payments.
Apart from the convenience factor, there are many other benefits of filing e-TDS returns. Firstly, it helps to save time and energy as you do not have to travel to the income tax office to file your return. Secondly, it is a safe and secure way to file your taxes as all the information is transmitted electronically. Thirdly, it helps you to keep track of your TDS payments and ensure that they are being made on time. Lastly, e-filing of TDS returns is mandatory for certain categories of taxpayers, such as corporate taxpayers and those who are required to deduct TDS on salaries.
The Future of e-TDS Return in India
The legal provisions for e-TDS return filing in India are still evolving and there is no clear consensus on the best way forward. Currently, the Income Tax Department allows e-TDS returns to be filed using either the Electronic Verification Code (EVC) or the Digital Signature Certificate (DSC).
There are pros and cons to both methods, but the bottom line is that e-TDS returns must be filed in a manner that is secure and accurate. The use of EVC or DSC ensures that the return is digitally signed and therefore considered legal and valid.
It is worth noting that the Central Board of Direct Taxes (CBDT) is working on a new system for e-TDS returns, which will likely be introduced in the near future. This new system will make it even easier to file e-TDS returns, and we can expect it to become the new standard.
Conclusion
While electronic tax returns can be filed under various legal provisions in India, it is advisable to file them under the provision that best suits your individual situation. If you are unsure of which provision to file under, speak to a qualified tax professional who can help you determine which one is right for you.
FAQs on e-TDS
What is the form of TDS returns?
TDS returns are filed using forms designated by the Income Tax Department, such as Form 24Q, 26Q, 27Q, and 27EQ, based on the type of payment.
Can I file TDS return online myself?
Yes, individuals and businesses can file their TDS returns online through the e-TDS process provided by the Income Tax Department's official portal.
Who is required to file TDS return?
Any person or organisation that deducts tax at source (TDS) and has a TAN (Tax Deduction Account Number) is mandated to file TDS returns.
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