Tax Deducted at Source Return – Complete Guide

The objective of Tax Deducted at Source Return (TDS) return is to collect tax at the source of income. According to this, a deductor who must make a payment of a specific sort to a deductee is responsible for deducting tax at the source and sending it to the Central Government. Read more to know about TDS return and how to file TDS return quarterly. 

When a business or an individual makes a payment, Tax Deducted at Source Return will be deducted if the payment exceeds specified limits. The withheld tax is then deposited with the Income Tax Department. Generally, tax deductions range between 1% and 10%.

Tax Deducted at Source Return

TDS return is a statement submitted to the Income Tax department. A deductor is liable to deposit income tax and file for TDS return before the due date for every quarter.

Based on Form 26AS or TDS certificate provided by the deductor, the deductee is entitled to credit for the amount deducted. 

TDS Return Filing

Apart from depositing the tax, the deductor is liable for filing TDS returns. Tax Deducted at Source Return filing is a quarterly statement that the deductor must submit to the Income Tax department before the due date. File it online, and the return’s details will appear on Form 26 AS following the submission.

Tax Deduction and Collection Number (TAN) 

The abbreviation TAN refers to the Tax Deduction and Collection Account Number. It is a unique ten-digit alphanumeric number assigned by the Income Tax Department (ITD) of India. Everyone who has to pay or deduct taxes needs a TAN number. Individuals who earn a salary are not required to obtain a TAN.

Who Can File Tax Deducted at Source Returns?

Employers and organizations who avail of a valid Tax Collection and Deduction Account Number (TAN) can file TDS return. Anybody who makes specified payments mentioned by the Income Tax Act is liable to deduct tax at source and deposit it within the prescribed time for the following payments:

• Salary Payment
• Income on securities
• Income by winning the lotteries, puzzles, and others
• Income from winning horse races
• Insurance commissions.
• Payment concerning the National saving scheme and many others.

Types of TDS Return Forms

It is essential to know that there are various types of Tax Deducted at Source Return forms for different situations since the deductor is required to deduct tax and file the TDS Return form as a supporting document. The deductee’s nature of income or the type of deductee who pays TDS determines the type of TDS Return Form. Form 24Q, 26Q, 27Q and 27EQ are some types of TDS Forms.

Form 24Q

Taxpayers use this form to declare the Tax Deducted at Source Returns of citizens in detail. The form will include details regarding the employee’s compensation and tax deductions.

Form 26Q

This form deducts TDS on all payments received other than salary. The deductor is required to submit it every quarter.

Form 27Q

NRIs and foreigners use this form to declare their Tax Deducted at Source Returns in detail. This form depends on non-salary payments made by foreigners and NRIs.

Form 27EQ

This form includes information about tax collected at the source at the end of each quarter.

Tax Deducted at Source Return Due Date

It is always important to file TDS return before the due date to avoid late penalties. Below are the TDS due dates for the filing and payment for each quarter:

Though the return can be filed online, each quarterly submission has a deadline to file TDS return.

How to File Tax Deducted at Source Return Online

TDS return filing process is explained in the following steps:

1. Start by filling out Form 27 A, which has several columns, and compare the physical copy of the Form with the E-Tax Deducted at Source Return, which has been filed electronically.
2. The next step is to accurately fill out and tally the tax deducted at the source and the total amount paid.
3. TAN of the organisations should be mentioned on Form 27A. If the TAN provided is incorrect, the verification process will be complicated.
4. The correct challan number, the mode of payment, and the tax details must be mentioned correctly while filing TDS returns. There will be a mismatch if the challan number or payment date is incorrect, and the TDS returns will also need to be filed again.
5. The basic Form used to file the e-Tax Deducted at Source Return must be used to maintain consistency. To ease the process, the 7-digit BSR must be entered.
6. The physical returns can be submitted at any TIN FC, which NSDL manages. It can be submitted electronically on the NSDL TIN’s official website.
7. If all of the information provided on the return is correct, a provisional receipt/token number will be issued. This provisional receipt/token number acts as confirmation that the return has been filed.
8. In case of rejection, a non-acceptance memo is provided, along with the reason for the rejection, and the returns must be re-filed.

TDS Certificate

It is important to provide the Tax Deducted at Source Return Certificate after the deductor has deducted the TDS. A valid TDS certificate from TRACES with a 7-digit unique certificate number and a TRACES watermark can be used to double-check the tax credit. The deductee must preserve this certificate. If the deductee loses their certificate, they may seek a duplicate TDS Certificate.

How to Check TDS Return Status

To know Tax Deducted at Source Return status, follow the steps outlined below:

1. Go to www.tdscpc.gov.in/app/tapn/tdstcscredit.xhtml
2. Enter Verification and code and click proceed.
3. Enter the required information like PAN of Deductee and TAN of Deductor.
4. Select Financial Year, Quarter and Type of Return and Click Go to view the details.

TDS Refund Status

To view Tax Deducted at Source Return refund status, follow the below steps:

1.  Sign in to e-filing website with user name, password, date of birth/date of incorporation and captcha.
2.  Go to “My Account” and finally, click Refund/Demand Status
3.  The following details will be displayed: Assessment Year, Status, Reason (For Refund Failure if any) and Mode of Payment.

Thus, TDS is an integral part of Income Tax law in India that helps deductees lessen their tax filing burden while also ensuring that the government receives consistent revenue. So, it recommends that each business entity establish a suitable control mechanism to guarantee that the Tax Deducted at Source Return guidelines are followed correctly.

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