The article talks about filing a TDS return and how to go about it. You will get a clear idea of the process intricacies and eligibility criteria and understand more about the given dates and when to file an income tax return.
Paying income taxes is an obligatory responsibility for all individuals and businesses. Income tax is a mandatory payment on the income earned from various sources during a particular financial year. The tax revenue collected by the government is spent on human capital development, infrastructural development, fund various public services, defence, disaster management, and so on. Therefore, the government depends heavily on income tax collection to carry forward its functioning and ensure the country’s development as a whole. Hence, every responsible citizen of the country must comply with their duty to file income tax on time to avoid unnecessary harassment and Nonetheless, the collection of taxes and also filing of tax returns can be a complex affair. To simplify the whole process, the concept of Tax Deducted at Source or TDS was introduced by the Income Tax department.
What is TDS?
Tax Deducted at Source or TDS process enables the collection of the tax from the very source from which individuals are earning. The process allows the person who is supposed to make payment to others for their work or contribution can deduct a portion of that payment in the form of tax and remit the same amount into the account of the Central Government. The person or the organisation carrying out this deduction process is known as the ‘Deductor’, and the person receiving this deducted amount is known as the ‘Deductee’.
Thus, TDS authorises the deductor to divide the payment amount between the actual claimant and the government. After the deduction, the deductor will have to issue a TDS certificate. The deductee thus will get the credit of the amount deducted based on Form 26AS for TDS certificate.
For example, Suppose an employer A ( deductor) is supposed to pay ₹50,000 to one of his employees B( deductee). If the specified rate of TDS is 10%, then instead of giving B the entire amount of ₹50,000, employer A will provide B only ₹45,000 and the extra ₹5000 amount he will deposit in the account of the central government.
How to File TDS Returns?
The deducted amount can be deposited in the account of the central government either through electronic payment mode or physical mode. All corporate assesses and other assesses fall under section 44AB of the Income Tax Act, 1961 and are liable for payment using the electronic mode.
For physical mode submission, authorised banks are furnished with the Challan 281. In such a case, the treasury officer or the disbursing officer who is assisting the deductor while depositing the deducted amount will be responsible for crediting the same to the account of the Central Government.
Online Filing of TDS Return
Online filing of TDS can be done through the portal of NSDL (National Securities Depository Limited) or using the portal of UTITSL (UTI Infrastructure Technology and Service Limited).
The steps that need to be followed:
Step-1 Visit the website of the Income Tax PAN Services Unit
Step-2 To ask for a new PAN, you will need to use Form 49A or Form 49AA
- These forms need to be filled with your relevant personal details.
- After filling out the form meticulously, you need to click the submit button.
- For successful submission of the form, you will receive the acknowledgement coupon number, which will be displayed on the screen.
- For future reference, this acknowledgement coupon needs to be saved and printed.
Step-3 After receiving this acknowledgement form, you need to send it to the PAN service provider, furnishing it with other details like-
- identity proof,
- address proof,
- date of birth document
It is important to note that the name and its spelling on these documents should be the same as that mentioned in the PAN application form.
The acknowledgement form needs to be furnished with your two recent coloured photographs, which must be fixed at the designated place mentioned in the state.
If your communication address is within India, your PAN application fee will be ₹105 (including taxes); for outside India, the communication PAN fee is ₹971(including tax). The amount is payable by demand draft, debit card to NSDL. For payment through demand draft or credit card payment will be in favour of UTIITSL.
Payment through internet banking or debit card/credit card needs to be carried out when filling in the PAN application form. After you make the payment, you will receive a payment receipt. The receipt of the price needs to be attached along with the acknowledgement form.
Checklist for PAN application
- Duly signed acknowledgement form
- Two passport size coloured photographs,
- Proof of identity,
- Proof of address,
- Proof of date of birth
- Receipt of the payment/payment proof
All these documents need to be submitted to the PAN service provider within 15 days after submitting the online application of PAN.
Details to be written on top of the envelope-
- APPLICATION FOR PAN ( in words)
- Acknowledgement / Coupon Number
The PAN service provider processes the applications only after the realisation of payment.
Benefits of Filing a TDS Return
- Filing TDS return enables the government: https://www.incometax.gov.in/iec/foportal/agencies to stop tax evasions. It is easier for them to track the defaulters failing to file TDS within the due dates. Thus, it helps the agencies to take necessary actions and impose penalties.
- Filing TDS returns provides the government of India with a steady source of revenue. The employers themselves file TDS for the employees under the specified slab. The Government’s job is to keep track of whether or not the employers are filing TDS regularly.
- Filing TDS returns has broadened the tax base, helping the government earn more tax revenue. As the employers themselves are authorised to file TDS and issue the certificate, the chances of tax evasion have drastically reduced.
- Keeping track of individual TDS filing is a humongous task for any agency. Therefore, assigning each employer to ensure such filing for its employees has been distributed, thus reducing its pressure. It has also made the process efficient and transparent.
- This has also reduced the pressure on the deductee, who does not need to separately file for it as he is already getting his salary/ payment after the mandatory deduction.
What Is the Interest in TDS Refund?
If TDS has deducted more than what you are liable to pay for your income, i.e., you have paid more than your actual tax liability in that financial year; you can claim refunds by filing your income tax return within the stipulated period time.
However, you will not be eligible to claim any interest on this refund if the refund amount is lower than 10% of the tax determined on regular assessment. In other cases, interests will be calculated from April of the assessment year. Under Section 234D, you will receive a 0.5% per month interest rate on the refund amount.
Penalty for Delay in Filing TDS Return
Under Section 234E, the deductor is liable to pay at the rate of ₹200 per day for each delay in deduction or collection of TDS until the day it has filed it. In addition to that, the deductor will also have to pay the interest for the delay in depositing.
- Is TAN required for TDS deduction?
- How to File TDS on Sale of Property Online?
- TDS Interest Rates you should know
- Salaried Individual Know About Their TDS Challan
- A Guide to make Property TDS Payment Online