How to File Tax Deducted at Source Return?

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

TDS Returns are a crucial compliance requirement for businesses and individuals deducting tax at the source. It involves submitting details of TDS deductions to the Income Tax Department using specific forms like Form 24Q, 26Q, 27Q, and 27EQ based on the type of payment. Timely filing ensures compliance, avoids penalties, and enables seamless tax credit claims for deductees. Understanding the Tax Deducted at Source Return process, selecting the right forms, and meeting due dates are essential for hassle-free TDS return filing. Additionally, the deduction of tax at source from salary is an important aspect that employers must comply with to ensure accurate tax reporting and employee tax credits.

Understanding TDS Return Filing

Tax deducted at source 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.

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 TDS 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.

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%.

Types of TDS Return Forms

It is essential to understand that different TDS Return forms apply to various scenarios. The deductor must deduct tax and submit the appropriate return form as supporting documentation. The type of income received or the category of the taxpayer determines the applicable form. Some commonly used TDS forms include Form 24Q, 26Q, 27Q, and 27EQ.

• 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.

TDS Return Due Date

It is always important to file Tax deducted at source 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 TDS Return Online

TDS return filing process is explained in the following steps:

Step 1: Fill Out Form 27A Correctly

• Complete Form 27A with accurate details, ensuring all columns are correctly filled.
• Cross-check the physical copy with the E-TDS return filed online to avoid discrepancies.
• This step is crucial for smooth processing and verification.

Step 2: Verify Tax Deducted and Total Payment

• Ensure the tax deducted at source (TDS) and the total amount paid are correctly calculated and entered.
• Any mismatch may lead to errors or rejection of the TDS return filing.

Step 3: Provide the Correct TAN (Tax Deduction and Collection Account Number)

• Mention the correct TAN of your organization on Form 27A to avoid verification issues.
• Incorrect TAN details can cause processing delays and complications.

Step 4: Enter the Correct Challan Details

• Ensure the challan number, mode of payment, and tax details are accurately recorded.
• A mismatch in the challan number or payment date may lead to rejection, requiring re-filing.

Step 5: Maintain Consistency with the E-TDS Form

• Use the prescribed e-TDS filing form to maintain consistency.
• Enter the 7-digit BSR (Basic Statistical Return) code correctly to streamline the process.

Step 6: Submit the TDS Returns

• Physical Tax deducted at source returns can be submitted at any TIN Facilitation Center (TIN FC) managed by NSDL.
• E-TDS returns can be filed online through the NSDL TIN portal for a hassle-free process.

Step 7: Obtain the Provisional Receipt/Token Number

• If all details are correctly filled, a provisional receipt/token number is issued.
• This token number serves as proof of successful TDS return filing.

Step 8: Address Rejections and Re-file if Necessary

• If the return is rejected, a non-acceptance memo with the reason for rejection is issued.
• Correct the errors and re-file the TDS returns to ensure compliance.

How to Find Provisional Receipt Number of TDS Return?

In case of rejections, you may need the provisional receipt number (PRN) to track and re-file your TDS return. Follow these steps to find it:

1. Visit the TRACES portal or TIN-NSDL website.
2. Log in with your TAN credentials.
3. Go to the TDS/TCS Statement Status section.
4. Enter details such as financial year, quarter, and form type.
5. Your provisional receipt number will be displayed for reference.

Calculate TDS on salary online with our TDS calculator. Find the accurate TDS calculation on salary effortlessly.

TDS Certificate

It is important to provide the TDS 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.

Steps to 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. One of the key aspects of TDS compliance is the deduction of tax at source from salary, which ensures that employees’ tax liabilities are met in a timely manner. Therefore, it is recommended 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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