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TDS Return

TDS (tax deducted at source) is a method of preventing tax evasion and spillage by making it essential to deduct TDS at pre-determined rates from payments. Whether your employer gives you a salary, your customer pays you fees, or the bank pays you interest on deposits, TDS is deducted according to certain regulations and rates. TDS must be deducted from the payment and deposited with the Indian government. TDS is deducted from the amount paid to the payee. This is considered part of the tax paid, and if there is an excess TDS deducted, the taxpayer can file returns and request a refund from the IRS.

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What is TDS return?

TDS (tax deducted at source) is a method of preventing tax evasion and spillage by making it essential to deduct TDS at pre-determined rates from payments. Whether your employer gives you a salary, your customer pays you fees, or the bank pays you interest on deposits, TDS is deducted according to certain regulations and rates. TDS must be deducted from the payment and deposited with the Indian government. TDS is deducted from the amount paid to the payee. This is considered part of the tax paid, and if there is an excess TDS deducted, the taxpayer can file returns and request a refund from the IRS.

What is the meaning of a TDS certificate?

TDS certifications are Form 16, Form 16A, Form 16 B, and Form 16 C. TDS certificates must be supplied to the assesses from whose income TDS was deducted while making payment by the person deducting TDS. When TDS is deducted on interest from fixed deposits, for example, banks give Form 16A to the depositor. The employee gets the Form 16 from the employer.
TDS Return Eligibility Criteria

Employers and organizations with a valid Tax Collection and Deduction Account Number can file a TDS return (TAN). Any person making the following payments is required by the I-T Act to deduct tax at source and submit within the appropriate time for the following payments:
    • Salary Payments
    • "Income on Securities" is a type of income.
    • Winning the lottery, solving puzzles, and other games of chance
    • Winning horse races brings in money.
    • Commission on Insurance
    • Payments for the National Savings Scheme and a variety of other programmes

TDS Filing Benefits:
The next section discusses some of the benefits of filing TDS returns.
    • Filing TDS returns ensures that the lump-sum tax payment at year's end is reduced by spreading the amount over multiple months. As a result, the burden on taxpayers will be reduced.
    • Tax evasion is reduced since the TDS amount submitted by the diductor is collected by the Income Tax Department. This sum includes a percentage of the tax paid by the deductee at the time of submission. As a result, tax evasion can be avoided by submitting for TDS.
    • TDS enables for a consistent income flow to the government.
Documents required for TDS Filing:
Below are few essential documents required for TDS filing:
    • Form-16.
    • Bank and post office interest income and TDS certificates/Form 16A.
    • TDS certificates for additional sources of income.
    • 26AS is an abbreviated version of Form 26.
    • Investments that save money on taxes, as well as expenditure proofs.
    • Gains on Investments.
    • Aadhaar Number which is a unique identification number is required.
    • Investments in unlisted stocks are described in detail.
    • Details of your bank account.

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TDS Filing Procedure:

The procedure for filing TDS returns is as follows:
    • It is preferable to guarantee that the procedure of filing TDS returns is properly handled in the future to avoid procedural headaches. The following are the key steps:
    • To begin, the Form 27A has several columns that must be completed. This physical copy of the form is compared to the electronically filed e-TDS return.
    • The totals of the amount paid, and the tax withheld at source must be entered in and totaled correctly on the appropriate forms.
    • The TAN number of the company filing the TDS return must be included on Form 27A. Matching and verification can be difficult if the TAN number is incorrectly filled out.
    • The TDS return must include the amount of tax paid, as well as the payment method and challan number. Any errors in the challan numbers or payment dates can result in a discrepancy at a later date, necessitating re-filing.
    • To ensure consistency, the department has made the use of the basic form for e-TDS returns mandatory. To ensure easy tallying with the actual tax deposited, provide the 7-digit BSR code precisely.
    • Physical TDS returns can be submitted at any of the TIN-FCs operated by NSDL. If you file your returns online, you can submit them immediately to the NSDL TIN website. In this scenario, the diductor is required to use a level 2 digital signature to sign the return.
    • A provisional receipt / token number will be granted if all the information in the TDS return is correct. This is a confirmation that the return has been submitted. If the return is refused, a non-acceptance memo is given, along with the grounds for the refusal. The returns will have to be re-filed in that instance.
Penalty for failing to file a TDS Return on time

If an assesses fails to file his or her TDS Return by the required date, the assesses must pay a penalty of Rs 200 each day till the default is corrected, according to Section234E. The overall penalty, however, shall not exceed the TDS amount.
TDS Returns that have not been filed
If an assesses fails to file a return within one year of the due date, or if a person provides inaccurate information, he or she will be subject to a penalty. The fine shall not be less than Rs 10,000 and should not exceed Rs 100,000.
How long do you have to file a TDS Refund?
If a taxpayer has paid more than the actual tax amount due, he or she may be eligible for a TDS refund when filing online TDS returns. The length of time it takes to receive a refund is determined by whether the payer filed his or her ITR before or after the deadline. If the returns were filed on time, the extra amount will be refunded within 3-6 months.
However, if a return is filed late or not filed at all, the individual or entity will be subject to two types of penalties:
    • Under Sections 2 and 234E, there is a late filing fee.
    • Penalty for failure to file – Section 271 H imposes a penalty for failure to file.
Points to Consider When Filing TDS Returns

    • A single return should not be split into two sections and filed in two different places. It must be contained in a single medium.
    • In the same computer media, many TDS Returns can be filed.
    • You can also use WinZip to file the result in compressed format.
    • The computer media would be returned to the diductor after the e-tds return was accepted.
    • TIN-FC will provide you a provisional receipt if your e-TDS/TCS return file is complete in all aspects. The provisional receipt issued by TIN-FC is considered proof of your e-TDS/TCS return.
    • If your e-TDS/TCS return file is not accepted, TIN-FC will send you a Non-Acceptance Memo with the reason for rejection.
    • TDS Returns must be filed in all circumstances according to the manner outlined above, except for TDS on property, which must be filed in Form 26QB, a challan-cum-return form.
Points to Consider When Filing TDS Returns

    • A single return should not be split into two sections and filed in two different places. It must be contained in a single medium.
    • In the same computer media, many TDS Returns can be filed.
    • You can also use WinZip to file the result in compressed format.
    • The computer media would be returned to the diductor after the e-tds return was accepted.
    • TIN-FC will provide you a provisional receipt if your e-TDS/TCS return file is complete in all aspects. The provisional receipt issued by TIN-FC is considered proof of your e-TDS/TCS return.
    • If your e-TDS/TCS return file is not accepted, TIN-FC will send you a Non-Acceptance Memo with the reason for rejection.
    • TDS Returns must be filed in all circumstances according to the manner outlined above, except for TDS on property, which must be filed in Form 26QB, a challan-cum-return form.
Frequently asked questions:

    1. What's the difference between paying TDS and returning TDS?
Income tax is determined for the specific financial year and is paid on the annual income. TDS is deducted either monthly or quarterly when a salary (or interest on an investment) is paid. Only select persons who make payments have their taxes deducted at source.
    2. Is it possible to claim TDS from past years?
In general, a credit for TDS on any income can be claimed only in the fiscal year in which the income was earned, not in the fiscal year in which it was received. Any advance payment given to you during the year on which TDS was deducted is not eligible for TDS credit for that year.
    3. What software is available to help prepare the e-TDS/TCS return?
A free downloadable return preparation utility for the preparation of e-TDS/TCS is accessible on the NSDL website. Third-party suppliers, on the other hand, have created software for filing e-TDS/TCS returns.


    4. What documents do I need to file a TDS return?
The following is a list of the documents you'll need to file your tax return:
    • Form 16: TDS (Tax Deducted at Source) Certificate is another name for Form 16.
    • Salary stubs
    • Form 26AS 
    • Form 16A
    • PAN card (Personal Identification Number)
    • The Aadhaar card
    • Sections 80D to 80U deductions
    • Statement of Capital Gains

    5. Is Form 26Q filed separately from the rest of the tax return?
No, filing Form 26Q separately is not required. For all payments made to residents, Form No. 26Q and a separate annexure must be filed.
    6. Is DSC required for TDS?
Note: To submit a TDS statement successfully, the user must first register with DSC or EVC.
    7. What is the distinction between a tin and a tan number?
The Taxpayer Identification Number (TIN) is for entities that are subject to Value Added Tax (VAT), such as traders and manufacturers. All entities responsible for deducting or collecting taxes at the source are given a Tax Deduction and Collection Account Number (TAN).
    8. Who is eligible to file a TDS Return?
The TDS Return must be filed by everyone who makes a payment for designated goods or services. Individuals and HUF are not obligated to deduct TDS (Hindu Undivided family).
    9. How is the TDS refund calculated?
You would add up all your revenue from various sources, calculate your tax burden, and subtract the TDS from your income when completing your income tax return. If your TDS is larger than your total tax liability for the year, the government will owe you a refund.

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