TDS Return Filing
TDS Return Filing by Expert Mantra
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If you’ve deducted TDS while making a payment to someone, you must file a TDS return with Expert Mantra.
- Easy process
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TDS (Tax Deducted at Source) return filing is a mandatory compliance process for organizations, businesses, and employers that have obtained a Tax Deduction and Collection Account Number (TAN). TAN is a unique 10-digit alphanumeric number issued by the Income Tax Department to individuals or entities responsible for deducting or collecting tax on behalf of the government. Without this number, no entity can legally deduct or deposit TDS, making it a crucial requirement for businesses.
According to the Income Tax Act of India, any person or organization making certain specified payments must deduct tax at the time of making such payments. These payments typically include salaries to employees, contractor or professional fees, rent payments exceeding prescribed limits, insurance commissions, payments under national savings schemes, and winnings from lotteries, puzzles, or horse races. By deducting tax upfront, the government ensures timely and consistent tax collection, reducing the chances of tax evasion.
Once the tax is deducted, the deductor must deposit the collected TDS with the Income Tax Department within the stipulated deadlines. Following this, they are required to file TDS returns quarterly to report all deductions accurately. Filing TDS returns not only helps maintain proper records but also allows deductees to claim credit for the deducted tax while filing their income tax returns.
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TDS Return Filing – Simplified Overview
Tax Deducted at Source (TDS) is a system where the Government of India collects tax right when a transaction happens. This means the tax is deducted either when the payment is made or when the amount is credited to the payee’s account—whichever is earlier.
For example:
When paying salaries
When paying for a life insurance policy
In such cases, the person or business making the payment (called the deductor) deducts a certain percentage (usually around 10%) as tax and deposits it directly with the Income Tax Department. This ensures that part of the tax is collected in advance.
What is TAN?
TAN (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric number that anyone responsible for deducting or collecting tax on behalf of the government must have.
Who needs TAN? Businesses, proprietorships, and entities that deduct tax on payments like salaries, contractor fees, or rent exceeding ₹2,40,000 per year.
Who doesn’t need TAN? Salaried individuals who don’t deduct tax at source.
TDS Return Filing
Entities with a valid TAN must file TDS returns every quarter. Filing ensures that all deducted taxes are properly reported to the Income Tax Department.
Expert Mantra can help businesses:
Get TAN registration
Calculate TDS amounts correctly
File TDS returns while staying fully compliant with tax laws
Who Needs to File TDS Returns?
TDS returns must be filed by organizations or employers that have a valid Tax Deduction and Collection Account Number (TAN).
Anyone making certain types of payments (as listed under the Income Tax Act) is required to:
Deduct tax at the time of payment, and
Deposit it with the Income Tax Department within the due date.
These payments include:
Salaries paid to employees
Income from securities
Winnings from lotteries, puzzles, or similar games
Winnings from horse races
Insurance commissions
Payments under National Savings Scheme (NSS)
And other specified payments
TDS Return Filing Due Dates
After deducting TDS, it must be deposited with the Income Tax Department by the 7th of the following month.
TDS returns, however, are filed quarterly as per the schedule below:
| Quarter | Period Covered | Last Date to File |
|---|---|---|
| Q1 | 1 Apr – 30 Jun | 31 Jul 2023 |
| Q2 | 1 Jul – 30 Sep | 31 Oct 2023 (extended to 30 Nov 2023 as per Circular 22/2023) |
| Q3 | 1 Oct – 31 Dec | 31 Jan 2024 |
| Q4 | 1 Jan – 31 Mar | 31 May 2024 |
Types of TDS Return Forms
Different TDS forms are used based on the type of payment and the person receiving it. Here’s a quick breakdown:
| Form | Frequency | Used For |
|---|---|---|
| Form 24Q | Quarterly | TDS on salaries paid to employees |
| Form 26Q | Quarterly | TDS on all payments other than salaries |
| Form 27Q | Quarterly | TDS on interest, dividends, or other payments made to non-residents |
| Form 27EQ | Quarterly | Statement for Tax Collected at Source (TCS) |
What is a TDS Certificate?
Proof of TDS Deduction:
Proof of TDS Deduction: After tax is deducted, the deductor must issue a TDS certificate to the person receiving the payment. This certificate can be downloaded from TRACES, and includes a 7-digit unique number and a watermark for authenticity. It allows the deductee to verify that the tax was properly credited..
When and How It's Issued:
Quarterly for payments other than salary Annually for salary payments If the original certificate is lost, the deductee can request a duplicate copy from the deductor.
Penalty for Failure to File TDS Returns
Timely and accurate filing of TDS returns is essential to avoid heavy penalties, which can include daily fines and lump-sum charges for non-filing or wrong information.
Late Filing Penalty
If TDS returns are not filed before the due date, a penalty of ₹200 per day (as per Section 234E) is charged. This continues until the return is filed, though the total penalty cannot exceed the actual TDS amount.
Non-Filing or Wrong Filing Penalty
If TDS returns are not filed within 1 year or filed with incorrect details, an additional penalty of ₹10,000 to ₹1,00,000 may be imposed. This is separate from the daily late fee and ensures proper and timely tax reporting.
Before Submitting a Revised TDS Return
Check Original Return Status
You can only file a revised TDS return if your original return has been accepted by the TIN Central System. To check this status online, enter your PAN and Provisional Receipt/Token Number on the NSDL website.
2. Use Latest TDS Statement
The revised return must be prepared using the most recent consolidated TDS statement, which can be downloaded from the TRACES portal.
Claiming TDS Credit
To claim TDS credit, the deductee must correctly mention the TDS certificate number and related details while filing their income tax return.
Any mistakes in these details may cause mismatches or delays in processing the credit.
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Frequently Asked Questions…
What is TDS and why is it deducted?
TDS (Tax Deducted at Source) is a way for the government to collect tax directly when certain payments like salaries, rent, or contractor fees are made. A portion of the payment is deducted as tax and deposited with the Income Tax Department.
Who needs to file TDS returns?
Any person or organization that has a TAN and deducts TDS while making payments (such as salaries, interest, rent, commissions) must file quarterly TDS returns.
What is TAN and is it mandatory?
TAN (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric code required by anyone deducting or collecting tax on behalf of the government. It is mandatory for filing TDS returns.
What are the due dates for filing TDS returns?
TDS returns are filed quarterly:
Q1: 31st July
Q2: 31st October
Q3: 31st January
Q4: 31st May
Which forms are used for TDS return filing?
Form 24Q – For salaries
Form 26Q – For non-salary payments
Form 27Q – For payments to non-residents
Form 27EQ – For Tax Collected at Source (TCS)
What is a TDS certificate?
A TDS certificate (from TRACES) is proof that tax has been deducted and paid to the government. It contains a unique 7-digit number and watermark and must be given to the deductee for verification.
What happens if I file TDS returns late?
Late filing attracts a penalty of ₹200 per day until filed. If returns are not filed for more than a year or incorrect information is given, a penalty between ₹10,000 to ₹1,00,000 may apply.
Can I revise a TDS return after filing?
Yes, you can file a revised TDS return if the original return has been accepted by the TIN system. It must be prepared using the latest consolidated TDS statement from TRACES.
