TDS Return Filing in India

Introduction

Tax Challan’ along with the payment. Besides depositing tax, as a Deductor, you must also file a TDS Return.
 

TDS refers to Tax Deducted at Source, a system introduced by the government to collect tax at the very point where income is generated. Under this mechanism, tax is required to be deducted while making certain specified payments such as salary, interest, commission, rent, professional fees, etc.

The person responsible for making the payment is known as the “deductor.” The deductor is required to deduct the applicable tax amount before releasing the payment to the recipient (deductee) and thereafter deposit the deducted tax with the government within the prescribed time limit. The payment of TDS is generally made by submitting the appropriate Income Tax Challan.

In addition to depositing the deducted tax, the deductor must also comply with return filing requirements under the Income Tax Act, 1961. Filing of TDS Return is mandatory and involves providing details of tax deducted, tax deposited, and particulars of deductees. This ensures proper reporting and credit of TDS to the concerned taxpayer’s account.

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    TDS Return Filing

    A TDS return is a quarterly compliance statement that must be submitted to the Income Tax Department by every person who deducts tax at source. Filing this return within the prescribed due dates is mandatory for all deductors, as it ensures that the tax deducted from payments is properly reported and credited to the respective deductees.

    While preparing and filing a TDS return, certain key details are required, including:

    • Permanent Account Number (PAN) of both the deductor and the deductee

    • Total amount of TDS deducted and deposited with the government

    • Details of the TDS challan through which the payment was made

    • Any additional prescribed information, if applicable

    Accurate reporting of these particulars is essential to avoid penalties and to ensure smooth processing of TDS credits.

     
     

    Types of TDS Return Forms

    Under the provisions of the Income Tax Act, 1961, different TDS return forms are prescribed depending on the nature of payment and the category of deductee. The commonly used TDS return forms are as follows:

    • Form 24Q
      This form is used for filing quarterly statements of TDS deducted on salary payments made to employees.

    • Form 26Q
      This return is applicable for reporting TDS deducted on payments other than salaries, such as interest, commission, professional fees, rent, and other specified payments made to residents.

    • Form 27Q
      This form is required when TDS is deducted on payments made to non-residents, including interest, dividends, and other sums payable to foreign individuals or entities.

    • Form 27EQ
      This statement is used for filing details of Tax Collected at Source (TCS), which is collected by the seller from the buyer at the time of sale of specified goods.

    Each form serves a specific purpose and must be filed within the prescribed quarterly due dates.

    Due Date for Payment of TDS Return Filing

    The due date for Payment of TDS deducted is seventh of the next month. For Example, TDS payment for April will be made on or before 7th may.

    Due Date for TDS Return Filing

    Under the provisions of the Income Tax Act, 1961, TDS returns are required to be filed on a quarterly basis within the prescribed time limits. The due dates for filing Form 27Q (applicable for payments made to non-residents) are generally as follows:

    Regular Due Dates

    QuarterPeriodDue Date for Filing Form 27Q
    Q11st April – 30th JuneOn or before 31st July
    Q21st July – 30th SeptemberOn or before 31st October
    Q31st October – 31st DecemberOn or before 31st January
    Q41st January – 31st MarchOn or before 31st May

    Updated Due Dates for F.Y. 2023–24

    For the Financial Year 2023–24, the revised deadlines for filing Form 27Q are as follows:

    QuarterPeriodUpdated Due Date
    Q11st April – 30th JuneOn or before 31st March 2024
    Q21st July – 30th SeptemberOn or before 31st March 2024
    Q31st October – 31st DecemberOn or before 31st January 2024
    Q41st January – 31st MarchOn or before 31st May 2024

    It is important for deductors to adhere to these timelines to avoid late filing fees and penalties.

    Failure to Furnish PAN

    Any individual who is entitled to receive a payment on which Tax Deducted at Source (TDS) is applicable must possess a valid Permanent Account Number (PAN) and provide the correct PAN to the deductor. It is the responsibility of the deductee to ensure that the PAN shared is accurate and active, so that the TDS deducted is properly credited to the respective income tax account.

    If a person fails to provide PAN or furnishes an incorrect PAN, the deductor is required to deduct tax at a higher rate of 20%, as per the provisions of the Income Tax Act, 1961. In addition, such non-compliance may attract a penalty of ₹10,000.

    Therefore, before submitting PAN details for TDS purposes, the deductee should verify the validity and active status of the PAN. This can be done through the “Know Your PAN” facility available on the official website of the Income Tax Department. If the PAN is found to be inactive, the concerned individual must approach the jurisdictional Assessing Officer to get the PAN reactivated before providing it to the deductor.

    TDS Certificate

    Whenever tax is deducted at source, the deductor is required to issue a TDS certificate to the deductee as proof of tax deduction and deposit. A valid TDS certificate is the one downloaded from the TRACES portal (TDS Reconciliation Analysis and Correction Enabling System) and contains a unique 7-digit certificate number along with the TRACES watermark. This certificate enables the deductee to verify the tax credit reflected in their account.

    It is important for the deductee to safely preserve all TDS certificates. Certificates for non-salary payments are generally issued on a quarterly basis, whereas TDS on salary (Form 16) is issued annually. In case the original certificate is misplaced, the deductee may request a duplicate copy from the deductor.

    Claiming TDS Credit

    To claim the benefit of TDS, the deductee must correctly report the TDS details in the income tax return filed under the Income Tax Act, 1961. Proper mention of the TDS certificate number and related details is essential to avoid mismatches during return processing. Any incorrect information may result in discrepancies and delay in granting tax credit.

    To simplify TDS return preparation, NSDL e-Governance introduced the e-TDS/TCS Return Preparation Utility (RPU), which is available free of cost.


    Prerequisites for Uploading TDS Return

    Before uploading a TDS return, the following conditions must be fulfilled:

    • Valid TAN registered on the e-filing portal

    • Use of Return Preparation Utility (RPU) and File Validation Utility (FVU)

    • Valid Digital Signature Certificate (DSC), if applicable

    • Bank account or PAN-Aadhaar linked details for EVC verification

    Step-by-Step Process for E-Filing TDS Return

    1. Register TAN on TRACES using token number and challan details of previously filed returns.

    2. Download RPU and FVU utilities from the TIN-NSDL website.

    3. Download the CIN (Challan Identification Number) file from the OLTAS portal for verification purposes.

    4. Open RPU, select the relevant form (such as 24Q, 26Q, 27Q, etc.), and choose “Regular” filing.

    5. Enter required deductor and deductee details.

    6. Create and save the file, selecting the previously downloaded CSI file.

    7. Validate the file and generate the required output.

    8. Open FVU and upload the generated .txt file for validation.

    9. Validate the file and correct errors, if any.

    10. Convert the validated .fvu file into a ZIP file.

    11. Log in to the e-filing portal using TAN, upload the ZIP file along with DSC or EVC, and submit.

    12. Track the status of the filed return on TRACES after a few days to confirm successful processing.

    Proper compliance with these procedures ensures accurate filing and smooth processing of TDS returns.

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