Tax Deducted at Source or TDS is the advance tax paid by entities or specified individuals against payments of professional fees, interests, dividends, salary, royalty, and others, as per recommended tax slabs by the government. Individuals and entities making payments must deduct tax at source if the amount exceeds the limit set by the government.
The Income Tax Department of India decides the amount of TDS to be deducted, and it is the company that deducts the TDS that will make the payment and deposit the TDS amount to the government.
Who Are Eligible for TDS Return Filing?
Employers and organisations that have a valid TAN can file TDS returns. TDS should be filed for the following payments as stated under the Income Tax Act of India:
- Salary payment;
- Insurance commission;
- Any gains that have been acquired by winning lotteries, puzzles, and other similar games;
- Any income that has been generated by Income on Securities;
- Contractual Payments;
- Commission or brokerage payment; and
- Any other payments as notified by the government
A Checklist to Consider When Filing a TDS Return
When filing a TDS Return, here are some things to keep in mind:
- Form 27A must be correctly filled.
- The verification form, along with the e-TDS Return should be filed electronically.
- The amount paid and the TDS must be added correctly in all forms, including Form 27A, Form 24, Form 26, and Form 27.
- Make sure to include the Tax Deduction Account Number in Form 27A.
- Check if the particulars relating to the TDS deposit have been included.
- Include all the necessary details required by the government.
- E-TDS Returns should be filed in the recommended ASCII clean text format.
- Physical filing of TDS returns should be done at any TIN-FC office managed by NSDL. If filed online, it can be submitted via the NSDL website, and the deductor must sign the return through the DSC.
What Is the TDS Return Filing Process?
The TDS Return Filing process is easy and straightforward. However, to ensure that no issues arise in the process, it should contain all the necessary details, such as the total TDS amount deducted, the amount deposited by the deductor, challan information, and the TAN/PAN of the deductee and the deductor.
Here is the general TDS Return Filing process:
- First, Form 27A must be filled out accurately. In the event that the hard copy of the form is filled, it has to be verified together with the e-TDS return that has been electronically filed.
- Then the TDS and the total amount that has been paid should be correctly filled and entered in their respective forms.
- The TAN of the organisation filing the TDS return should be included on Form 27A.
- Also, the mode of payment, challan number, and other tax details should be included on the TDS returns. If any incorrect detail is found, there will be a mismatch in the filing process. Hence, the TDS returns may have to be filed again.
- It is important that the basic form used for e-TDS filing must be used. This is to retain consistency. The 7-digit BSR should also be included to make tallying easier.
- Any physical TDS return should be submitted at the TIN-FC. If returns are filed online, they can be submitted via the NSDL TIN official website. But with this method, a level 2 digital signature should be used by the deductor.
- If all information provided is correct, a provisional receipt will be sent to acknowledge that the TDS Returns have been filed. In case they are rejected, a non-acceptance memo will be issued. This means the TDS Returns must be filed once again.
Below is a step-by-step guide to do the TDS Return Filing online via the income tax website:
- Go to the Income Tax India Filing website and click the Login here button.
- Next, input your login details and hit the Login button. Usually, the taxpayer’s user ID is his TAN.
- Then click the Upload TDS link under the TDS section.
- A form will now appear on your screen. Input all the required details. Once done, press Validate.
- The returns can then be validated via these two options:
- Digital Signature Certificate – Upload the TDS zip file, and don’t forget to attach your digital signature file. Once done, click Upload. You will know the process is complete when you see a success message on your screen or a confirmation email is received on your registered email.
- Electronic Verification Code – If the previous validation method does not work, you can opt for this method instead. Upload the TDS zip file and click E-Verify. Then use an already-generated Electronic Verification Code. Enter it into the corresponding field and hit the Submit button.
The Benefits of TDS Return Filing
Below are some of the known benefits of TDS Return Filing:
- It helps people and entities from evading taxes. This is because it is easier for government agencies to track the TDS filed by these individuals and entities. If someone misses the due date of filing TDS, a penalty is imposed.
- It gives the government a steady source of revenue. The amount received from TDS Return Filing is used for the nation’s welfare.
- It widens the tax collection base for the government. Generally, the TDS is filed by the employer. And the employees will be given a certificate every time the TDS is filed. This means there are lesser chances of tax evasion in the country. Likewise, there will be more taxpayers in the country.
If you need more help with TDS Returns Filing, you can visit the NSDL website. But when in doubt, you can seek assistance from professionals.
