What is TDS and when it is required to file TDS return?

TDS stands for Tax Deducted at Source. It is a type of indirect form of advance tax which is deducted from the earnings of Individual or organization prior to the amount is credited in account. Through imposing tax on the income of individual/ organization, our government generates revenue.

Rules & regulations regarding TDS are governed by the provisions of Income Tax Act, 1961. It is applicable on the income earned regularly or occasionally. It is not only limited to salary but also applicable on commission, interest, professional fees etc.  As it is payable on the earnings of individual or organization therefore tax liability arise only in case when earnings takes place.  TDS deduction takes place at the time when cash, cheque or credit payment is made to the payee account. TDS is payable as certain percentage of overall amount.

Advantages of TDS imposition

There are numerous advantages of TDS return filing. Some of them are as follows:

·         It prevents tax evasion.

·         Duly collection of tax and in timely manner.

·         Numerous people come under the tax bracket due to TDS.

·         For the government of India, TDS collection is a steady process.

TDS Return Filing

TDS return is a detail of TDS transactions made during the quarter. It is a quarterly statement which is required to be submitted with the Income tax department by the deductor. TDS return statement consist the PAN details of deductor and deductee along with the details of tax payment made to the government as well as information of TDS challan. It is mandatory for deductors to file TDS return.

TDS return filing due dates

Following are the TDS return filing due dates:

·         For the 1^st quarter (1^st April to 30^th June) – 31^st July

·         For the 2^nd quarter (1^st July to 30^th September) – 31^st October

·         For the 3^rd quarter (1^st October to 31^st December) – 31^st January

·         For the 4^th quarter (1^st January to 31^st March) – 31^st May

Provisions regarding late TDS Return Filing

As per the income tax provisions, late filing may attract penalty. There are penalty provisions regarding late filing of TDS return or when TDS return is not filed within the stipulated time as mentioned above. Fine penalty is imposed till the payment of TDS.

TDS Return Filing Forms

There are various types of TDS return filing forms and it depends upon the eligibility criteria. Every deductor has to pay the tax liability within the stipulated time and in prescribed forms.

Following are the types of TDS return filing forms on the basis of nature of income on which tax is deducted.  

1.      Form24Q- This is for TDS deduction on salary as per section 192 of the Income Tax Act, 1962.

2.      Form 26Q- This is in case payments received other than salary as per section 193 and 194 of the Income Tax Act, 1961.

3.      Form 27Q- This is in case payment made to NRIs and foreigners other than salary as per section 200(3) of the Income Tax Act, 1961.

4.      Form 27EQ- This form shows the Tax Collected at Source (TCS) by the seller as per section 206C of the Income tax Act, 1961.

Forms are required to be furnished by the deductors with the Income tax Authority in due time.