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TDS Return

TAN Number is a 10 Digit Alphanumeric Number and is used as an abbreviation for Tax Deduction and Collection Account Number. Every Assessee liable to deduct tax at source (TDS) or required to collect tax at source (TCS) is required to apply for a TAN No. and shall quote this number in all TDS Returns TDS Payments and any other communication regarding TDS with the Income Tax Department.

As per Section 203A of the Income Tax Act 1961, it is mandatory for all assessee’s liable to deduct TDS to quote this TAN Number in all communications regarding TDS with the Income Tax Department, and failure to do so attracts a penalty of Rs 10,000 u/s 272BB.

Structure of TAN: of the total 10 digit TAN number, the first 4 digits of TAN are alphabets, the next 5 digits of TAN are numeric and the last digit is a random alphabet.

The First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial name of the TAN holder who can be a company, firm, individual, etc. For example, TAN allotted to Mr. Mahesh of Delhi may appear as under DEL M 12345 L

 Tds Rate chart applicable for Financial Year 2020-21

S.noSectionNature of IncomeAmount over which TDS to be deductedRate of TDS
If PAN is availableIf PAN is not available
1192Salaryto be seen as per slabAverage Rate30%
2192APayment of accumulated balance due of Employees’ Provident Fundif the accumulated balance is more than 5000010%42.744%
3193Interest on securities10,00010%20%
4194Dividend other than 115-O2,50010%20%

 

5

 

194A

Interest other than interest on securities
– Interest received from Bank40,00010%20%
– Interest received from others5,000
6194BIncome by way of winnings from lotteries Puzzles10,00030%
7194BBIncome by way of winnings horse race10,00030%30%
8194CPayment to contractors/ Subcontractors30000 one time

individual/HUF 1%

Others 2%

20%
100000 in the whole year
9194DInsurance Commission15,000

Other than company 5%

Company 10%

20%
10194DApayment under Life Insurance Policy100,0005%20%
11194EPayment to NR Sports PersonNo Limit20%20%
12194EEPayment from National Savings Scheme2,50010%20%
13194FPayments on account of repurchase of units by Mutual FundNo Limit20%
14194GCommission on sale of lottery tickets15,0005%20%
15194HPayment of Commission or Brokerage15,0005%20%

 

16

 

194-I

Payment of rent
– For Land, building, or furniture.2,40,00010%20%
– For plant and machinery or equipment2%
17194 IAPayment on transfer of certain immovable property other than agricultural land5,000,0001%20%
18194 IBPayment of rent by individual/HUF other than those covered under 44AB50000 p.m5%20%
19194 iCPayment of Consideration (not being in kind) under Joint Development AgreementNo Limit10%20%

 

20

 

194J

Fees for professional or technical services
– Normally in all cases

 

30,000

10%

 

20%

– person engaged only in the business of operation of the call center (w.e.f 01/06/2017)2%
21194LAPayment of compensation on acquisition of certain immovable property250,00010%20%
22194LBIncome by way of interest from infrastructure debt fund to a non-resident or Foreign Co.No Limit5%20%

 

23

 

194LBA

Certain income from units of a business trust
– Payment to residentNo Limit10%20%
– Payment to Non-resident5%20%

 

24

 

194LBB

Income in respect of units of investment fund
– Payment to residentNo Limit10%20%
– Payment to Non-resident30%
25194LCIncome by way of interest from an Indian companyNo Limit5%20%
26194LDIncome by way of interest on certain bonds and Government securitiesNo Limit5%20%

Form 24Q            Statement for tax deducted at source from salaries

Form 26Q            Statement for tax deducted at source on all payments other than salaries.

Form 27Q            Statement for a tax deduction on income received from interest, dividends, or any other sum payable to non-residents.

Form 27EQ          Statement of collection of tax at source.

TDS Applicability

 

TDS is treated as tax paid in advance as tax is paid in advance to the government. These payments are specified by the Income Tax act like salary, payment, interest on securities, contract money paid, dividends paid, etc. Who deducts the TDS from the payee is called the deductor and whose tax is deducted that is called deductee. The deductor is liable to deduct TDS and also deposit to the government on behalf of the other person [deductee].

Some of the following persons are the specified ones who are liable to deduct TDS.

An Individual or a H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession activity where accounts are required to be audited u/s 44AB, in the immediately preceding financial year.

All the companies and Partnership firms are liable to deduct TDS.

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All about TDS Return

A person who is earning income has to pay income tax or advance tax on a self-assessment basis.

However, in certain situations, the person making prescribed payments is required to deduct tax from such payments (at prescribed rates) and deposit the tax so deducted with the Government. Such a form of tax deduction is called Tax Deduction at Source (TDS). The person who deducts the tax is called ‘deductor’ and the person whose tax is deducted is called ‘deductee’.

TCS is Tax Collected at Source in which seller collects the tax from buyers at the time of selling some prescribed goods. The person who collects the tax is called ‘collector’ and the person whose tax is collected is called ‘collected.

A seller collects the tax from buyers at the time of selling some prescribed goods. The person who collects the tax is called ‘collector’ and the person whose tax is collected is called ‘collected.

Every Person Deducting/Collecting tax at the source is required to obtain a unique number called Tax Deduction Account Number (TAN). The Number has to be quoted to the deductor/collector in every correspondence related to TDS/TCS. TAN is not mandatory in case of Tax Deduction Made on the sale of immovable property.

1. Who is Liable to Deduct Tax at Source (TDS):

TDS is treated as tax paid in advance as it is paid in advance to the government. These payments are specified by the act like salary payment, interest on securities, contract payment, dividends, etc. Who deducts the TDS of the payee is called the deductor and whose tax is deducted is called deductee. The following persons are liable to deduct TDS and deposit to the government on behalf of the deductee.

Some of the following are the specified person who is liable to deduct TDS.

An Individual or a H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession where accounts are required to be audited u/s 44AB, in the immediately preceding financial year.

All the companies and Partnership firms are liable to deduct TDS.

2. Due date of deposit of TDS/TCS To The Government?

Time of payment or creditDue date of payment of TDS
When the income or amount liable to TDS is credited or paid during any month other than MarchThe tax shall be deposited on or before 7 days from the end of the month in which the deduction is made.
When the income or amount liable to TDS is credited or paid during MarchThe tax shall be deposited on or before 30″ April.

3. Annual compliance of issue of TDS/TCS certificate 

ParticularsForm No.Frequency of Certificate
TDS certificate in respect of tax deducted on salaryForm No. 16Annually
TDS certificate in respect of tax deducted on payments other than salaryForm No. 16AQuarterly
TCS certificateForm No. 27DQuarterly

4. What Is The Frequency And Due Date Of Statement Of Tds/TCS?

TDS Due Date of F.Y 2021-22 (The assessment Year 2022-23) for Return Filling:

QuarterPeriodLast Date of Filling
1st Quarter1st April to 30th June31st July 2019
2nd Quarter1st July to 30th September31st Oct 2019
3rd Quarter1st October to 31st December31st Jan 2020
4th Quarter1st January to 31st March31st May 2020

TDS Due Date of F.Y 2021-22 (The assessment Year 2022-23) for Return Filling:

QuarterPeriodLast Date of Filling
1st Quarter1st April to 30th June15th July 2019
2nd Quarter1st July to 30th September15th Oct 2019
3rd Quarter1st October to 31st December15th Jan 2020
4th Quarter1st January to 31st March15th May 2020

The seller contractor i.e. Deductor has to file a quarterly return in form 27EQ and Form 27A and has to issue the TCS certificate to Deductee in Form 27D on or before the following Due Date:

Due Dates for issuing TCS Certificate F.Y 2021-22 (The assessment Year 2022-21)

QuarterPeriodLast Date of Filling
1st Quarter1st April to 30th June30th July 2019
2nd Quarter1st July to 30th September30th Oct 2019
3rd Quarter1st October to 31st December30th Jan 2020
4th Quarter1st January to 31st March30th May 2020

5.   Consequences of non-compliance of TDS/TCS

Failure to deduct tax or short deduction of tax or failure/delay in payment of the tax deducted to the credit of Government by the due date, would make the deductor an assessee in default in respect of such tax and also liable to a penalty which is equal to the amount for which the assessee is a deemed defaulter.

In case of non-deduction/short deduction or delay in deduction of tax, interest @ 1% per month or part of the month is levied on the fix deductible amount, and in case of delay in payment of tax after deducting, interest @ 1.5% per month or part of the month, till such time the tax deducted is not credited to the Government shall also be payable.

In case of delay in payment of tax after collecting, interest @1% per month or part of the month till such time the tax is not paid.

Failure on part of the deductor to pay the tax deducted at source, to the credit of Central Government makes him liable to rigorous imprisonment of a minimum period of three months but which may extend to seven years.

Late Filing Fee

Under Section 234E, you will have to pay a fine of Rs 200 per day (two hundred) until your return is filed. You have to pay this for every day of delay until the fine amount is equal to the amount you are supposed to pay as TDS.

6. What Is The Duty Of Deductor/Collector If The Deductee Does Not Furnish His Pan?

If the deductee does not furnish PAN or furnishes incorrect PAN to the deductor/collector, the deductor/collector shall deduct tax at source at higher of the following rates:

(a) the rate prescribed in the Act; or

(b) at the rate in force, i.e. the rate mentioned in the Finance Act; or

(c) at the rate of 20%.

7. Tds Rate chart applicable for Financial Year 2021-22

S.noSectionNature of IncomeAmount over which TDS to be deductedRate of TDS
If PAN is availableIf PAN is not available
1192Salaryto be seen as per slabAverage Rate30%
2192APayment of accumulated balance due of Employees’ Provident Fundif the accumulated balance is more than 5000010%42.744%
3193Interest on securities10,00010%20%
4194Dividend other than 115-O2,50010%20%

 

5

 

194A

Interest other than interest on securities
– Interest received from Bank40,00010%20%
– Interest received from others5,000
6194BIncome by way of winnings from lotteries Puzzles10,00030%
7194BBIncome by way of winnings horse race10,00030%30%
8194CPayment to contractors/ Subcontractors30000 one time

individual/HUF 1%

Others 2%

20%
100000 in the whole year
9194DInsurance Commission15,000

Other than company 5%

Company 10%

20%
10194DApayment under Life Insurance Policy100,0005%20%
11194EPayment to NR Sports PersonNo Limit20%20%
12194EEPayment from National Savings Scheme2,50010%20%
13194FPayments on account of repurchase of units by Mutual FundNo Limit20%
14194GCommission on sale of lottery tickets15,0005%20%
15194HPayment of Commission or Brokerage15,0005%20%

 

16

 

194-I

Payment of rent
– For Land, building, or furniture.2,40,00010%20%
– For plant and machinery or equipment2%
17194 IAPayment on transfer of certain immovable property other than agricultural land5,000,0001%20%
18194 IBPayment of rent by individual/HUF other than those covered under 44AB50000 p.m5%20%
19194 iCPayment of Consideration (not being in kind) under Joint Development AgreementNo Limit10%20%

 

20

 

194J

Fees for professional or technical services
– Normally in all cases

 

30,000

10%

 

20%

– person engaged only in the business of operation of the call center (w.e.f 01/06/2017)2%
21194LAPayment of compensation on acquisition of certain immovable property250,00010%20%
22194LBIncome by way of interest from infrastructure debt fund to a non-resident or Foreign Co.No Limit5%20%

 

23

 

194LBA

Certain income from units of a business trust
– Payment to residentNo Limit10%20%
– Payment to Non-resident5%20%

 

24

 

194LBB

Income in respect of units of investment fund
– Payment to residentNo Limit10%20%
– Payment to Non-resident30%
25194LCIncome by way of interest from an Indian companyNo Limit5%20%
26194LDIncome by way of interest on certain bonds and Government securitiesNo Limit5%20%

Basic

INR 5999/-

Quarterly Fee, Upto 20 Deductee.

  • TDS  Registration
  • TDS Return, 24Q, 26Q,
  • Assistance in Monthly TDS deposit

Service Provide Before due date

Standard

INR 7,999/-

Quarterly Fee upto 20 Deductee

  • TDS registration
  • TDS Return
  • Assistance in monthly TDS deposit
  • Monthly TDS Consultancy

Service Provide Within 15 Days

Premium

INR 29,999/-

Yearly Fee, No Limit of Deductee

  • Yearly TDS Compliances
  • TDS Return Quarterly
  • TDS Consultancy
  • TDS Scrutiny assessments

Services Provided Before the Due Date

Frequently Asked Questions

TDS/TCS returns filed in electronic form as per section 200(3)/206C, as amended by Finance Act, 2005, are quarterly TDS/TCS statements. As per the Income Tax Act, these quarterly statements are required to be furnished from FY 2005-06 onwards. The forms used for quarterly e-TDS statements are Form Nos. 24Q, 26Q, and 27Q, and for the quarterly e-TCS statement in Form No. 27EQ. These statements filed in CD/Pen Drive should be accompanied by a signed verification in Form No. 27A in case of both e-TDS/TCS statements.

As per Income Tax Act, 1961, all corporate and government deduct/ collectors are compulsorily required to file their TDS/TCS returns on electronic media (i.e. e-TDS/TCS returns). However, deduct/collectors other than corporate/government can file either in physical or in electronic form.

An e-TDS return should be filed under Section 206 of the Income Tax Act in accordance with the scheme dated August 26, 2003, for electronic filing of TDS return notified by the Central Board of Direct Taxes (CBDT) for this purpose. CBDT Circular No. 8 dated September 19, 2003, may also be referred.

An e-TCS return should be filed under Section 206C of the Income Tax Act in accordance with the scheme dated March 30, 2005, for electronic filing of TCS return notified by the CBDT for this purpose.

As per section 200(3)/206C, as amended by Finance Act 2005, deductors/ collectors are required to file quarterly TDS/TCS statements from FY 2005- 06 onwards.

CBDT has appointed the Director-General of Income Tax (Systems) as e-Filing Administrator for the purpose of electronic filing of TDS/TCS returns

CBDT has appointed National Securities Depository Limited, (NSDL), Mumbai, as e-TDS/TCS Intermediary. NSDL has established TIN Facilitation Centers (TIN-FCs) across the country to facilitate deduct/ collectors file their e-TDS/TCS returns

Return Preparation Utility (RPU) version 2.8 is to be used for the preparation of e-TDS/TCS regular and correction statements pertains to Financial Year 2007-08 onwards.

To download the RPU, please visit the link https://www.tin-nsdl.com/downloads/e-tds/eTDS-download-regular.htmlL

NSDL has made available a freely downloadable return preparation utility for the preparation of e-TDS/TCS returns. Additionally, you can develop your own software for this purpose or you may acquire software from various third-party vendors. A list of vendors, who have informed NSDL that they have developed software for preparing e-TDS/TCS returns, is available on the NSDL-TIN website

Administrator e-TDS/TCS return has to be prepared in the data format issued by e-Filing. This is available on the Income Tax Department website (www.incometaxindia.gov.in) and NSDL e-Gov-TIN website (www.tin-nsdl.com). There is a validation software (File Validation Utility) available along with the data structure which should be used to validate the data structure of the e-TDS/TCS return prepared. The e-TDS/TCS return should have the following features:

  • E-TDS /TCS return file should be furnished in a CD/Pen Drive. It should not span across multiple computer media.
  • Each e-TDS/TCS return file should be accompanied by a duly filled and signed (by an authorized signatory) Form No. 27A in physical form. With effect from February 1, 2014, it is mandatory to submit Form 27A generated by TDS/TCS FVU (File Validation Utility).
  • If an e-TDS return file is required to be compressed, it should be compressed using Winzip 8.1 or ZipItfast 3.0 compression utility (or higher version thereof) to ensure quick and smooth acceptance of the file.
  • There should not be any overwriting
  • /striking on Form No. 27A.
  • No bank challan or copy of the TDS/TCS certificate should be filed along with e-TDS/TCS return file
  • CD/Pen Drive should be virus-free.

In case any of these requirements are not met, the e-TDS/TCS return will not be accepted at TIN-FCs.