TDS Return Filing


The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

Rates for deduct of tax at source

Taxes shall be deducted at the rates specified in the relevant provisions of the Act or the First Schedule to the Finance Act. However, in case of payment to non-resident persons, the withholding tax rates specified under the Double Taxation Avoidance Agreements shall also be considered

Tax deducted or collected at source shall be deposited to the credit of the Central Government by following modes:

1) Electronic mode: E-Payment is mandatory for

a) All corporate assesses; and

b) All assesses (other than company) to whom provisions of Section 44AB of the Income Tax Act, 1961 are applicable.

2) Physical Mode: By furnishing the Challan 281 in the authorized bank branch


Where tax is deducted/collected by government office, it can remit tax to the Central Government without production of income-tax challan. In such case, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called to whom the deductor reports the tax so deducted and who is responsible for crediting such sum to the credit of the Central Government, shall submit a statement in Form No. NSDL with prescribed time-limit.

Key Points on TDS
 Payment of TDS deducted

The due date for deposit of TDS deducted from parties is 7th of next month. The TDS payment can be made through online banking, by cheque or cash by presenting the challan at designated banks. The challan contains date of deposit, BSR Code of the collecting banker, Serial Number of transaction and the amount deposited. The challan also mentions the section under which the TDS is being deducted and the assessment year for which the TDS is being deposited.

Filing of TDS Return

Every deductor who have been applied a TAN number shall file quarterly return of TDS. In case there is NIL deduction then a declaration need to be filed. The deductors shall obtain pan number of deductee and file the TDS Return clearly specifying the amount which was deducted against a particular PAN Number. The TDS return is a quarterly exercise and is of two type, viz one for deductions while making payment of Salary. while other is for all other cases.

Consequence of Non Compliance

The Non Compliance of TDS provisions is a very serious offence and is punishable under section 271 (c ) of the Income Tax Act 1962, where minimum penalty is 10,000 which can go up to Rs. 1,00,000/-. Section 276B applies to all cases where willful default is established and the punishment is severe in nature, its minimum 3 Years rigorous imprisonment which can go upto 7 years. However, if sufficient cause is shown to the satisfaction of commissioner of Income Tax the penalty can be waived.

Interest on Non Deduction of TDS

A deductor while making payment for which he ought to have deducted TDS fails in deducting TDS or deducts an amount less than the required amount. In all such cases the deductor is liable to pay an interest @ 1% per month or part of the month, till the date on which TDS is deducted. Hence, a businessman must be very careful while making payment to parties and ensure that TDS is being deducted from all such payments at the prescribed rates.

Interest on NON Payment of TDS

The TDS deducted while making payment or otherwise shall be deposited before 7th day of succeeding month. any failure on deposit of TDS is a serious offence and the business man not only punishable under section 271 C or / and Section 276B he is also liable to pay interest on delayed payment at the rate of 1.5% per month or part thereof. There is no provision in law where the interest can be waived, hence the assesse should be very careful.

Other Consequences of Default on TDS

The expenses on which TDS was supposed to be deducted shall be disallowed as an expense under section 40(a) while computing the taxable income. Each deductor is required to obtain a TAN number which need to be quoted on all TDS payment Challans, on Form 16 /16 A. The late filing of TDS Return attracts a penalty of Rs. 200 per day till the day default continues. The punishment can be upto Rs. 100,000/- In case the return is filed beyond 1 years from the due date.

Key Differences Between TDS and TCS

The difference between TDS and TCS can be drawn clearly on the following grounds:

TDS Return

TDS return is a quarterly statement to be given to the I-T department. It is compulsory for deductors to submit a TDS return on time. The details required to file TDS returns are:

Eligibility Criteria for TDS Return

TDS return can be filed by employers or organizations who avail a valid Tax Collection and Deduction Account Number (TAN). Any person making specified payments mentioned under the I-T Act are required to deduct tax at source and needs to deposit within the stipulated time for the following payments :

TDS Return Filing
Due dates of TDS Return :
Quarter Quarter Period TDS Returns Due Date
1st Quarter 1st April to 30th June 31st August 
2nd Quarter 1st July to 30th September 31st October 
3rd Quarter 1st October to 31st December 31st January 
4th Quarter 1st January to 31st March 31st May 
TDS Return Forms
Particulars Forms
TDS on Salary Form 24Q
TDS where deductee is a non-resident, foreign company Form 27Q
TDS on payment for transfer of immovable property Form 26QB
TDS in any other case Form 26Q

Various forms are used for filing TDS return, depending on the purpose of deduction. These returns have to be in company with a signed verification in Form No. 27A. It is a form that controls the quarterly statements. This has to be filed by deductors together with quarterly statements. It summarizes the control totals of “amount paid” and “income tax deducted at source” which has to match with the totals in TDS return.

TDS Return Submission

An assesses is liable to file e-TDS return if TDS is deducted from his/her income. It is obligatory to file TDS return within the due date mentioned above. In case an assesses does not file the return within the prescribed time, he will be liable to pay a penalty. Following are the assesses liable to file quarterly TDS return electronically:(a) People whose accounts are Audited u/s44AB
(b) People holding an office under the Government
(c) Company

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