Mandatory procedure of TDS, made simple for you.
It is the duty of the person who is making payment to someone for specified goods or services to deduct TDS and file TDS return. The specified payment includes salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. The person who deducts TDS is called deductor and the person whose tax is being deducted is called deductee. TDS is not required to be deducted by Individuals and HUF.
Yes. It is mandatory for deductors and employees to submit their PAN as well.
While paying TDS, e – payment is the compulsory process.
Following are the basic duties of any individual who is liable to deduct tax at source.
• He shall obtain Tax Deduction Account Number and quote the same in all the documents pertaining to TDS.
• He shall deduct the tax at source at the applicable rate.
• He shall pay the tax deducted by him at the source to the credit of the Government (by the due date specified in this regard*).
• He shall file the periodic TDS statements, i.e., TDS return (by the due date specified in this regard*).
• He shall issue the TDS certificate to the payee in respect of tax deducted by him (by the due date specified in this regard*). *Refer tax calendar for the due dates.
TAN is an alphanumeric 10-digit number required by a person who is liable to deduct TDS and file TDS return. Thus such a person must make an application within a month of deducting TDS for allotment of Tax Deduction and Collection Number (TAN) in Form 49B. This number allotted is mandatory to mention in all TDS Certificates issued, returns, challans etc. If a person fails to apply for TAN he may be penalized up to Rs. 10,000/-.
PAN of the deductor has to be given by non-Government deductors. It is essential to quote PAN of all deductees.
Payment can be done using net banking online on NSDL by selecting Challan 281. The TDS payments should be made before filing the TDS return. e-payment is compulsory for all Corporate assesses and non-corporate assessees who are liable for audit u/s 44AB. Physical payment can be made using Challan 281 in an authorized bank branch.
It is a document which serves as an annexure to the intimation to be sent to the deductor. Intimation will be sent to the deductor through mail/post but a justification report will have to be downloaded from the portal.
To view Refund/ Demand Status, follow the below steps:
– Login to e-Filing website with the user ID, password, date of birth/date of incorporation and captcha.
– Go to “My Account” and click on “Refund/Demand Status”.
– Below details would be displayed.
Assessment Year, Status, and Reason (for refund failure, if any):
– Login to e-Filing website with the User ID, Password, Date of Birth / Date of Incorporation and Captcha
– Go to My Account and click on “Refund/Demand Status”.
Below details would be displayed. Assessment Year. Status. Reason (for refund failure, if any)
For any person who has TDS reduction in their pay, TDS return can be filed online. Return preparation has to be done within the prescribed time frame because for individuals who are deemed as a regular defaulter in India, a grave penalty can be charged. Therefore submitting e-TDS Return in the prescribed time is essential.
For the deductor, it is vital to deposit the subtracted TDS to the concerned government department along with the details.
The time period within which the deductor should deposit the amount and the deductee has to file for TDS refund are given below. It is important to stick to the schedule to avoid incurring a penalty.
For online TDS return, every single person who has made the TDS deduction should file the TDS return without fail. The deductor should make the quarterly submissions at the Income Tax department. There are different types of forms available in accordance with the change in the intent of the TDS deductions made. The PAN details of both the deductees and the deductor should be added in the statement. The statement should also contain information about TDS challan and the tax details among other important details.
In online TDS return, the statement/ TDS return is defined as the summary of every transaction made in relation to the quarterly TDS payments. This statement should be submitted by the deductor to the department of income tax.
For all deductors, the submission of TDS return is mandatory. It contains the details of TDS deductions and deposits made by the deductor. It should also contain PAN card details of both deductees and deductor, tax paid particulars, information about TDS challan and any other extra information the form demands.
In the case of online TDS return, if there are any errors committed due to incorrect challan details, incorrect PAN details or lack of PAN card details, the amount which is credited as the tax will not be reflected in the Form 16A/Form16/Form 26AS. In such cases a revised TDS return must be filed.
To file a revised TDS return, you need two files – consolidated file containing the details of the deductions made in the quarter; and the one is the justification report containing the information on the errors filed in the return.
While filing online TDS returns, if you pay in excess than the actual tax amount payable, you will be eligible to claim TDS refund.
The time within which the refund is done depends on whether you have made the income tax return filing before or after the due date. In case the returns were filed on time, then you will receive the refund of the excess amount within 3-6 months.
In online TDS return, if there is a case of late filing or failure to file the returns, the individual or the company will have to face two types of penalties:
A TDS return has a time frame same as a tax payment. Though the return can be filed online, there is a due date for each quarterly submission. To ensure you are ahead of the deadline, Vakilsearch’s Google Calendar has predefined compliance dates marked for every month. You will be receive a notification of the approaching due date well in advance and never incur a penalty for missing it.