Tax Deducted at Source (TDS) RETURNS

Tax Deducted at Source (TDS)

Tax Deducted at Source (TDS) is a method of tax collection in India where the person responsible for making specified payments (such as salary, interest, commission, rent, etc.) deducts a certain percentage of tax before making the payment to the recipient. This deducted tax is then deposited with the Income Tax Department.

Types of TDS Returns

• Form 24Q - TDS on Salary payments.
• Form 26Q - TDS on payments other than salary (e.g., interest, dividend, commission, rent).
• Form 27Q - TDS on payments made to Non-Resident Indians (NRIs) and Foreign Companies.
• Form 26QB - TDS on sale of property.
• Form 26QC - TDS on rent exceeding ₹50,000 per month.

TDS Payment Deposit Due Dates

• For Non-Government Deductors:
  • For TDS Deducted in Months of April to February: Due Date: On or before the 7th day of the following month.
  • For TDS Deducted in the Month of March: Due Date: On or before April 30th.
• For Government Deductors:
  • If Payment is Made Without Challan: Due Date: On the same day of the deduction.
  • If Payment is Made with Challan: Due Date: On or before the 7th day of the following month.

Due Dates for Filing TDS Returns

Penalties for Late Filing or Non-Filing of TDS Returns

• Late Filing Fees (Section 234E): A fee of ₹200 per day is levied for each day the TDS return is delayed. However, the total fee cannot exceed the total amount of TDS deducted.
• Penalty for Non-Filing or Incorrect Filing (Section 271H): The Assessing Officer may levy a penalty ranging from ₹10,000 to ₹1,00,000 for failure to file the TDS return or filing incorrect information.
• Interest on Late Payment (Section 201(1A)):
  • Interest at 1% per month or part of a month is charged from the date the tax was deductible to the actual date of deduction.
  • Interest at 1.5% per month or part of a month is charged from the date of deduction to the date of payment.
• Prosecution: In extreme cases of willful default, the deductor may face prosecution under Section 276B, which could result in imprisonment ranging from 3 months to 7 years.

Correction of TDS Returns

If any errors are identified after filing, the deductor can file a revised TDS return. Corrections should be made as soon as possible to avoid penalties and interest.

Issuance of TDS Certificates

After filing the TDS return, the deductor must issue TDS certificates to the deductees:

• Form 16: Issued for TDS on salary.
• Form 16A: Issued for TDS on payments other than salary.
• Form 16B: Issued for TDS on the sale of property.
• Form 16C: Issued for TDS on rent.

These certificates must be issued within the specified time frame after filing the TDS returns.

By adhering to the due dates and ensuring accurate filing, deductors can avoid penalties and ensure smooth compliance with the TDS provisions under the Income Tax Act, 1961.