Income Tax-TDS Return Filing

Overview

A TDS Return is a form that people need to fill out and submit to the government if they've had some of their income taxed before they received it. You have to do this within a certain time and provide information about the tax deduction, who took the tax, and who received the money.

What is TDS Return Filing?

A TDS return is like a report that shows all the tax-related activities that happened in three months. It mainly includes information about the tax money collected and given to the tax authorities by the person or company who collected it. The important things in a TDS return are:

• The unique identification numbers of the person or company who collected the tax and the one who paid it.
• Details about how much tax was collected.
• Information about the payment made, like the transaction details.

Benefit

• Filing a TDS return helps the government make sure that people and organizations don't avoid paying taxes. The government keeps a record of these returns, and if someone doesn't file on time, they can be fined.
• When people or companies file TDS returns every month, it gives the government a steady income. This system helps the government keep track of who is consistently paying their taxes.
• Filing TDS returns also makes it harder for people to avoid paying taxes because the employer deducts the tax from the payment and provides a certificate to the employee. This increases the number of people who pay taxes in the country.
• The agencies responsible for collecting taxes need to monitor everyone who should be paying taxes. TDS return filing makes it easier for both the tax agencies and the deductor, as the tax is taken out at the time of payment. This means the person receiving the money doesn't have to file taxes separately.

Who Can File TDS Returns?

People and organizations that have a valid TAN (Tax Deduction and Collection Account Number) can file TDS returns. Also, individuals whose financial records are audited under Section 44AB and who work for the government or companies must file TDS returns online every three months.

This means that the deductor can be various entities like individuals, groups of people, Hindu Undivided Families (HUFs), limited companies, local authorities, groups of people, or partnership firms, among others.

According to the Income Tax Act, TDS is filed for the following types of payments:

• Salary income
• Income from securities
• Commission earned from insurance
• Payments related to National Savings Certificates (NSC)
• Winnings from horse races
• Winnings from lotteries, puzzles, and similar sources.

Tax & Process

Documents Required

TDS Acknowledgement

PAN Card Information: Details about the individual's PAN card.

TDS Certificate: If someone else has deducted TDS.

Procedure

Step 1: Fill out Form 27A, which has multiple columns. If you're using a hard copy of the form, make sure to verify it along with the electronically filed E-TDS return.

Step 2: Accurately record the amount of tax deducted at the source and the total payment made.

Step 3: Mention the TAN (Tax Deduction and Collection Account Number) of the organizations on Form 27A. Using an incorrect TAN can cause verification issues.

Step 4: When filing TDS returns, provide the correct challan number, payment mode, and tax details. Incorrect details can lead to discrepancies, and you may need to refile the TDS returns.

Step 5: Use the standard form for e-TDS filing to maintain consistency. Enter the 7-digit BSR (Basic Statistical Return) for easier reconciliation.

Step 6: Submit physical TDS returns at the TIN FC (Tax Information Network Facilitation Center) managed by NSDL. For online filing, use the official NSDL TIN website.

Step 7: If all the information is correct, you will receive a token number or provisional receipt as proof of filing the TDS return.

Step 8: If your TDS return is rejected, you will receive a non-acceptance memo with the reasons for rejection, and you'll need to refile the returns accordingly.

FAQ's