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INDEX

  • Eligibility for TDS Return Filing

  • Rate of TDS Deduction

  • TDS Return Forms

  • Due Dates for Filing TDS Returns

  • How to Download TDS Return Forms

  • How to Verify TDS Returns

  • Requirements for Uploading TDS Returns

  • What is a Revised TDS Return?

  • How to Correct Errors in TDS Returns

TDS Return

Eligibility for TDS Return Filing

Employers and organizations with a valid Tax Deduction and Collection Account Number (TAN) are eligible to file TDS (Tax Deducted at Source) returns. Individuals whose accounts are audited under Section 44AB of the Income Tax Act, and those holding office under the government or in companies, are required to file TDS returns online every quarter.

The deductor (the person responsible for deducting TDS) can be:

  • An individual
  • A Hindu Undivided Family (HUF)
  • A group of individuals
  • A limited company
  • A partnership firm
  • A local authority
  • An association of individuals (AOI)

Types of Payments for Which TDS Is Filed:

TDS is applicable on the following types of payments:

  • Salary income
  • Income from securities
  • Insurance commissions
  • Pay-outs towards National Savings Certificates (NSC)
  • Winnings from horse races
  • Winnings from lotteries, puzzles, etc.

These are some of the common scenarios where TDS deductions apply, and the relevant entities are obligated to file TDS returns accordingly.

Rate of TDS Deduction

TDS (Tax Deducted at Source) is applicable to various types of income such as salaries, professional fees, commissions, rent, interest earned, and more. The rate at which TDS is deducted depends on the nature of the income and the total amount earned.

In simple terms, the TDS rate varies based on the type of income. It is important to note that tax is applied only to the amount exceeding the maximum threshold limit, if applicable.

Key Points:

  • TDS rates range between 1% and 30% depending on the type of income and the individual’s total earnings.
  • The exact rate is determined by the Income Tax Act and can differ for different categories of taxpayers and income sources.
  • TDS is typically deducted on income exceeding a prescribed threshold, and the rate of deduction depends on the specific income source.

Examples of common TDS rates:

  • Salaries: TDS is based on income tax slabs for individuals.
  • Professional fees/commission: Usually deducted at 10%.
  • Interest earned: Typically 10% for interest from banks, provided PAN is available; otherwise, it can be 20%.
  • Rent: TDS on rent paid for land or building is generally 10%.

The rates may vary based on specific circumstances, such as NRI status, senior citizens, or individual tax slabs. Always refer to the latest income tax provisions for the most accurate rate.

TDS Return Forms

The following table provides a summary of different TDS return forms and their respective purposes:

S.No.

Type of Form

Purpose

1

24Q

Statement of tax deducted at source on salaries.

2

26Q

Statement of tax deducted at source on non-salaried income.

3

26QB

Statement of tax deducted against the payment for immovable property.

4

27Q

Certificate of tax deducted at source on interest, dividends payable to NRIs and foreign companies.

5

27EQ

Statement of Tax Collected at Source (TCS).

Each form serves a specific purpose, depending on the nature of income or transaction. It is essential for businesses and individuals to file the correct form based on the type of income and TDS or TCS involved.

Due Dates for Filing TDS Returns

The due dates for filing TDS returns are as follows:

Quarter

Due Date

Quarter 1

31st July

Quarter 2

31st October

Quarter 3

31st January

Quarter 4

31st May

It is important to file the TDS returns on or before the respective due dates to avoid penalties and interest for late filing.

How to Download TDS Return Forms

To download TDS return forms, follow these simple steps:

  1. Visit the NSDL Official Website
    Go to the NSDL website.
  2. Click on the ‘Download’ Tab
    Navigate to the “Download” section.
  3. Select ‘e-TDS/e-TCS’ from the Drop-down Menu
    From the available options, choose “e-TDS/e-TCS.”
  4. Click on ‘Quarterly Returns’
    Select “Quarterly Returns” from the options.
  5. Choose ‘Regular’
    Select the “Regular” option for filing the TDS return.
  6. Select the Suitable TDS Return Form
    You will be redirected to a page displaying various TDS return forms. Choose the relevant form for your category of TDS payment.
  7. Click ‘Download’
    Once the correct form is selected, click the “Download” button to save it to your system.

After downloading the form, you can proceed to file the TDS return online following the required process to ensure timely and accurate submission.

How to Verify TDS Returns

To verify your TDS returns, follow the steps below:

  1. Provide Essential Details in the TDS Return File
    Ensure all necessary information is accurately filled out in the TDS return form before proceeding.
  2. Upload the File to the Portal Validation Utility
    Upload the TDS return file to the File Validation Utility (FVU) available on the NSDL website. This tool checks for errors in the return file.
  3. Review the Error Report
    The FVU will generate a detailed report highlighting any errors or issues in the file. Carefully review the report to identify any discrepancies.
  4. Make Required Corrections
    Based on the errors reported, make the necessary corrections in the TDS return file.
  5. Re-Verify the File
    After making the corrections, re-upload the file to the File Validation Utility to ensure that the file is now error-free.

Once these steps are completed, you can proceed with the filing process, confident that the TDS return has been properly verified.

Requirements for Uploading TDS Returns

Before uploading TDS returns, taxpayers must ensure the following requirements are met:

  1. Possess a Valid TAN
    A valid Tax Deduction and Collection Account Number (TAN) is required to file TDS returns.
  2. Registered with e-Filing Portal
    Taxpayers must be registered on the Income Tax e-filing portal.
  3. Use of Return Preparation and File Validation Utility
    The TDS return must be prepared using the Return Preparation Utility (RPU) and validated through the File Validation Utility (FVU).
  4. Digital Signature Certificate (DSC)
    A Digital Signature Certificate (DSC) must be registered if filing the TDS return with a DSC.
  5. Provide Bank or Demat Account Details
    Taxpayers must provide the necessary details of their Demat account or bank account.
  6. Link PAN with Aadhaar for EVC-based Upload
    If opting for EVC (Electronic Verification Code) for verification, the taxpayer must link their PAN with Aadhaar.

By following these steps, taxpayers can ensure that their TDS return is properly prepared and ready for uploading. Additionally, individuals should be aware of the corrective measures to follow in case of errors during the filing process.

What is a Revised TDS Return?

A Revised TDS Return is filed to correct any errors or omissions made in the original TDS return. For example, if there are mistakes in the challan details or PAN details, the tax amount deposited with the government may not appear in Form 16, Form 16A, or Form 26AS.

To rectify this and ensure accurate records, a revised TDS return must be filed. Here are the key points to keep in mind when filing a revised TDS return:

  1. Acceptance of Original Return
    A revised TDS return can only be filed if the original return has been accepted by the Tax Information Network (TIN) central system.
  2. Check the Original Return Status
    Taxpayers can verify whether the original return has been accepted using their PAN and Provisional Receipt Number on the official NSDL website.
  3. Preparation of Revised TDS Return
    A revised TDS return can be prepared using the updated TDS statement. This statement can be downloaded from the TDS Reconciliation Analysis and Correction Enabling System (TRACES) portal.

By filing a revised TDS return, taxpayers can ensure that any errors in the original return are corrected, and the correct tax information is reflected in the required forms and statements.

How to Correct Errors in TDS Returns

Tax Deducted at Source (TDS) is an important method for collecting income tax in India, governed by the Income Tax Act of 1961. While filing TDS returns, there may be instances where errors occur, such as incorrect PAN details or challan details. Correcting these errors promptly is crucial to avoid discrepancies in tax filings. Below is a step-by-step guide on how to correct errors in TDS returns:

  1. Identifying the Types of Errors

Before making corrections, it’s essential to identify the type of error in the TDS return. The two main types of errors are:

  • PAN Error: This occurs when the PAN details of the deductee are incorrect.
  • Challan Error: This relates to incorrect details in the tax payment challan (e.g., wrong challan number or amount).
  1. Correcting PAN Errors

To correct errors related to PAN details:

  • Log into the TRACES Portal: Go to the TRACES (TDS Reconciliation Analysis and Correction Enabling System) website and log in using your credentials.
  • Request for Correction:
    1. From the main menu, select the ‘Defaults’ option.
    2. Choose ‘Request for Correction’ from the dropdown.
    3. Enter the Token Number of the statement you wish to correct.
    4. Select the Correction Category as ‘PAN Correction’.
    5. Fill in the required details and submit the request.
  • Download the Conso File and Justification Report:
    • After submitting the correction request, download the Conso File and the Justification Report. These documents will help identify the incorrect PAN.
  • Make the Correction:
    • Replace the incorrect PAN with the correct PAN details.
  • Upload the Corrected File:
    • After making the changes, upload the corrected file to the TRACES portal.
  1. Correcting Challan Errors

Correcting Challan errors follows a similar process to correcting PAN errors, with a slight variation in the correction category:

  • Log into the TRACES Portal: As before, log in to your TRACES account.
  • Request for Correction:
    1. From the main menu, select ‘Defaults’ and then ‘Request for Correction’.
    2. Enter the Token Number of the statement to be corrected.
    3. Select the Correction Category as ‘Challan Correction’ (instead of PAN Correction).
  • Download the Conso File and Justification Report:
    • These reports will highlight the incorrect challan information.
  • Make the Correction:
    • Replace the incorrect challan details (e.g., challan number, amount, date) with the correct information.
  • Upload the Corrected File:
    • After updating the challan information, upload the corrected file back to the TRACES portal.
  1. Important Points to Remember
  • Correct Format: Ensure that the correction statement is prepared in the same format as the original quarterly TDS/TCS statement.
  • Signature: The correction statement must be signed by the same person who signed the original statement.
  • TIN-FC Submission: Submit the correction statement to the same TIN Facilitation Centre (TIN-FC) where the original statement was filed.
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