What is TDS?
TDS stands for ‘Tax Deducted at source’. TDS is a source of collecting tax by Income tax department at the time when a transaction takes place. TDS is required to be deducted at the time of payment or bill booked, whichever is earlier.
How to avoid TDS?
If a person whose total income in a financial year will be below the exemption limit, he can ask the payer not to deduct TDS by submitting Form 15G/15H.
Employee does not need to pay tax if he gives investment proof to his employer for claiming deductions of H.R.A, 80C, 80D, Interest on Home loan etc. and after investment his total taxable income is below taxable limit.
Penalties for late TDS deposit & TDS return Filing
Due date for TDS deposit: Due date for depositing TDS is month end within 7 days; for the month of March, due date is 30 April.
Penalties for late TDS deposit: For late deposit of TDS, 1.5% per month interest applicable from the date of deduction. If TDS is not deducted 1% per month interest applicable.
Due date for TDS Return filing: Due date for filing TDS return is Quarter end within next month; For March month, due date is 31 May
Penalties for late TDS Return filing: For late filing of TDS return Rs. 200/- per day penalty applicable. However, the penalty shall be limited to the actual TDS amount
Nature of Payment
Cut off Amount
Other = 5k
1 Lac p.a.
30 K per contract
2.40 Lac p.a.
Rent Paid by Individual/ Huf other than those covered u/s 44AB
Professional Charges technical Services
As per Income Tax Slab
Purchase of Immovable Property (Other than agriculture land)
- TDS on Transporter is nil if transporter owing upto 10 goods carriage
- No education cess and surcharge applicable on TDS
- If pan no. not mention 20% TDS rate applicable
- No. TDS deduct for person fill form 15G and 15H
- Contractor include Airline, C & F Agent, Courier, Restaurant booking, Recruitment agency, FDR (Commission & Brokerage), Electrician, Repair & Maint., Cha Agent, Advertisement services, Security Agency, Job Work
- TCS @ 0.1% on sale of goods in excess of 50 lakh rupee in a year by a seller whose turnover is more than 10 crore rupees
TDS return is a quarterly statement and is required to be submitted by deductor electronically. TDS return filing must be filed by every person who has deducted TDS. There are following types TDS forms:
- Form 24Q : For the statement for tax deduction at source from salary (salary TDS)
- Form 26Q: For the statement for tax deduction source (TDS) from everywhere except for the salary.
- Form 24QB : For the statement for tax deduction at source from transfer of immovable property
- Form 27Q: For the statement for the tax deduction of source from other means of earning like interests from savings or fixed deposits, dividend funds or any other sum payable.
- Form 27EQ: For the statement for the tax deduction of TCS
The return statement of quarterly TDS must be accompanied with a signed in form number 27A. These are to be filed by those deducting or collecting along with quarterly statements. It’s a summary of TDS return filing or TCS returns that are containing the totals of amount that’s paid and the income tax that’s deducted at source
TDS Return filing process
Step – I
The data structure (file format) in which the e-TDS / e-TCS return is to be prepared has been notified in https://www.tin-nsdl.com/services/etds-etcs/etds-rpu.html
Step – II
e-TDS/e-TCS return in accordance with the file formats is to be prepared in clean text ASCII format with ‘txt’ as filename extension. e-TDS/e-TCS return can be prepared using Return Preparation Utility provided by NSDL or any other third party software
Step – III
Once the file has been prepared as per the file format, it should be verified using the File Validation Utility (FVU) provided by NSDL
Step – IV
In case file has any errors the FVU will give a report of the errors. Rectify the errors and verify the file again through the FVU.
Step – V
Generated .fvu file can be submitted at TIN-FC or uploaded at http://incometaxindiaefiling.gov.in