TDS Returns – Eligibility, Filing Dates, Process, Form Details

TDS Returns – Eligibility, Filing Dates, Process, Form Details

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Rashmi
Rashmi Karan
Manager - Content
Updated on Apr 3, 2023 15:35 IST

Tax Deducted at Source (TDS) return is a quarterly statement submitted by the deductor to the Income Tax Department. Let’s learn more about TDS return in the blog.

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The Indian government has tax laws that require tax to be deducted before tax is paid. This rule of law applies to specific payments that exceed specified limits. This ensures that taxes are first paid to the government on time instead of risking taxpayers defaulting when their tax is due in arrears. Such a tax payment type is called Tax Deducted at Source or TDS. The article covers details about TDS and the process of TDS return filing.

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What is TDS?

TDS, or Tax Deducted at Source, is a part of income tax and is deducted by a person for certain payments they make. This article will discuss the TDS returns under the Income Tax Act.

TDS is income tax deducted from the amount someone pays when making specified transactions, such as rent, salaries, commissions, interests, professional fees, etc., by the persons making such payments. 

The one receiving the payment is liable to pay income tax. Under the TDS provision, the income tax deducts in advance.

Also Read – Professional Tax – Obligations, Exemptions, State-Wise Rates

What is TDS Return?

TDS return is the quarterly statement or summary of all TDS-related transactions made in a specific quarter. It includes details of the TDS collected and deposited by the deductor. TDS filing involves two parties, as mentioned below – 

A person liable to deduct TDS (Deductor) – A person making payment of any transaction like salaries, rent, interests, etc., is liable to deduct TDS. A deductor can be an individual, a group of individuals, HUFs, limited companies, local authorities, or partnership firms.

A person whose TDS would be deducted (Deductee) – TDS will be deducted from the amount payable to the person receiving any transaction.

Examples of transactions for which the deductor needs to file a TDS return are –

  • Salaries
  • Professional fees
  • Income earned by winning lotteries, puzzles, etc.
  • Income generated from securities
  • Income from competing in horse races and winning 
  • Insurance commission
  • Rent payment
  • Interest earnings
  • Sale/purchase of immovable property
  • Payments made toward National Saving Scheme and other schemes

Must Read – What is Finance?

TDS Returns Filing

The deductor is responsible for the timely deposit of the deducted TDS to the government within the specified time.

For example – TDS deducted in March should be deposited by 30th April.

It is mandatory for the TDS deductees to file Tax Deducted at Source returns. TDS return is submitted quarterly under Section 206 of the Income Tax Act. Details, as mentioned below, need to be furnished –

  • Tax Deduction Account Number or Tax Collection Account Number (TAN)
  • Amount of TDS deducted
  • Type of payment
  • Permanent Account Number (PAN) details of deductees and deductors

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The deductor is responsible for issuing a TDS certificate to the deductee. The employer must issue the TDS certificate in Form 16 to the employee for TDS deducted from the salary annually.

For TDS deducted under any other category, the deductor must issue the TDS certificate in Form 16A every quarter. 

Eligibility for TDS Returns

  • Employers and organizations with valid TAN must file TDS returns. 
  • Individuals whose accounts are audited under Section 44AB and who hold an office under the government or companies must file online TDS returns quarterly. 

Forms to file annual/quarterly TDS/TCS returns

Per provisions of Section 206 of the Income Tax Act, 1961, below are the forms to fill for TDS statements/returns.

Form No Particulars Periodicity
Form 24 Annual return of “Salaries.”  Annual
Form 26 Annual return of tax deduction for all payments other than “Salaries.” Annual
Form 27 Statement of deduction of tax from interest, dividend or any other sum payable to certain persons. Quarterly
Form 27E Annual return of tax collection. Annual
Form 24Q Quarterly statement for tax deducted at source from “Salaries.” Quarterly
Form 26Q Quarterly tax statement deducted at source for all payments other than “Salaries.” Quarterly
Form 27Q Quarterly statement of deduction of tax from interest, dividend, or any other sum payable to non-residents. Quarterly
Form 27EQ Quarterly statement of collection of tax at source.

You must file returns on the below dates – 

  • April – June (Q1) – 31st July 
  • July – September (Q2) – 31st October 
  • October – December (Q3) – 31st January 
  • January – March (Q4)– 31st May

Must Read – Difference Between Direct and Indirect Tax

TDS Return Filing Procedure

Here is the step-by-step procedure to file the TDS returns online.

  1. Fill the Form 27 A. If you are filling out the hard copy, it must be verified, and the E-TDS return filed electronically.
  2. Mention and tally the tax deducted at the source and the total amount paid.
  3. Mention the TAN of the organization on Form 27 A. 
  4. While filing the TDS returns, mention the challan number, the mode of payment, and the tax details. In case of any mismatch, you must file the TDS returns again.
  5. The basic form used for Filing the e-TDS must be used to bring consistency. Enter the 7 Digit BSR to ease the tallying process.
  6. Submit the physical TDS returns at the TIN FC. In the online filing, submit the form on the NSDL TIN website.
  7. A token number or a provisional receipt is received if the provided information is correct as proof that the TDS return has been filed.
  8. In case of rejection, a non-acceptance memo and the reason for the rejection are issued. You would need to file the returns again.

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Rashmi Karan
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Rashmi is a postgraduate in Biotechnology with a flair for research-oriented work and has an experience of over 13 years in content creation and social media handling. She has a diversified writing portfolio and aim... Read Full Bio

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