TDS return is essentially a summary of all the transactions pertaining to TDS completed during a quarter. In other words, TDS Return is a quarterly statement of TDS that is submitted to the Income Tax Department, by the deductor.
TDS (Tax Deducted at Source) is a source of collecting tax by the Government of India at the time of making specified payments. These include—rent, commission, professional fees, interest, and salary. The tax is deducted at the time money is credited to the payee's account or at the time of payment, whichever is earlier.
Form 26Q needs to be submitted for tax deduction at source for all payments except salaries. It is also submitted quarterly under Section 200(3), 193 and 194 of the Income Tax Act. The payments on which the tax is deducted include interests, dividends, professional fees and director's sitting fee. It is mandatory to present PAN by the non-government deductors.
The following is where TDS is applicable:
1. The employer deducts TDS as per the income tax slab rates applicable.
2. Banks deduct TDS @10%. They may deduct 20% if they do not have your correct PAN information.
3. Rent payments made by individuals and HUF (Hindu Undivided Family) exceeding Rs 50,000 per month, has a deductible TDS @ 5% even if the individual or HUF is not liable for a tax audit. The TDS Rates are specified under the income tax act, and TDS is deducted based on these specific rates.
Any individual making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of payment. But no TDS is deductible if the person making the payment is an individual or HUF (Hindu Undivided Family) whose books are not to be audited.
The form 26Q only contains one annexure where the details are to be filled. These details are as follows:
* Challan details
1. The serial number of challan
2. TDS amount
3. Surcharge amount
4. BSR Code
5. Education cess amount
6. Amount of interest
7. The total of tax deposit
8. The number of demand draft or the cheque (if applicable)
9. The collection code
10. The tax deposit date
11. Method of TDS deposition
* Payer Details
3. PAN Number
* Payee Details
1. TName of the payee
2. Email ID
3. SFull Address
4. Contact number
5. PAN Number
6. Telephone number
The deductor also has to mention the reason for not deducting TDS or deducting it at a lower case, whichever applicable.
All the taxpayers are supposed to file the TDS return with form 26Q in a timely manner and regularly. The form 26Q is filed on a quarterly basis and the last dates for doing that are as follows:
* Quarter 1 31st July
* Quarter 2 31st Oct
* Quarter 3 31st Jan
* Quarter 4 31st May
While making the payment, the payer needs to deduct the TDS amount according to the rate applicable. This deducted amount should be deposited to the credit of government exchequer through the challan ITNS 281 on time. It can also be filed online on the website of TIN. If the deduction and deposition process is not done on time, the penalty is levied as mentioned below.
Also, if the TDS is deducted at a lower rate, then the payee needs to get a certificate of lower deduction as per section 197 of the Income Tax Act, 1961. If the payee obtains the certificate of lower deduction, then the TDS is deducted according to the rate mentioned in the certificate and it will be reflected in the filing of TDS via the form 26Q.
If the form 26Q is not filed according to the due dates mentioned above, the taxpayer is liable to pay some penalties depending on the amount and how late the returns are filed. According to Section 234E, if the form 26Q is not filed by the due date then a late filing fee of Rs. 200 per day is charged until the amount of the penalty becomes equal to the TDS amount.
Similarly, if the form 26Q is not filed, then the penalty for failure of submitting the required documents is Rs. 10,000 to a maximum penalty amount of Rs. 1,00,000 according to section 271H.
If the following conditions are met, no penalty will be levied under section 271H:
* The TDS is deposited to the government.
* The interest and penalty for late filing have also been deposited.
* The return has been filed before the completion of 1 year from the due date.
On top of that, the government may also charge interest for non-deduction and non-deposition of TDS returns. If the TDS is not deducted on time, then an interest of 1% per month is charged on the days spent between the due date of deduction and the actual date of TDS deduction.
Now, if the TDS is not deposited on time then an interest of 1.5% per month is levied on the time period spent between the actual date of deduction and the actual date of deposition.
The form 26Q and the TDS return can be prepared and filed by using NSDL e-Gov eTDS/TCS Return Preparation Utility (RPU). The RPU can be downloaded from the website of TIN free of cost. The return has to be submitted to any of the TIN-FCs established by NSDL e-Gov. after filing the return, its status can be checked on the website by putting in the token number or the provisional receipt number and the TAN on NSDL website.
To download the form 26Q, follow the given steps:
* Go to the official NSDL website - https://www.tin-nsdl.com/
* Click on the downloads tab and from the menu choose E-TDS/E-TCS.
* On this page, click on ‘quarterly returns’ and then select 'regular'.
* Once you do that you will be transferred to a new web page.
* This page will contain a section ‘form’ under which there will be form 26Q. Click on that.