TDS RETURN: UNDERSTANDING THE BASICS

Tax Deducted at Source (TDS) plays a vital role in the Indian taxation system, serving as a means for the government to collect taxes at the point of transaction. TDS return, therefore, becomes an essential component for both deductors and the Income Tax Department, providing a comprehensive summary of TDS-related transactions completed during a quarter. Further, let’s delve deeper into the intricacies of TDS returns and understand their significance.

UNDERSTANDING TDS RETURN

It is essentially a quarterly statement submitted by the deductor/employer to the Income Tax Department, encapsulating all TDS-related transactions undertaken during the said quarter. It serves as a consolidated record of TDS entries collected and paid to the government, eventually offering crucial insights into tax compliance.

COMPONENTS OF TDS RETURNS

1. Deductee’s PAN Number: Each entry in the TDS return is associated with the Permanent Account Number (PAN) of the deductee.
2. Details of TDS Contributions: It includes a detailed breakdown of the TDS contributed to the government’s income, providing transparency and accountability.
3. Information Regarding TDS Challan: The TDS return specifies the details of the challan used for depositing the deducted tax amount.
4. Payment Amount: It highlights the amount of tax deducted for each transaction.
5. Section Under Which TDS is Deducted: TDS return categorizes transactions based on the relevant section of the Income Tax Act under which TDS is deducted.

TYPES OF TDS RETURNS

1. Form 24Q: Used for preparing eTDS returns for deductions on salaries.
2. Form 26Q: Submitted for tax deduction at source for all payments except salaries.
3. Form 27Q: Applicable for payments other than salary made to non-resident Indians and foreigners.
4. Form 27EQ: Used for tax collected at source under Section 206C of the Income Tax Act.

ELIGIBILITY

Any individual must deduct TDS at the time of payment for specified payments mentioned under the Income Tax Act. However, if an individual or HUF (Hindu Undivided Family) whose books are not to be audited makes the payment, no TDS is deductible.

FILING TDS RETURNS ONLINE

You can file TDS return online through the Return Prepare Utility Software available on the NSDL website. Basically, the deductor has to sign the return through digital signature if filing online.

THE ONLINE PROCESS

1. Check the file format required for e-TDS return preparation on the TIN-NSDL’s e-Gov e-TDS/TCS Return Preparation Utility (RPU) webpage.
2. Prepare e-TDS/e-TCS return as per the file format.
3. Verify the file through the File Validation Utility provided by NSDL.
4. Rectify any errors reported by the File Validation Utility and re-verify the file.
5. Submit the .fvu file generated at TIN-FC or upload it on the Income Tax Department’s e-filing page.

Also Read – UNDERSTANDING TDS: A COMPREHENSIVE GUIDE