TDS AND ITS RETURNS

The term TDS stands for Tax deducted at source which is a part of income tax that is paid at the time of making any specific or described payments like commission fees, professional fees, rent, interest, salary etc. by that person who is making such a payment.

Generally, the income tax liability lies with that person who receives or entails any sort of income. The TDS concept helps government to generate revenue by deducting income tax in advance against the incomes made by the recipient in advance at time of generating such an amount or income in order to reduce the tax burden at a later stage.

The receiver of the income gets a net amount (i.e. after deducting the TDS). The recipient will take the gross amount and will make it the part of his income and the amount of TDS deducted will be adjusted against the final tax liability of the recipient.

Therefore the person who is making any sort of specified payment then he deducts a certain percentage of the taxable amount as a part of TDS and deposits the same via filing TDS return to the government, which means that ultimately the money so deducted as a Tax from a person (recipient) is deposited with Government by the person making such payment in the name of the former person (recipient).

Applicability

Every person who is making payments that are specifically specifies under the Income Tax Act, 1961 is liable to follow the rules of TDS deduction and return filing. TDS is to be deducted as per the fixed percentage as applicable over that particular payment which is mentioned in the Act.

TDS deduction timing

TDS is to be deducted on the basis of below two events (whichever is earlier):

• At the time of making the specified payment; or
• Booking expenses of the deduction in the books of account.

How to file TDS return online

There are two types of forms in TDS return:

• Form 24Q - it contains the details of TDS amount that is deducted and deposited on salaries.
• Form 26Q - it contains the details of TDS amount charged under all the heads other than salaries.

TDS returns are to be filed on QUARTERLY basis. The tds returns due dates for filing of FY 2019-20 are enumerated through below table:

QUARTER                            PERIOD                                             LAST DATE OF FILING

1st Quarter                   1st April to 30th June                                         31st July 2019

2nd Quarter                  1st July to 30th September                                 31st October 2019

3rd Quarter                   1st October to 31st December                           31st January 2019

4th Quarter                   1st January to 31st March                                  15th July 2020
                                      (Government Deductor)          

4th Quarter                   1st January to 31st March                                  31st July 2020
                                     (Non-Government Deductor)

Due dates for depositing TDS with the government

Section 200 of the Income Tax act 1961 states that it’s the liability of the deductor to deposit TDS to the government within the prescribed period.

Rule 30 of the Income tax act has stated the due-dates to deposit the TDS, which are enumerated as below:

Period                         Due date for TDS payments

APRIL                        7^TH MAY

MAY                           7^TH JUNE

JUNE                          7^TH JULY

JULY                          7^TH AUGUST

AUGUST                    7^TH SEPTEMBER      

SEPTEMBER             7^TH OCTOBER

OCTOBER                 7^TH NOVEMBER

NOVEMBER             7^TH DECEMBER

DECEMBER              7^TH JANUARY

JANUARY                 7^TH FEBRUARY

FEBRUARY              7^TH MARCH

MARCH                     30^TH APRIL

TDS payments’ due date (in case of public holiday or Sunday)

Whosoever has been into the payments related transactions and is also liable to various compliances of the Law has to mandatorily deposit TDS. In case the TDS payment or TDS return filing due-date is falling on Sunday or any public holiday, then the due-date as per the Act is automatically shifted onto next working day falling after such a Sunday or any public holiday.

Documents required for TDS return filing

Below are the certain documentation which is required to be done in case of TDS Return filing:

• Pan numbers of the deductees
• Advance tax payment challans
• TDS certificates in case the TDS is deducted by other person
• Banking accounts details and information
• Details of tax deducted and the gross payment done
• Date of such payment or TDS deduction
• Type of payment for which TDS was deducted.

Non-deduction of TDS and its consequences

Section 201 of the Income Tax Act covers the consequences of failure to deduct TDS.
Interest on late payment of TDS is charged on the basis of its period i.e. 1.5% p.m. from the due-date of deduction till the date of payment.

Recent notifications in rate of interest due to COVID-19

For non-payment of TDS only 9% reduced rate of interest shall be charged in the cases where the Due date falls from 20/03/2020 to 29/06/2020, however provided the TDS is paid till 30/06/2020.

Further no penalties or any sort of prosecution will be initiated or entertained for these non-payments.

Late fees in case of delay in TDS return filing

Section 234E contains the provisions related to late fee in case of delay in TDS return filing. In case any person fails to file TDS return on or before the due date then he is liable to pay a sum of Rs. 200 for every day during such default continues. The maximum amount of fees, however shall never exceed the amount of TDS.

Penalty in case of failure to file TDS return

In inclusion to late fees, the deductor who is liable to file return on the due date and he fails to do so then as per Section 271H the penalties shall be levied .i.e. minimum penalty is Rs. 10,000 and maximum Rs. 1,00,000.

However, no penalty shall be levied if the deductor undertakes the following conditions:

• Tax so deducted is paid to the government along with the late fees and interest as applicable.
• If the TDS return is filed before the expiry of one year from the due date specified in this regard.

To wrap up for any further information you may contact on the below mentioned details:

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