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Best Everything about for TDS Return

Everything about for TDS Return

Everything about for TDS Return TDS, or Tax Deducted at Source, is indeed a component of income tax. It’s a requirement for certain payments made by individuals or entities. In this article, we’ll delve into the specifics of TDS provisions outlined in the Income Tax Act.

What is TDS? – TDS Meaning and Full Form TDS

Everything about for TDS Return TDS, or Tax Deducted at Source, is a system where income tax is deducted from the money paid at the time of specific payments such as rent, commission, professional fees, salary, interest, etc., by the individuals or entities making such payments. Normally, the individual receiving the income is responsible for paying the income tax. However, through the TDS provisions, the government ensures that income tax is deducted in advance from the payments made by these individuals or entities.

Consequently, the recipient of the income receives the net amount after the TDS deduction. Everything about for TDS Return The recipient then adds the gross amount to their income, and the TDS amount is adjusted against their final tax liability. By doing so, the recipient receives credit for the amount already deducted and paid on their behalf. This mechanism aids the government in collecting taxes in advance and effectively tracking transactions.

TDS should be deducted by any individual or entity making specified payments as outlined in the Income Tax Act.

TDS should be deducted by any person making specified payments mentioned under the Income Tax Act at the time of making such payments. Everything about for TDS Return  However, individuals or Hindu Undivided Families (HUFs) whose sales from business or profession do not exceed Rs. 1 crore or Rs. 50 lakhs, respectively, are not required to deduct TDS.

For rent payments exceeding Rs. 50,000 per month made by individuals and HUFs, TDS at a rate of 5% is required, even if they are not liable for a tax audit. In such cases, individuals and HUFs liable to deduct TDS at 5% do not need to apply for a Tax Deduction and Collection Account Number (TAN).

Employers deduct TDS at the applicable income tax slab rates, while banks typically deduct TDS at a rate of 10%. However, if the bank does not have the PAN information, they may deduct TDS at a rate of 20%.

Everything about for TDS Return The rates of TDS for most payments are set in the Income Tax Act, and TDS is deducted by the payer based on these specified rates. Everything about for TDS Return If an individual submits investment proofs to their employer and their total taxable income is below the taxable limit, no tax or TDS should be deducted from their income.

Similarly, individuals can submit Form 15G and Form 15H to the bank if their total income is below the taxable limit, to avoid TDS deduction on interest income. Everything about for TDS Return In cases where proofs are not submitted to the employer or if TDS has already been deducted but the total income is below the taxable limit, individuals can file a return and claim a refund of the TDS.

The complete list of specified payments eligible for TDS deduction, along with the rate of TDS, is provided in the Income Tax Act.

The due date for depositing the TDS to the government?

The TDS must be deposited to the government by the 7th of the following month.

New process of making payment TDS?

To deposit Tax Deductions at Source (TDS), you need to use the Income Tax Portal and log in with your Tax Deduction and Collection Account Number (TAN). The direct tax payments facility has been shifted from OLTAS ‘e-payment: Pay Taxes Online’ to the e-Pay Tax facility on the e-Filing portal. Simply visit the Income Tax Department’s website at https://www.incometax.gov.in/ and select the ‘e-Pay Tax’ option to make direct tax payments, including TDS.

How and when to file TDS returns?

Filing Tax Deducted at Source (TDS) returns is obligatory for all individuals or entities that have deducted TDS. Everything about for TDS Return TDS returns must be submitted quarterly, and various details such as Tax Deduction and Collection Account Number (TAN), amount of TDS deducted, type of payment, PAN of the deductee, etc., need to be provided. Different forms are designated for filing returns depending on the purpose of TDS deduction. Various types of return forms include:

Form No Transactions reported in the return Due date
Form 26Q TDS on all payments except salaries Q1 – 31st July <br> Q2 – 31st October <br> Q3 – 31st January <br> Q4 – 31st May
Form 24Q TDS on Salary Q1 – 31st July <br> Q2 – 31st October <br> Q3 – 31st January <br> Q4 – 31st May
Form 27Q TDS on all payments made to non-residents except salaries Q1 – 31st July <br> Q2 – 31st October <br> Q3 – 31st January <br> Q4 – 31st May
Form 26QB TDS on sale of property 30 days from the end of the month in which TDS is deducted
Form 26QC TDS on rent 30 days from the end of the month in which TDS is deducted

What is a TDS certificate?

A TDS certificate, such as Form 16, Form 16A, Form 16B, and Form 16C, is a document issued to the assessee by the person who deducted TDS from their income while making a payment. For example, banks issue Form 16A to depositors when TDS is deducted on interest from fixed deposits, while employers issue Form 16 to employees.

Form Certificate of Frequency Due date
Form 16 TDS on salary payment Yearly 31st May
Form 16A TDS on non-salary payments Quarterly 15 days from due date of filing return
Form 16B TDS on sale of property Every transaction 15 days from due date of filing return
Form 16C TDS on rent Every transaction 15 days from due date of filing return

TDS credits in Form 26AS

Everything about for TDS Return Understanding how TDS is connected to your PAN is crucial. TDS deductions are associated with PAN numbers for both the deductor and the deductee. To track TDS deductions from your income, it’s essential to review your Tax Credit Form 26AS. This form serves as a consolidated tax statement available to all PAN holders.

Since all TDS is linked to your PAN, Form 26AS provides details of TDS deducted on your income by each deductor for various payments, including salaries and interest income. Everything about for TDS Return Additionally, it includes income tax paid directly by you as advance tax or self-assessment tax. Therefore, ensuring the accuracy of your PAN information is vital wherever TDS may apply to your income.

An incorrect claim of TDS credit can lead to a defective notice from the income tax department. Hence, reconciling TDS credits in Form 26AS with TDS receivables recorded in books is essential, particularly when TDS is deducted by multiple customers/vendors involved in business.

You can conveniently file your TDS returns using Clear Tax software, such as Clear TDS. This online TDS software requires no download or desktop installation, making it user-friendly. With Clear TDS, you can easily prepare accurate e-TDS statements online with just a few clicks, and it’s compatible with TDS returns from previous financial years for easy import. Additionally, you can generate your TDS certificates using Clear TDS.

To upload TDS statements on the Income Tax Department website, follow these steps:

  1. Visit the Income Tax website and log in with your Tax Deduction and Collection Account Number (TAN).
  2. Go to the “e-File” section, then click on “Income Tax Forms,” and choose “File Income Tax Forms” on the dashboard.
  3. Choose the relevant form for uploading your TDS statement and fill in the required details accurately.
  4. Validate the return using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

Types of income sources that qualify for TDS:

  1. Salary
  2. Payments to Contractors
  3. Commission Payments
  4. Sale of House
  5. Insurance Commission
  6. Interest on Securities
  7. Interest other than Interest on Securities
  8. Rent Payments
  9. Professional Fees
  10. Online Gaming
  11. Winnings from games like lottery, crossword puzzle, card games, etc.

When TDS is already deducted from your income, your tax liability depends on the type of income and the TDS rates applicable. 

For salary income, TDS is deducted based on the income tax slab applicable to you. However, for other types of income, such as interest or rent, the TDS rates are fixed and typically range between 10% and 20%. These rates are not based on your total income but are applied to the specific income received.

In certain cases, you may suffer TDS on your receipts, meaning that tax is deducted at the source. However, you are still required to calculate your annual income by aggregating income from all sources to determine your overall tax liability.

 

Sources : https://taxguru.in/income-tax/tds-return-filing.html#:~:text=TDS%20(Tax%20Deducted%20at%20Source,mitigating%20the%20risk%20of%20penalties.

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