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TDS Return filing is mandatory for deductors to submit to Income tax department every quarter. Filing of TDS Returns requires a PAN of the deductor and deductee. It also requires TAN of the deductor and Digital Signature Certificate of deductee.
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TDS is deducted at the time of payment of salary or life insurance policy. The amount deducted as TDS is then deposited to the Income – tax department. By way of TDS, some portion of the tax is automatically paid to the Income Tax department. Thus, TDS is considered as a means of reducing tax evasion.
According to the GST requirements, the following businesses must register:
The list of the deductors who can deduct TDS is mentioned below:
On salary income, TDS is deducted depending upon the income tax slab rates applicable to a person. For other types of income such as rent, interest on securities, insurance commission, dividend, etc. the TDS rates are fixed and vary between 10% and 20%.Some of them are shown in table below:
| SECTION | NATURER OF PAYMENT | TDS RATE OF INDIVIDUAL/ HUF IN PERCENT | TDS RATE OF NRI |
|---|---|---|---|
|
192 |
Income earned by winnings from card games, lotteries, and other games |
30% |
30% |
|
194BB |
Income from winning of horse races |
30% |
30% |
|
194EE |
Payment made into National savings scheme (NSS) deposit
|
10% |
10% |
|
194F |
Payment made towards repurchase of units by Unit Trust of India or Mutual Funds |
20% |
20% |
|
194G |
Income that arises from sale of lottery tickets/commissions and/or other transactions |
5% |
5% |
|
194LBB
|
Investment fund which pays income to the unit holder [except for incomes that are exempted under Section 10 (23FBB)] |
10% |
30% |
|
194LBC
|
Income generated from investments made in securitisation trust as per Section 115TCA |
25% |
30% |
The benefits of TDS are as follows:
The following are the due dates for filing TDS returns:
| QUARTER | Quarter Period | Last Date of Filing of TDS Returns |
|---|---|---|
|
1st Quarter |
From 1st April to 30th June |
31st July |
|
2nd Quarter |
From 1st July to 30th September |
31st October |
|
3rd Quarter
|
From 1st October to 31st December |
31st January |
|
4th Quarter |
From 1st January to 31st March |
31st May |
The main purpose of the Tax Deduction and Collection Account Number which is commonly known as TAN, is related to deduction or collection of tax at source. As prescribed in Section 203A of the Income Tax Act, 1961 obtaining TAN is mandatory for individuals or businesses who are authorized by the government to deduct or collect tax. In case of any failure to quote TAN Number in documents can result in a penalty of Rs. 10,000
TDS return filing is a quarterly statement which must be submitted to the Income Tax Department by the deductor (i.e. all persons responsible for deducting TDS). TDS Return contains the details of TDS deducted and deposited by deductor, PAN of deductor and deductee, TDS challan information, type of payment, amount of TDS deducted, etc. The TDS return filing must be done by every assessee who has deducted TDS at prescribed intervals.
An investment proof may be submitted by an employee to his/her employer for the purpose of claiming deductions and, therefore, his taxable income falls below the maximum amount not chargeable to tax. In such cases, no TDS should be deducted by the employer.
The deductor being liable to deduct tax and to fileTDS Return form as the supporting document, it is important to note that there are different types of TDS Return Forms available for different situations. The type of TDS Return Form which must be submitted is based on the nature of income of the deductee or the type of deductee who pays the TDS.