TDS Return Filing Online in Gujarat
What do we mean by TDS?
TDS is a type of advance tax which is deducted from the earnings of an individual or an organization before the money is actually credited into that entity’s account, according to the Indian Taxation Code. The government is able to generate revenues by implementing the provisions of TDS on the earnings of individuals as well as businesses. Rules and regulations regarding TDS are controlled and governed under the Income Tax Act, 1961 by the Central Board of Direct Taxes (CBDT).
Example:
Abex Pvt Ltd make a payment for office rent of Rs 1,00,000 per month to the owner of the property.
TDS is required to be deducted at 10%. Abex pvt ltd must deduct TDS of Rs 10000 and pay balance Rs 90,000 to the owner of the property.
Thus the recipient of income i.e. the owner of the property in the above case receives the net amount of Rs 90,000 after deduction of tax at source. He will add gross amount i.e. Rs 1,00,000 to his income and can take credit of the amount already deducted i.e. Rs 10,000 by Abex pvt ltd against his final tax liability.
What do we mean by TDS returns?
What are the methods of TDS deduction
As commonly known, TDS is deducted on the payments made to the receiver. It means that the payments are done to the receiver after deduction of appropriate tax for the income in question. The amount of TDS that the receiver is liable to pay is deducted from the payment the receiver is liable to receive and the remainder is paid out. It is important to note that the liability to deduct TDS is of the deductor. For instance, in case of employer paying salary to employee, the employer is the deductor and the employee is the TDS deductee.
What are the payments on which TDS is deducted?
TDS is to be deducted on Salary, Payment of taxable accumulated balance of provident fund, Interest on securitie, Dividend, Interest other than interest on securities, Winnings from lottery or crossword puzzle or card game or other game of any sort, Winnings from horse races, Payment or credit to a resident contractor/sub-contractor, Insurance commission, Payment in respect of life insurance policy, Payment in respect of deposits under National Savings Scheme, 1987, Payment on account of repurchase of units of MF or UTI, Commission on sale of lottery tickets, Commission or brokerage, Rent, Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land), Payment of rent by an individual or HUF not subjected to tax audit under, Payment under Joint Development Agreement to a resident individual or HUF who transfers land or building as per such agreement, Professional fees, technical fees, royalty or remuneration to a director;Note: 2% if payee is engaged in the business of operation of call center, Payment of compensation on acquisition of certain immovable property, Payment of the nature referred to in section 10(23FC) or section 10(23FC)(a) or section 10(23FCA) by business trust to resident unit holders, Payment in respect of units of investment fund specified in section 115UB, Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016), Payment of contractual work, commission (not being insurance commission referred to in section 194D), brokerage or professional fees, by an individual or a HUF not covered under section 194C, section 194H and 194J, Payment in cash by banking company or co-op. bank or post office.
What if I fail to deduct TDS?
Disallowance of expenditure:
As per section 40(a)(i) of the Income tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
However, if tax is deducted or deposited in subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year.
Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.
As per Section 58(1A) (as amended with effect from the assessment year 2018-19), the provisions of section 40(a)(ia) and 40(a)(iia) shall also apply in computing the income chargeable under the head “Income from other sources”
Get answers to all your queries
TDS is based on the simple premise that tax is deducted when a payment is due or when an actual payment is made; whichever is earlier.
The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month. TDS deducted in the month of Dec must be paid to the government by 7th Jan. However, the TDS deducted in the month of March can be deposited till 30th April.
1st Quarter:1st April 2018 to 30th June- 31st July 2nd Quarter: 1st July 2017 to 30th September- 31st October 3rd Quarter: 1st October 2018 to 31st December- 31st January 4th Quarter: 1st January 2019 to 31st March- 31st May
A payee can approach to the payer for non-deduction of tax at source but for that they have to furnish a declaration in Form No. 15G/15H, as the case may be, to the payer to the effect that the tax on his estimated total income of the previous year after including the income on which tax is to be deducted will be nil.
It is the duty and responsibility of the payer to deduct tax at source. If the payer fails to deduct tax at source, then the payee will not have to face any adverse consequences. However, in such a case, the payee will have to discharge his tax liability. Thus, failure of the payer to deduct tax at source will not relieve the payee from payment of tax on his income.
To know the quantum of the tax deducted by the payer, you can ask the payer to furnish you a TDS certificate in respect of tax deducted by him. You can also check Form 26AS from your e-filing account at https://incometaxindiaefiling.gov.in You can also use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in
Failure to remit tax deducted by me in the government’s account within stipulated time-limit would attract interest, penalty and rigorous imprisonment of up to seven years.
TDS follows the “pay as your earn” concept. It is deducted due to following reasons:
1) TDS facilitates the sharing of the tax collection responsibility between the deductor and the government, ensuring a regular inflow of cash to the later.
2) TDS enables salaried individuals to pay taxes in easy instalments each month, thus preventing them from the burden of lump sum tax payments.
3) It enables the government to receive the necessary funds all year round which aids it in running the country smoothly.
4) It ensures that the tax net is spread wide enough and prevents tax evasion.
Based on the type of income and amount of income earned, TDS is paid at various rates. Thus, different kinds of income have different TDS rates and the tax is paid on the extra amount earned after a certain maximum threshold limit is attained. The rate at which TDS is paid varies from 1 per cent to 30 per cent, depending on the income taxed.
24Q-Statement for Tax Deducted at Source from salaries 26Q-Statement for Tax deducted at source on all payments except salaries 27Q-Satement for deduction of tax payable to Non-Resident of India 27EQ-Statement of the collection of tax at source
If any person fails to— (a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B; or (b) pay the whole or any part of the tax as required by or under— (i) sub-section (2) of section 115-O; or (ii) the second proviso to section 194B, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner
Following are the basic duties of the person who is liable to deduct tax at source. • He shall obtain Tax Deduction Account Number and quote the same in all the documents pertaining to TDS. • He shall deduct the tax at source at the applicable rate. • He shall pay the tax deducted by him at source to the credit of the Government (by the due date specified in this regard*). • He shall file the periodic TDS statements, i.e., TDS return (by the due date specified in this regard*). • He shall issue the TDS certificate to the payee in respect of tax deducted by him (by the due date specified in this regard*). *Refer tax calendar for the due dates.
Non-reflection of TDS credit in Form 26AS can be due to several reasons like non-filing of TDS statement by the payer, quoting incorrect PAN of the deductee in the TDS statement filed by the payer. Thus, in case of non-reflection of TDS credit in Form 26AS, the payee has to contact the payer for ascertaining the correct reasons for non-reflection of the TDS credit in Form 26AS.
No tax required to be deducted by any person from any sum payable to- the Government, or the Reserve Bank of India, or a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income, or a Mutual Fund specified under clause (23D) of section 10, where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.
