TDS Return Filing
If you are engaged in Business or Professional practice, you are required to deduct TDS(Tax Deduction at Source) on payments like Salaries, Professional Fees, Contractors’ fees, etc. as per Income Tax Act.
Since Income Tax Department cannot chase every individual, it has deferred the responsibility on your shoulders to collect tax in the form of TDS and pay it to the Government. Therefore, you have to deduct tax and pay lesser amount to the employees or vendors (i.e. total amount less tax amount) and deposit the tax deducted to the IT Department every month. At the end of year, your employee or vendor will get the benefit of this tax paid, while filing their Income Tax Returns.
TDS Returns are simply a summary of employees or vendors whose tax you have deducted. You have to include information like his PAN Number, the Total Amount and the TDS deducted from their payments. These returns are to be filed quarterly.
PocketLawyer is India's leading platform for Legal, Tax and Financial services. We make the process of TDS Return Filing easy and hassle-free for you. In addition to TDS Return Filing, PocketLawyer can also help you with ESI Return Filing, Tax Notice Reply, Excise Return, GST Return Filing, and more.
Reasons for TDS Return Filing
There are two reasons –
- It is a mandatory compliance. If you fail to file returns, you might receive a notice from IT Department. Besides, if you fail to file the return within due date, you will be charged a penalty of INR 200 per day until the return is filed.
- When you deposit TDS, you only mention your Tax deduction & collection Account Number (TAN). However, your employees or vendors will not get the benefit of tax deposited unless you file the TDS return. This might also impair your relationship with them.
Documents to be Provided
- Details of deductor i.e. Your name and your TAN number
- Details of Online TDS account and TRACES account (if you are not registered, you may ask your tax expert to do the same for you)
- Details of deductee i.e. list of employees, vendors or service providers who’s TDS you have deducted, the total amount payable to them and the TDS amount. (Alternatively, you may export the TDS ledger from your ERP which will contain the similar details)
- Only in Quarter 4, if any employee deductees then, detailed Salary breakup (Alternatively, you may share the Salary Sheets / Salary Register maintained)
- TDS Payment Challans
- Your Digital Signature Certificate (DSC) (optional, if you wish to file your returns online)
Timeline & Steps for TDS Return Filing
- You will deduct TDS from payments made or payables to vendors, service providers & employees.
- You will deposit TDS by 7th of every month (amount collected in previous month) and retain challans.
- You will provide the documents / information as listed above to your chosen tax expert by 8th of the month after end of a quarter. (i.e. 8th July, 8th October, 8th January or 8th April)
- You tax expert will go through the details, verify the data and segregate it according to the return to be filed i.e. Form 24Q, 26Q, 27Q, 27EQ or 27D in next couple of days.
- Your tax expert will prepare the Return form and file the same. Your expert will either use your Digital Signature at this stage or ask you to physically sign the TDS Return Form. This return will be filed by 15th of the month (for 4th quarter, by 15th May)
- The returns shall be submitted online or offline. An acknowledgement will be generated.
- Within next 15 days from filing returns, Form 16 or Form 16A shall be generated online.
Documents to be Collected for TDS Return Filing
- Acknowledgement of return filed. You can retain the same as documentary evidence.
- Form 16 for each employee (only in Quarter 4) and Form 16A for all vendors (every quarter). You will have to sign & send the same to your employees or vendors.
Fee for TDS Return Filing and Time required
TDS Returns can be filed within 7 days. The average fees charged for filing TDS returns is INR 1500 per quarter. The criteria for deciding fees & time required for filing return, depends on the number of deductees and types of deductees in your return.
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What is more?
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