TDS Filling
Brief overview of TDS
TDS or Tax Deducted at Source is a Direct tax levied at the time of booking of an expense or making payment against that expense (whichever is earlier). However, not all expenses attract TDS provisions. There are certain common type of expenses on which TDS is required to be deducted and these are:- - TDS on Salary (Employer is required to deduct TDS from Salaries of Employees whose income exceeds the tax limits. TDS on Salary is Calculated and deducted on Avg. Basis. - TDS on Payments made to Contractors/Job Workers (@1% or 2%) (Limit-Rs 30,000 & 1 Lakhs) - TDS on Professional/Consultancy Charges (@ 10%) (Limit-Rs 30,000) - TDS on Rental Payments (@ 10%) (Limit-Rs 2,40,000) - TDS on Sale of Immovable Property (@ 1% of Sale Consideration) (Limit- 50 lakhs) - TDS on Commission/Brokerage (Insurance Comm./Sales Comm. Etc) (@ 5%) - TDS on winnings from Lotteries, Fantasy Sports like Dream 11 or Prize from Reality Shows etc. (@ 30%) - TDS upon payment of the transfer of virtual Digital Assets (@ 1%), Newly Introduced by Union Budget 2022
Hence, Any person upon whom TDS provisions are applicable, should apply for TAN No (i.e. Tax Deduction Account No.). TDS is required to be deducted and deposited to Govt. by the 7th of every month (For April to Feb Months) and up to 30th April (for TDS deducted during the Month of March). Any delay beyond the specified time period will result in levy of Interest @ 1.5% per month.
TDS returns are required to be filed on quarterly basis in forms 24Q (TDS on Salary), 26Q (TDS on other than salary payments). These are the two most commonly filed TDS Returns. Any delay in filing of TDS returns attracts late fee of Rs 200 per day (Maximum late fee capped upto the amount of tds for the quarter).
After filing of TDS returns, the next step is Issuance of TDS forms quarterly in Form 16A (for Deductees other than salary) and Annually in form 16 (for Salary Deductees), Form 16B (For TDS on Sale of Property) and in form 16C (for TDS on Rent).
TDS is deducted and deposited against the PAN of payee/deductee and such payee/deductee can confirm the TDS from his form 26AS once the TDS returns are filed by the deductor and such person can also claim refund (if any) of excess TDS by filing Income Tax Return at the end of the financial Year.