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TDS Compliances

About This Plan

Tax deduction at source (TDS) was introduced in the Income Tax Act, 1961 to collect tax from the very source of income.

 

As per the applicable law/ notifications/ circulars, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.

 

The deductee from whose income tax has been deducted at source would be entitled to get the credit of the amount so deducted based on Form 26AS or TDS certificate (Form 16/ 16A) issued by the deductor.

TDS must be made when the amount of the payment exceeds the specified threshold limit.

 

Specified payments as prescribed by the Act are:

 

  • Rent
  • Commission
  • Professional fees
  • Salary
  • Interest,
  • contractual service payments,
  • Proceeds of buying a house, etc.

by the people making such payments. 

 

The government with the help of Tax Deducted at Source provisions makes sure that income tax is deducted in advance from the payments being made by you. The recipient of income receives the net amount (after reducing TDS).

 

The recipient will add the gross amount to his income and adjust the amount of TDS against his final tax liability. The recipient takes credit for the amount already deducted and paid on his behalf.  

 

In other words, TDS, as the name implies, aims to imply a method of "Pay as you earn" and "collect as it is being earned”.

 

What are the rates at which TDS is made?

 

TDS shall be deducted at the rates specified in the relevant provisions of the Act or the First Schedule to the Finance Act. However, in the case of payment to non-resident persons, the withholding tax rates specified under the Double Taxation Avoidance Agreements shall also be considered.

 

What are TDS compliances as per the statutory norms?

 

As soon as a Tax deduction at source (TDS) is made, an entire process-chain of the following events start:

 

  • Deposit TDS with Government: After making Tax deduction at source (TDS), a deductor is required to deposit TDS with the government within a specified time frame (Month-wise due dates have been mentioned below)

 

  • File TDS Return: The deductor is also required to file a TDS return(s) (Quarterly) where he/she declares the financial details of all the deductees for whom TDS has been made during a quarter.

 

  • Updating 26AS: When the government receives the amount of TDS, Form 26AS of the deductee gets updated with Tax deposited details.

 

  • Issuance of TDS Certificates & ITR Filing: After that, when the deductee (or payee) files ITR in the relevant financial year, he/she considers his Form 26AS and claims the credit of TDS available in it.

TDS PAYMENT DUE DATES:

TDS RETURN FILING DUE DATES:

 

Penalties associated with TDS deduction?

 

  • For non-deduction of TDS

If a deductor/collector fails to collect the tax at source, the whole of such expenses can be disallowed from the computation of total profits by the income tax assessing officer under section 40(A)(3) of the Income Tax Act, 1961

 

  • For late-deduction of TDS

In case the tax at source is deducted after a day or few days of making the payment of income, then simple interest at the rate of 1% per month on the amount of tax deducted at source will be levied.

 

  • For late-payment of TDS

As mentioned above, there is a monthly due date for depositing the TDS so collected, to the government. If the deductor fails to do so, they have to pay simple interest on the amount deducted as tax at the rate of 1.5% per month.

 

  • For late-filing of TDS Returns

If the deductor fails to furnish the TDS return on or before the specified due date, he shall be liable to pay a penalty of ₹ 200 per day till the date of default. Please note that the total amount of such a penalty cannot exceed the total amount of tax deducted at the source.

 

  • For non-filing of TDS Returns

If the deductor fails to file a TDS return within the due date, then the assessing officer may charge a penalty ranging from ₹ 10,000 to ₹ 1 lakh.

How It's Done

Once you have opted for SSI’s TDS compliance package, a highly experienced professional, from our team is allotted to you, who in turn takes care of the following:

 

  • Registration of your entity on TRACES Portal

  • Reconciliation of TDS payable as per Books of accounts with actual challans for payment of TDS to the credit of the central government,

  • Form 24Q/ 26QB/ 26QC/ 26EQ

  • Bulk PAN Verifications

  • Challan Verifications

  • Online FVU Generation and Submission

  • Filing of TDS return(s)

  • Form 16/ 16A Generation

Information Guide

Documents To Be Submitted

  1. Details of deductor
  2. Details of the responsible person
  3. Details of deductee
  4. Challan details
  5. Deduction details

FAQs

What is form 26Q?
Form 26Q is applicable for TDS under Section 200(3) of the Income Tax Act, 1961 under Sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194F, 194G, 194H, 194I and 194J. It is a statement for tax deducted at source on all payments except salaries. A deductor must submit his TAN (Tax Deduction Account Number) to submit the Form 26Q.

Non-government deductors must quote the PAN, whereas, government deductors must quote “PANNOTREQD” on the form.
What is TDS in salary and other payment?
TDS, or Tax Deducted at Source, is a type of tax levied by the Indian government wherein taxes are collected based on 'pay as you get'. The taxes are deducted at the source of payments such as salary paid to an employee or other payments like commission earned by a broker.

The taxes are deducted by the employer before making the payment to the employee and are deposited with the govt. The employer later issues form 16 to its employees and form 16B to other deductees which serve as proof of tax payment in their hands.
Is revised return covered under the plan?
Revised return filing on account of incorrect information provided by the assessee during the original return filing shall not form part of the plan.
Do all deductors require to quote their PAN?
It is compulsory to quote the PAN for non-Government deductors whereas In the case of Government deductors, "PANNOTREQD" has to be mentioned on the form.
Is their any interest and penalty for non or late filing of Form 24Q & Form 26Q?
In case you have not deposited TDS by the due date, the following penalties are applicable:

Late filing fee (if you do not file by the deadline)
Interest (if you do not deposit the TDS amount in time)
Penalty (if TDS is not filed within one year of the due date)
Is there any minimum amount upto which tax is not deducted on salary payment?
If the expenditure incurred/payment made during the year is below the threshold limit, then there is no requirement to deduct tax at source. If net taxable income is less than maximum amount which is not chargeable to tax

Rs. 2,50,000 for an individual
Rs. 3,00,000 for Senior Citizens
Rs. 5,00,000 for Super Senior Citizens
Price ₹3,500.00

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