To intensify the liquidity in the hands of the general public and battle COVID-induced economic misery, the government has proclaimed various relief policies on 13 May 2020. One of these was a concession in the ‘tax deducted’ at source (TDS) and ‘tax collected’ at source (TCS) rates slabs by 25 % scheduled for non-salaried payments. Non-salaried payments comprise interest received on (FDs) fixed deposits, dividend income, etc., for numerous payments.
- TDS return filing shows every tax collection by the Income Tax Department of India, whenever you make any transaction or purchases. It has information such as PAN, TAN particulars of both, the Deductor and the deductee, the tax paid to the government, and TDS challan details, etc.
- TDS stands for tax deducted at source. TDS is an advance tax, which has to be paid beforehand by every employee and employer. It is considered to be a fast and organized way of tax payment.
- Any bodies or any individual which generally involves them-self in the payment of salary, contracts, interests, professionals, dividends, etc., making the TDS deductions rendering to the slabs they fall into, which are pre-decided by the management. Here we have delivered complete notifications related to the Income Tax and TDS provisions as per the authorized government laws. We embrace all the latest updates in Income Tax and TDS, news, amendments, and circulars as on the government gateway for your knowledge.
What are the Points to Be Taken into Consideration by the Person while Deducting the Tax at Source?
- The first and foremost step is to procure the Tax Deduction Account Number (TAN). TAN has to be mentioned in all the related documents and communication related to the TDS.
- The amount deducted under the TDS returns by the payer has to be according to the slabs decided by the Income Tax Department and must be filed within the specific timelines to avert the penalty. The deductee receives the TDS certificates for every TDS return filing over every period.
What are the Details on Filing of Return (Q4) & TDS Deposit for March, 2020?
On 31.03.2020, the ordinance on “Taxation and Other Laws (Relaxation of Certain Provisions), 2020” have alerted relief measures related to GST compliance, Income Tax return filings, PAN-Aadhar linkage and added statutory and regulatory subjects. Income Tax Act 1961 also shields under the Stated Act as per Para 2 of the ordinance given.
TDS Return (Q4) Filing Extended date
- According to Para 3(1), (b) the Ordinance, time limit for completion shall stand extended to the ‘30th of June 2020’ where any border has been quantified in specified Act which falls throughout the period from 20th day of March 2020 to 29th day of June 2020. Under the provision of specified Act, it is for the compliance for furnishing returns.
Tax deducted Interest for late deposit
- Interest shall be charged in respect of such amount for the specific time of delay not exceeding three-four percentage (.75%) for every month, where any due date has been itemized under the stated Act for payment of any tax amount which falls during the period from ‘20th day of March 2020 to 29th day of June 2020’ not been paid on or before 30th June 2020.
- As a consequence, it is clear that despite the fact that date of TDS filing which is 31st May is postponed till 30th June 2020, postponement in deposit of TDS will be questioned to interest at rate of 75% for every month of delay.
What is the TDS Rate Chart for Assessment year 2021-22?
- Honorable Finance Minister has stated in the press release that tax collected at source rate and the TDS rates for all ‘non-salaried’ payment to residents will be concentrated and reduced by 25 % of the specified rates for the outstanding period of Financial Year 2020-21. This will deliver liquidity up until the amount of Rs 50, 000 Cr.
- Afterward, this press release has raised many doubts regarding TDS rates as well as sections in which this reduction will be relevant. However, amendments taken place by Finance Budget, 2020 includes two New TDS Sections.
- Those are Section 194K and Section 194O. These sections provide TDS on ‘Mutual Fund Income’ and TDS on ‘E-Commerce Transactions’. At hand, there were also deviations in few existing sections of TDS which contains amendments in Section 194J by which TDS on ‘Technical Services’. It has also been reduced to 2%.
TDS Rate Chart for Assessment year 2021-22
- Amended rates has displayed on the basis of PIB Notification dated 13.05.2020. However, no announcement in this regard is been informed by the Central Board of Direct Taxes.
What are the Steps to Be Followed While Filing the TDS Return?
TDS Return filing forms, which need to be filled to pay the taxes.
- FORM 24Q – It requires you to fill the details regarding the tax deductions at source from salary
- FORM 26Q – This form requires you to mention the details of tax deduction from all the sources except salary
- FORM 27Q- Here you present all the tax deductions from other sources of earning. For example dividend funds, interests from savings or fixed deposit, any sum payable to non-residents, etc.
- FORM 27EQ- It is the statement collected at the source.
How to Not Attract the Penalties in TDS Return Filing?
TDS Return Filing has certain due dates, which need to be followed to save you from the fines for the late submission of TDS. If you fail to do so, following the charges and consequences you have to face.
- Late Tds Return Filing Fee as Per Section 234e
- You will be imposed with a fine per day and the late fees shall not exceed the TDS Returns.
- If you have missed the date of filing TDS returns, then you will be asked to pay the fine before filing the TDS return for Penalty Under Section 271h
- The assessing officers have the power to ask the defaulters to pay the extra fine, apart from late payment fees. This may vary from ten thousand rupees to one lakh rupees. The Penalty will be imposed if you make a mistake while your TDS return filing or make the wrong entries.
Dates Due for Deposit TDS
- 7th of succeeding month
- 30th April- For the month of march
- 30 days from the end of the month in which TDS is deducted-For Rent and Acquisition of Property
TDS Return Due Dates
Before moving into the TDS Rates Chart for F.Y. 2020-21 / A.Y. 2021-22, know all the TDS return due dates:-
|Due Dates||Transactions||Form No.||Period|
|TDS on all payment except salaries||Form 26Q||Q1, Q2, Q3, Q4|
|TDS on Salary||Form 24Q||Q1, Q2, Q3, Q4|
|–||TDS on Sale of Property||Form 26QB||30 days from the end of the month in which TDS is deducted|
|–||TDS on Rent||Form 26QC||30 days from the end|
What is meant by TDS on salary and its new income tax rates?
- According to the income tax department, an employee can change the selection of tax arrangement at the time of filing income tax return, and TDS rates will get accustomed accordingly
- The income tax department has enshrined new clarifications for those who wish to choose for new tax rate slabs. As publicized in Budget 2020, the lower income tax rates have come into operation from April 1, 2020.
- Giving options to individuals to choose between the two, the old tax slabs will also endure to remain in effect. Tax specialists say that the individual will have to give up on a lot of deductions that could benefit to reduce taxable income even if they get to select the new tax regime or the old one, influenced on a case-to-case basis as under this new lower tax rates.
The Income Tax Rates are as follows:-
Clarifications from Income tax department
- Employees who do not have income originated from business or profession, they need to inform their employers. They should state their intention to opt for the new tax regime for determination of deduction tax at source or TDS from regular incomes.
- The employee will remain to be taxed at the older slabs present in the IT Act if such option is not worked out by an employee,.
- TDS purpose will be related for the year can’t be modified once it has intimated to the employer about the intent to opt for the new reduced tax rates.
- Moreover, “the deductor” shall calculate his total income and make TDS (tax deducted at source) thereon concerning the provision of ‘Section 115 BAC’ of the Income Tax Act. According to the Income Tax department, if such allusion is not made by the employee, the employer will make TDS without seeing the provision of Section 115 BAC of the Act,”
- Therefore, now, it’s clear that the employee who not having income from business or profession cannot modify the option once exercised for the intention of getting TDS deducted. However, they can always change it at the time of filing the tax return.
What is the notion of rate slabs for NRIs concerning Tax Deducted at Source?
- According to the government announcement, the advantage of lower TDS and TCS rates can only be accessible by resident individuals. It cannot concede the same and not available to non-resident Indian (NRI) taxpayers.
- Central Board of Direct Tax further explained that TDS on the amount paid or credit throughout the period from ‘May 14, 2020, to March 31, 2021’, shall be deducted at the reduced rates. In the same way, the tax on the amount received or deducted during the time frame from 14th May 2020 to 31st March 2021 will be composed at the reduced rates.
- NRIs need to prudently consider the entire Indian income and plot their travel itinerary grounded on the amendment for their period of stay. Point to be noted that, it is a positive change in some essential cases where NRIs can remain staying in India for up to 181 days in the financial year.
- On the other hand the period of stay in India is 120 days or for 365 days or more in preceding 4 years. In case of Indian citizens who are not tax residents of further country are deemed to be tax residents of India, thereby the status would be ‘RNOR’ and henceforth foreign income shall not be chargeable in India.
If you think that, you are running out of time, taking too long, or don’t know how to file your TDS return and want to make sure that you are filing your TDS return in the perfect manner. Then don’t you stress yourself over these tax-related issues. Just pick up your phone and give us a call. Here at CorpBiz, we will help you with the consultation, consolidation of documents required to file the TDS Return from preparation until the end of filing the returns.
Read our article:TDS Returns Filing: Due Dates and Procedure for Filing