TDS is the abbreviation for Tax Deducted at Source is the advance tax paid by entity/individual responsible for making payments of professional fee, contract payments, salary, interests, royalty, and dividends among others as per the appropriate tax slabs to Government on behalf of the payee. It serves as a quick and efficient method for collection of applicable taxes.
The entity/ individual which deducts the said amount is termed as Deductor and the person whose tax is deducted is termed as Deductee. The net amount received by the recipient is after deducting the TDS amount.
A TDS Return filing is thus a statement of all the TDS transactions made during a quarter submitted by the Deductor to Income Tax Department. It shows a summary of the TDS amount collected paid by the Deductor to the Authority. It has the particulars like PAN number of both, the Deductor & the Deductee, the amount paid to the government etc as per the chalaan.
The basic duties of the Deductor are as following:
If a Deductor who is liable to deduct TDS and deposit the same to the Government fails on any of the fronts, shall have to face the consequences. A person who fails to do TDS return filing or does not TDS return filing by the due dates prescribed in this regard has to pay late filing fees as per section 234E and above that a penalty as per section 271H.
It is a sum of Rs. 200 for every day for which such TDS return filing failure continues. The late fees shall not exceed the amount of TDS Return filing. Before the TDS Return Filing, the late TDS return filing fee is required to be deposited.
The assessing officer has the powers to direct the defaulter to pay a penalty which can be minimum of Rs. 10,000 up to the maximum of Rs.1 lakhs. This penalty is in addition to late TDS return filing fees mentioned above.
Apart from delay in TDS return filing, a penalty is also attracted in the event of the incorrect of TDS return file.
TDS return filing is the quarterly submission of the statement to Income Tax Department and is required to be submitted by Deductor. The TDS returns filing filed shall contain the details of total TDS deducted and deposited by Deductor, TAN/ PAN of Deductor and Deductee, challan details etc.
Following are the various types of TDS return filing forms prescribed as per the purpose of TDS:
A signed Form 27A shall be attached with the return statement for the quarterly TDS. It serves as a summary to the TDS deducted and deposited.
As per Section 203 of the Income Tax Act, the Deductor of TDS has to mandatorily provide the TDS Certificate with the required details. Form 16/16A are issued furnishing details of TDS transactions between deductor and deductee, PAN details etc
Even the banks deducting tax at the time of payment of pensions must issue TDS Certificates.
Non-issuance of TDS after the deduction attracts a penalty of Rs. 100 per certificate per day.
TDS certificates are generated by the deductor from TRACES (TDS Reconciliation Analysis and Correction Enabling System), which can be digitally signed.
Thus a Deductor must issue a TDS Certificate to the payee.
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