Created on 21 Aug 2018
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Updated on 11 Sep 2022
TDS means Tax Deducted at Source. It is the tax which is deducted from income, interest on securities, rent payment, payment of commissions etc. The full form of TDS makes its meaning quite clear that TDS is such type of tax which is deducted at the very source of it. For example, if a bank has to pay a certain amount of interest to a person who has an account in that bank, then the person is going get such interest with a deduction of a certain amount, that deduction will be the TDS. In this example, the deductor is the bank and the deductee is the account holder. Deductor has to file this TDS to the Govt.
Features of TDS
1. Tax deduction is done at the source only from where such income or payment is received.
2. It is an easy method of collection of tax.
3. It is more beneficial for the deductee as he need not to file a separate return for the same and the tax is deducted conveniently from the source.
4. Deductor needs to file a TDS return.
5. TDS certificate is also issued whenever TDS has been collected.
6. In some cases, TDS is not deducted, and exemption is provided. For instance, in case of payments made to Govt., RBI and also in various kinds of interest payments such as interests which are paid under Direct tax etc.
7. There are also certain due dates for TDS payment.
Advantages of TDS
1. Less responsibility on the tax payer.
2. Less scope of tax evasion.
3. Easy and convenient way to pay tax.
4. Good source of revenue for the Govt.
Requirement for a TDS Filling
One who has collected TDS has to file a return and following are the documents which are required for such a return:
1. Amount of TDS which is deducted, and which is deposited.
2. PAN of both the deductor and the deductee.
3. Details regarding tax which is paid to the Govt.
5. TDS challan information is also required.
6. Tax deduction account number (TAN) is also necessary and all bank account information.
7. Tax Deduction Certificate is another document which is required.
The above documents are some general documents which are required for filing a TDS return but there can be some more documents required according to the type of TDS one is paying.
The form needs to be filled with some other important information regarding name, address etc. of the deductor.
Charges for filing a TDS return depends upon the number of deductees.
Returns of having up to 100 records (of deductees) will be around Rs.30.
Returns of having up to 100 to 1000 records (of deductees) will be around Rs.200.
If there are more than 1000 records (of deductees) then the cost will be around Rs.600.
Moreover, if a person files a late return then he will be fined Rs.200/day but the amount of the fine should not exceed the amount which was deducted.
If a person does not file a return, then he will be fined by an amount of not less than Rs.10,000 and not more than Rs.1,00,000.
Process and Steps Involved
TDS can be filed in two ways:
1. It can be filed on tin-nsdl.com in the RPU (Return Preparation Utility) section.
2. The return has to be filed accordance with the file format according to the clean text ASCII format with 'txt' as filename extension.
3. After that file should be verified using the File Validation Utility (FVU) provided by NSDL (National Securities Depository Limited). In case of any errors, it will be notified by FVU and then that should be rectified.
4. Then the file should be submitted at TIN-FC or can also be uploaded at http://incometaxindiaefiling.gov.in/ website.
For filing the return online, it is necessary to keep all the documents as mentioned above.
This return can also be filed offline by going to the TIN-Facilitation Centre which are managed by NSDL. The form need to be filled and if accepted then the person who has filled the form will get a receipt as an acknowledgment of the same.
The TDS should be filed according to the due dates which are the following:
Quarter Quarter Period TDS Return Due Date
1st Quarter 1st April to 30th June 31st July
2nd Quarter 1st July to 30th September 31st Oct
3rd Quarter 1st October to 31st December 31st Jan
4th Quarter 1st January to 31st March 31st May
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