ALL ABOUT BASIC KNOWLEDGE OF TDS BY Amrit

  WHAT IS TDS ?

• Full form of TDS is TAX DEDUCTED AT SOURCE
• TDS is a direct tax hence part of income tax.
• TDS is collected by the people at the time of payment like salary, rent, commission etc.
• The TDS collected is then transferred to central government account.
• The amount of TDS is adjusted against final tax liability of deductee.

WHEN SHOULD TDS BE DEDUCTED & BY WHOM ? 

• Any person making specified payments mentioned under the income tax act are required to deduct tds at the time of making such payment.
•  But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.

DEDUCTOR & DEDUCTEE UNDER INCOME TAX

• The deductor is the person, who deducting the tax. 
• The deductee is the person from whom tax is deducted .

WHEN TDS IS NOT REQUIRED TO BE DEDUCTED ?

• The amount is paid to Reserve Bank of India, government.
• Interest paid or credited to Banking company, LIC, Insurance Company, NSC, KVP etc. 

DUE DATE FOR DEPOSITING THE TDS

• The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month.
• TDS deducted in the month of June must be paid to the government by 7th July.
• However, the TDS deducted in the month of March can be deposited till 30th April. 

HOW TO DEPOSIT OR PAY TDS?

1.       Electronic mode: E-Payment is mandatory for

• A.      All corporate assesses; and
• B.      b) All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961  are applicable.

2.       Physical Mode: By furnishing the Challan 281 in the authorized bank branch 

NOTE:-

• Deductor Tan Number is required at the time of payment.
• There is no need of deductee pan number at time of payment of tds challan.
• Nature of Payment like tds on rent, salaries, commission etc.& assessment year is required.

TYPE OF TDS RETURN & THEIR DUE DATE

• Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS.
• TDS return is to be submitted quarterly
• Details required at time of TDS return filing
• TAN number of deductor, Amount of tds deducted, Type of payment, PAN of deductee etc. 

Form 24Q -TDS on Salary

Q1 – 31st July

Q2 – 31st October

Q3 – 31st January

Q4 – 31st May

Forms 26Q -TDS on All Payment except Salaries

Q1 – 31st July

Q2 – 31st October

Q3 – 31st January

Q4 – 31st May

Form 27Q -TDS on all payments made to non-residents except salaries

Q1 – 31st July

Q2 – 31st October

Q3 – 31st January

Q4 – 31st May

Form 26QB -TDS on sale of property

30 days from the end of the month in which TDS is  deducted

Form 26QC -TDS on rent

30 days from the end of the month in which TDS is deducted

What is a TDS certificate?

1.     TDS certificate has to be issued by deductor to the deductee.

2.     Form 16, Form 16A, Form 16 B and Form 16 C      are all TDS certificates

3.     banks issue Form 16A to the depositor when TDS is deducted on interest from fixed deposits

Form	Certificate of	Frequency	Due date
Form 16	TDS on salary  payment	Yearly	31st May
Form 16A	TDS on non-salary  payments	Quarterly	15 days from due date of filing  return
Form 16B	TDS on sale of  property	Every transaction	15 days from due date of filing  return
Form 16C	TDS on rent	Every transaction	15 days from due date of filing  return

 

What is Form 26AS ?

• It’s statement where deductee can check whether the deductor has been deposited the tds amount to the government on behalf of deductee pan.
• This form is a consolidated tax statement which is available to all PAN holders
• Since all TDS is linked to your PAN, this form lists out the details of TDS deducted on your income  by each deductor for all kinds of payments made to you – whether those are salaries or interest  income – all TDS linked to your PAN is reported here.
• This form also has income tax directly paid by you – as advance tax or self assessment tax. 

1. Form 26AS is a consolidated statement of the taxes you have already paid in the financial year and refunds due to you. You can download the statement from the Income Tax website (or TRACES website – a detailed step-by-step guide is included later in this article). The form includes taxes deducted at source, taxes collected at source, details about deductions on high-value transactions, advance taxes and tax deducted for sale of property among other deductions.
2. Form 26AS is your single source for information on all the tax deductions made on your income.
3. It is important to have Form 26AS handy while filing your tax returns and not just because it makes claiming tax credit easier. Form 26AS is also proof of the TDS deducted by your buyer, bank or employer since it also contains details of the deductors.
4. You must make sure, the claims in Form 26AS match with all the taxes you have paid. There must be no difference in the TDS amount being claimed in your tax return and the TDS amount updated in Form 26AS. 

COMPONENTS OF FORM 26AS

Part A: Tax Deducted at Source (TDS)

This part contains details of tax deductions, including tax deducted on your salary by your employer, on interest income by your bank, on your pension, or rent. If you are in receipt of rent higher than Rs.50,000 a month, then the tenant is required to deduct tax at source before paying the rent to you. These details will also show on your Form 26AS. This section also has the details of the deductors like their TAN and the amount deducted and deposited.

 

Part A1: TDS for Form 15G/Form 15H

When a taxpayer submits Form15G or 15H to prevent TDS from getting deducted, those details are captured in this section of Form26AS. If you fail to submit Form 15G or 15H or if it does not apply to you, you will see ‘No transactions present’ here.  

Part A2: TDS on sale of Immovable Property u/s194 (IA) (for the seller)

When you sell a flat or office or plot, the buyer must deduct TDS from the amount being paid. The TDS on your sale of the property is recorded in this section.

 Part B: Tax Collected at Source (TCS)

This section contains details of TCS or tax collected at source. This is collected by the seller of specified goods at the time of sale. The segment will also have the seller’s TAN details.

Part C: Tax Paid, other than through TDS or TCS like advance and self-assessment taxes

Apart from TDS or TCS, if you have made tax payments in the form of advance taxes or self-assessment tax, those details will show up in this section. You will also find the challan information for the tax deposited here.

Part D: Refunds received

If you have received tax refunds, all the details will be displayed under this section like the assessment year for which the refund has been paid, date of receipt, mode of payment and amount received.

Part E: Details of Annual Information Return Transactions

This section is dedicated to the details of all the high-value transactions made through banks and financial institutions. This information is based on Annual Information Return reported by banks and financers and includes transactions like mutual fund investments, buying or selling of immovable property, and purchase of large value corporate bonds and debentures.

Part F: Tax deducted on the sale of immovable property u/s194IA (For Buyer of property)

As a buyer of property, you must deduct TDS before paying the seller. Details of such transactions appear in this section. The TDS deducted and deposited by you is reflected here.

Part G: TDS Defaults (processing of defaults)

Nothing gets left out in a Form 26AS. Not even the information about the defaults relating to the processing of tax statements, which is mentioned in this section. This section though does not include demands raised by income tax assessment officers.