Tax deducted at source commonly referred to as TDS is the amount of tax paid to the government of India at the time of making any transactions. As per the income tax act, 1961 any individual or any enrolled firm making any payments (such as rent, salary, or commission) should deduct a certain amount of tax at the source. TDS to be deducted according to the relevant rates issued by the income tax department.
The individual or organization which deducts the tax is named as a deductor and the person whose tax is retained is named as a deductee. It is the duty of the person who is making payment to somebody to deduct TDS and file TDS returns. The specified payment can be salary, interest, commission, brokerage, contract payments, etc.
Taxpotter provides expert help all through the TDS return filing process.
TDS is a quarterly document submitted to the income tax department. The deductor must file a TDS return on time. The TDS return should contain details like TAN number, PAN of deductor and deductee, amount of tax paid, TDS challan information, type of payment, etc.
An investment proof must be submitted by the deductee for claiming deductions and in case excess TDS has been deducted then one can file a return and claim a refund from the income tax department.
TDS is filed by organizations or employers having a TAN (tax collection and deduction account number) number. An individual or business is required to file if they fall under the below-mentioned categories
Filing TDS returns provides various benefits to the individuals or businesses such as
Filing TDS returns at the prescribed time helps the government to keep a track of records and reports of an influx of income. Tracking of records also helps to keep a check on tax evasion
It reduces the burden of individuals from paying a huge amount of tax at a time by spreading the amount of tax over. So, the payment is easy.
The amount of tax collected from TDS returns is used for the welfare of the public
It is convenient for both the deductor and deductee as the tax is deducted automatically. It also ensures a steady source of revenue for the government.
It will help the banks to assess your income and repaying capability while applying for loans.
In case you have made any tax-deductible investments, then you can claim refunds by proving the investment proofs.
Following documents are required for filing TDS return
|Quarter||Period||Due date of filing|
|1st quarter||1st April to 30th June||31st July|
|2nd quarter||1st July to 30th September||31st October|
|3rd quarter||1st October to 31st December||31st January|
|4th quarter||1st January to 31st march||31st May|
TDS certificates are issued by the employer (deductor) to the deductee on deducting TDS on their behalf. The certificate contains a 7 digit unique certificate number. On receiving the certificate the employees can check for tax breaks paid by them. Different types of TDS certificates are mentioned below
|TDS on salary||Form 24Q||Yearly|
|TDS payments other than salary||Form 26Q||Quarterly|
|TDS from other sources of income like interest from dividends, savings, fixed deposits||Form 27Q||Quarterly|
|TDS on rent||Form 26QC||Every transaction|
In case any individual or entity fails to file the TDS returns before the due date, they are liable to pay late fees
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