Introduction
The Indian Taxation Code defines Tax Deducted at Source (TDS) as a sort of advance tax that is taken out of an individual’s or an organization’s profits before the money is actually credited to that entity’s account. By enforcing the TDS laws on both individual and corporate incomes, the government is able to raise money. The Central Board of Direct Taxes is in charge of and oversees TDS rules and regulations under the Income Tax Act of 1961. (CBDT).
The phrase “Tax Deducted at Source” means that the payee or employer withholds the tax prior to making a payment to the recipient, as the name would imply. Both regularly earned income and income earned sporadically or irregularly are subject to tax deducted at source. TDS is therefore applicable to a variety of incomes, including but not limited to interest, rent, professional fees, commission, salary and commission.
Benefits of TDS payment
Since TDS is due on earnings, it’s vital to remember that the obligation to pay TDS only applies in the event that earnings really occur. TDS is subtracted before payments are made. On payments made in cash, check or credit, deductions must be made. The TDS-deducted money is then deposited with additional government organisations.
TDS payment has a number of benefits including the following:
● Tax evasion is stopped by removing TDS at the source.
● Taxes are properly and promptly collected.
● Many people are included in the tax net.
● The government receives a consistent stream of income from TDS collection.
Statement for TDS from Salaries Form 24Q
For the TDS deducted on salary pursuant to Section 192 of the Income Tax Act, 1961, eTDS forms prepared using Gen TDS software are submitted using Form 24Q. The deductor is required to submit this form on a quarterly basis. It contains information like salary paid and TDS withheld from employees by the firm.
There are two annexures included with Form 24Q:
Annexure-I and Annexure-II. The information about the deductor, deductees and challans is included in Annexure-I and the information about the deductees’ salaries is included in Annexure-II.
Both the annexure’s submission deadlines are different. For each of the four quarters of the fiscal year, the deductor must provide Annexure-I, but Annexure-II is not required.
Form 26Q
This form must be completed in order to declare in detail a citizen’s TDS returns. This form is based on their non-salary payments. People who live and work in India and are citizens of India must fill out the declaration form. According to subsection (3) of section 200 of the Income Tax Act of 1961, this form must be submitted. The declaration form can be filled out using the following sections as a guide: sections 193, 194, 194A, 194BB, 194C, 194D, 194EE, 194F, 194G, 194H, 194I, 194J, 194LA, and regulation 31A. Whether the deductor is government or non-government must be specified on the form. PAN citation is required for non-government taxpayers. “PANNOTREQD” must be written on the form in the case of government deductors.
Form 27D
This is a Certificate for tax that is collected at source under Section 206C of the Income Tax Act of 1961. TCS is essentially the tax that the seller collects from the buyer of certain goods when the seller debits the amount payable to the buyer’s account or when the seller receives the amount from the buyer in the form of a check, cash, demand draught, or other forms of payment for selling certain prescribed goods as per Section 206C (1) for the purpose of business and not for personal use. As stated in the form for: Alcoholic Liquor intended for human consumption, TCS is payable.
Form 27EQ – TCS Statement (Tax Collected at Source)
- The quarterly statement of TCS that details the TDS made pursuant to Section 206C of the Income Tax Act of 1961 is referred to as Form 27EQ. It may also be referred to as the Tax Collected at Source Statement (TCS).
- TCS is the tax that the merchant has collected. When a customer buys certain goods or commodities, the seller collects tax from the customer via the TCS method. When the buyer pays with cash, a check, a credit card, a demand draft, or any other kind of payment, this TCS is obtained.
- Every quarter, corporate deductors and collectors must file form 27EQ, and it is required that TAN be provided.
Penalty
● Penalty for filing a late TDS return You will be required to pay a fee of Rs 200 till your return is filed under Section 234E. Until the fine amount equals the amount you are required to pay as TDS, you must pay this for each day of delay.
● Online traces are provided for the 26Q Declaration in the event of Nil Return. However, providing the declaration for nil return is not required.
● If a 24Q return is submitted in one of the quarters but no TDS was deducted in the fourth quarter, the nil return must still be filed.