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  7. TDS Return Filing - How to File TDS Return Online?

TDS Return Filing: How to File TDS Return Online

Updated on: 07 Nov, 2024 04:00 PM

TDS stands for "tax deducted at source. It is a system implemented in India for the government to collect taxes at the time of certain payments such as salary, interest, rent, etc. TDS is deducted by the payer and deposited with the government on behalf of the payee. TDS (Tax Deducted at Source) return filing is a process in which a person or entity that deducts TDS is required to submit a statement containing details of the TDS deducted and deposited during a particular period.

Budget 2023 Updates

  1. Section 194BA, TDS on income from online gaming: The budget for 2023 introduced TDS (tax deducted at source) on income from online gaming under Section 194BA. This means that any winnings or income earned from online gaming platforms will be subject to TDS at the applicable rate ( 30% of the net winnings at the end of the financial year or at the time the user withdraws the same).
  2. Section 196A - TDS benefit for non-residents earning from mutual funds: Effective from April 1, 2023, non-residents earning income from mutual funds in India can provide a Tax Residency Certificate to avail the benefit of TDS as per the rate specified in the tax treaty between India and their respective country, instead of the standard rate of 20%.
  3. Section 192A - TDS rate reduction on PF withdrawal without PAN: Section 192A was amended to reduce the TDS rate by 10% on Provident Fund (PF) withdrawals for employees who do not have a PAN (Permanent Account Number). The TDS rate has been lowered to 20% from the previous maximum marginal rate.
  4. Section 193 - TDS on interest from listed debentures: The budget 2023 eliminated the exemption from TDS on interest earned from listed debentures. This means that tax must now be deducted at source on the interest income from such specified securities.
  5. Section 194N - Increased TDS threshold on cash withdrawal by co-operative societies: From April 1, 2023, the budget increased the TDS threshold on cash withdrawals made by co-operative societies. Tax will now be deducted on cash withdrawals exceeding Rs 3 crore, as opposed to the previous threshold of Rs 1 crore.
  6. Section 194R - Clarification for deductibility of TDS on benefits or perquisites: In the Budget 2023, it was clarified that the TDS is to be deducted whether the perquisite or benefit is in cash or in kind or whether it’s partly in cash and partly in kind.

Contents

What are TDS returns?

TDS, or Tax Deducted at Source, is an advanced tax deduction system specially designed and presented by the Income Tax Department of India. The methodology behind this system is to deduct a certain percentage of tax at the payment source.

As per the Income Tax Act, any individual or registered firm making the payment must deduct a certain percentage of the amount as tax at the source, provided that the amount is more than the pre-fixed threshold limits. TDS can only be deducted according to the relevant rates the Income Tax Department issues. The first party (the individual or firm making the deduction after payment) is the deductor, and the second party( individual or firm receiving the amount after the deduction) is the deductee. TDS will be deducted regardless of the mode of payment.

The deductor must submit the TDS return to the Income Tax Department on time as a quarterly statement. The requirements are:-

  • Permanent Account Number (PAN of the deductee).
  • A summary of the tax paid to the government.
  • Challan information of the TDS
  • Various other mandatory documents as per the requirements

Please refer to the sample scenario for a better understanding:

  • Type of payment – Professional Fee
  • Rate of TDS deduction – 10%
  • Deductor - M/S ABCD Ltd. Company
  • Deductee – Ms. QWERTY

M/S ABCD Ltd. Company is liable to pay Rs. 50,000/- to Ms. Qwerty as her professional fee. In this scenario, the deductor must deduct Rs. 5,000/- (10% of Rs. 50,000/-) and pay the deductee of Rs. 45,000. The amount deducted, i.e., Rs. 5,000/-, will be credited to the Government account by the deductor.

Eligibility Criteria for filing TDS?

An employer or firm that possesses a valid TAN (Tax Collection and Deduction Account Number) can file a TDS return. An individual who makes specialized payouts under the Income Tax Act is supposed to deduct TDS and is supposed to deposit the same within the specified time towards the below-mentioned payments –

  • Payment of remuneration or salary.
  • Payment towards National Saving Schemes and other similar schemes.
  • Payment of the insurance commission
  • Income from horse racing.
  • Income from the Lottery, puzzles & others.
  • Income by way of “Income on Securities”

What is the Rate of TDS Deduction?

Brief Overview of all the TDS Provisions for F.Y 2022-23 (2023-24)

S.No TDS Section Nature of Payment Payer (Deductor) Payee (Deductee) Rate of TDS Exemption Limit (No TDS to be Deducted upto threshold limit mentioned)
1 Section 192 TDS on Salary Any Person Employee(R or NR) Applicable Income Tax Slab Rates The basic GTI exemption limit is Rs.250000, Rs.300000, or Rs.500000, as the case may be.
2 Section 192A TDS on Premature Withdrawal from Provident Fund Any Person Employee 10% (If no PAN, then MMR, i.e., 35.535%) The amount is less than Rs.50000
3 Section 193 TDS on Interest on Securities Any Person Any Resident Person 10% Upto Rs.5000 in a financial year (FY) for Individual/HUF in the case of Debentures.
4 Section 194 TDS on Dividends Domestic Company Resident Person 10% Upto Rs.2500 in an FY (for Individuals)
5 Section 194A TDS on Interest (Other than Interest on Securities) Any Person(Other than Individual/HUF not liable to tax audit in last PY) Resident Person 10% Up to Rs.10,000 (for payments made by banks, cooperative banks, or on post office deposits) and up to Rs.5000 (for other cases). [In the case of a senior citizen, the limit of Rs 10,000 shall increase to Rs. 50,000 w.e.f. 1.4.2018]
6 Section 194B TDS on Winnings from Lottery or Crossword Puzzles Any Person Any Person 30% Up to Rs.10000
7 Section 194BB TDS on Winnings from Race Horses Any Person Any Person 30% Up to Rs.10000
8 Section 194BA TDS on winning from Online Games Any Person Any Person 30% Up to Rs.10000
9 Section 194C TDS on Payment to Contractors Any Person(Other than Individual/HUF not liable to tax audit in last PY) Any Resident Person
  • 1% (for Individual/HUF)
  • 2% (other person)
  • Up to Rs.30000 for individual payment.
  • Up to Rs.100000 for the total amount during an FY.
10 Section 194D TDS on Insurance Commission Insurance Company Resident Agent
  • 10% (if deductee is company)
  • 5% (if the deductee is a resident person other than a company)
 Up to Rs.15000 during FY
11 Section 194DA TDS on Payment in Respect of Life Insurance Policy Any Person Any Resident Person 5% up to Rs.100000
12 Section 194E TDS on Payments to Non-Resident Sportsmen or Sports Association Any Person NR-
  • -Sportsmen
  • -Sports Association
  • -Entertainer
  • 20.8%
  • (20%+HEC@4%)
 No exemption limit.
13 Section 194EE TDS on Payment for Deposit Under NSS Any Person Any Person 10% Upto Rs.2500
14 Section 194G TDS on Commission on Sale of Lottery Tickets Any Person Any Person 5% Upto Rs.15000
15 Section 194H TDS on Commission or Brokerage Any Person(Other than Individual/HUF not liable to tax audit in last PY) Any Resident Person 5% Up to Rs.15000
16 Section 194I TDS on Rent Any Person(Other than Individual/HUF not liable to tax audit in last PY) Any Resident Person
  • 2% (on rent paid for the use of machinery, plant, or equipment)
  • 10% (other cases)
 Up to Rs. 240000 during the FY
17 Section 194IA TDS on Payment on Transfer of Immovable Property (Not Being an Agricultural Land) Any Person (Other than a person referred to in Section194LA) Any Resident Person 1% Less than Rs.50,00,000
18 Section 194IB TDS on Payment of Rent by Certain Individuals or HUF Individual & HUF(Other than covered u/s 194 I) Any Resident Person 5% Upto Rs.50000 per month
19 Section 194 IC TDS on Payment Made Under Specified Agreement Any Person Any Resident Person 10% No exemption limit
20 Section 194J TDS on Fees for Professional or Technical Services Any Person(Other than Individual/HUF not liable to tax audit in last PY) Any Resident Person
  • 10%
  • 2% (in case of payment of fees for technical service{not being a professional service} or made to the business of operating a call center or royalty paid for sale, distribution, or exhibition of cinematographic films.
 Up to Rs.30000 during FY (the separate limit for each kind of payment)
21 Section 194LA TDS on Payment of Compensation on Acquisition of Certain Immovable Property Any Person Any Resident Person 10% Upto Rs. 2,50,000
22 Section 195 TDS on Other Payments Made to NR (Not Company) or Foreign Company Any Person NR or Foreign Company Rate as specified in Act or DTAA No exemption limit
23 Section 194O TDS on Payments Made to E-commerce Participants An e-Commerce operator An e-Commerce participant 1%(Gross amount of sale) Rs 5 lakh is set only for resident individuals and HUF who have furnished PAN or Aadhaar to e-commerce operators.

*R means Resident, and NR means Non-Resident

**Note: In the above table, unless another rate like MMR is specified, if PAN is not available, then the TDS rate will become 20%.
Also, now you can easily compute actual TDS for many sections using our Online TDS Calculator Tool, which is FREE.

Due Dates to File TDS Returns

Quarter Duration of Quarter Due Date for TDS Return
First Quarter April 1st to June 30th 31st July 2023
Second Quarter July 1st to September 30th 31st October 2023
Third Quarter October 1st to December 1st 31st January 2024
Fourth Quarter January 1st to March 31st 31st May 2024

*All sums deducted are as per the provisions mentioned under Chapter XVII-B and should be deposited by the 7th of the subsequent month. The tax deducted during the month of March 2024 should only be deposited by 30th April 2024.

Forms for Filing TDS

There are different types of TDS return forms, depending on the purpose of the deduction:-

Particulars of the payment Form No.
TDS on Salary Form 24Q
TDS when the deductee is an International Firm or Non-Resident Indian(NRI) Form 27Q
TDS on payment made for transferring any immovable property Form 26QB
TDS for Others Form 26Q

Documents Required for TDS Return Filing

Prior to filing your returns, please make sure you meet the following criteria:

  • PAN (Permanent Account Number): The PAN of both the deductor (person/entity deducting TDS) and deductee (person/entity from whom TDS is deducted) is required for TDS return filing. Please ensure you have linked your Aadhaar card to the PAN card so you can upload your returns via EVC.
  • TAN (Tax Deduction and Collection Account Number): The TAN of the deductor is essential for TDS return filing. TAN is a unique 10-digit alphanumeric number allotted by the Income Tax Department.
  • TDS Certificates: Collect TDS certificates (Form 16, 16A, 16B, etc.) issued by the deductor for each deductee. These certificates contain details of the TDS deducted, such as the amount, nature of payment, and tax deposited.
  • Challan details: Maintain records of the challans used for depositing TDS. This includes details such as the BSR (Bank Serial Number), date of deposit, challan serial number, and the amount deposited.
  • Deductee details: Gather information about the deductees, including their PAN, name, address, and the amount of TDS deducted.
  • Nature of payment: Determine the nature of payment for which TDS has been deducted, such as salaries, interest, rent, commission, professional fees, etc.
  • TDS rates: Have access to the applicable TDS rates for different types of payments. These rates are specified by the Income Tax Department and may vary based on the nature of the payment and the deductee's status.
  • Quarterly TDS statements: Maintain quarterly TDS statements, such as Form 24Q, 26Q, 27Q, or 27EQ, depending on the type of deductor and deductee. These statements contain consolidated details of TDS deductions made during the quarter.
  • Digital Signature Certificate (DSC): In some cases, a digital signature may be required for the online filing of TDS returns. A DSC is a secure digital key that verifies the authenticity of the person filing the return.
  • Other relevant documents: Keep other supporting documents related to TDS deductions and payments, such as agreements, contracts, invoices, and any correspondence with the deductees or the Income Tax Department.

How to File TDS Return Online?

  • Visit the official e-filing portal
  • Enter your login credentials and press Enter. (Please note, your TAN would be your user ID.)
  • Once you log in to the portal, click the Upload TDS tab under the TDS button.
  • Upon clicking the TDS button, a form will pop up asking you to enter your details, such as– TAN, FVU Version, Financial Year, Name of the Form, Particulars of the Quarter, and Upload Type. Once complete, press validate.
  • You can validate the form using a Digital Signature Certificate (DSC) or an Electronic Verification Code.
  • Once you are done with form validation, submit the form. If you have entered all the information correctly and the form is accepted, you’ll get a provisional/acknowledgment token number. In case the form is not accepted, you will be provided with a non-acceptance memo along with the reasons for it.

Advantages of filing TDS Returns?

As a salaried employee, TDS will be deducted from the salary if the desired criteria are met. And the amount deducted mainly depends on how much you earn. Regarding the benefits of tax deductions, both the taxpayers and the government get benefit.

  • It prevents taxpayers from avoiding paying taxes.
  • It ensures that the source of the government’s revenue remains steady.
  • It widens the base tax collection.
  • The of TDS system is convenient for both the deductee and the deductor because the tax is deducted automatically.
  • It reduces the burden of paying huge amounts of taxes. By spreading the total amount of tax over months, the payment becomes easy.

Frequently Asked Questions

Q- What if the return was not filed within the stipulated time?

As per Section 234E, if the assessee fails to file their TDS return within the stipulated time, then you are liable to pay a late fine of Rs. 200/day until you file the same. Please note that the total amount for the penalty cannot be more than the TDS amount.

Q- What is the outcome if TDS return is not filed?

In case you have not filed the TDS return within 1-year from the stipulated period, you are liable to pay a penalty. The penalty range is between Rs. 10,000/- to Rs. 1,00,000/-. It is also applicable to an assessee who has produced incorrect information during the filing process.

Q- What is the outcome if an error is found in the form post-filing

In case an error is detected in the form post-submission, such as incorrect PAN, no submission of PAN details, or an incorrect challan number, then the amount deposited to the credit of the government will not be shown in Form 16, Form 16A, and Form 26AS. To confirm and ensure that the amount is credited to the relevant account and is shown in Form 16, Form 16A, and Form 26AS, you must file a revised return.

Q- Steps to File a Revised TDS Return

Possible corrections to be made:

  • C1 – The name and address of the deductor can be revised.
  • C2 –The challan details, such as challan number, tender date of the challan, serial number, BSR code, and others, can be rectified.
  • C3 – You can revise or add the details of the deductee.
  • C4 - You can revise, delete, or add the details of the deductee’s remuneration.
  • C5 – The PAN number of the deductee or the employee can be updated/revised.
  • C9 – You can add a new challan and the information of the employee or deductee.

Q- How many times can you file a revised TDS return?

You are allowed to file a revised return multiple times if you have to make any.

Q- Requirements to file a Revised TDS Return

You are allowed to file a revised return if the said authority, i.e., accepts your first or original return, which is the central system of the TIN. You can confirm the status of your return online. To confirm the status, you must provide the following details – PAN and Acknowledgement number on the NSDL website. https://onlineservices.tin.egov-nsdl.com/TIN/JSP/tds/linktoUnAuthorizedInput.jsp,.

You need to prepare your revised return using the TDS statement. You can download the same from https://www.tdscpc.gov.in/app/login.xhtml. You must provide the token number or provisional receipt of the original statement to download the consolidated TDS statement.

Q- What is a TDS refund

During the evaluation of the total tax liability at yearend, there is a possibility of a difference between the total amount deducted and the actual tax liability. The possible outcomes would be:

  • If the TDS is more than the actual tax liability, you can get a TDS refund.
  • If TDS is less than the actual tax liability, you must pay the difference amount.

Q- Steps to Verify TDS refund

The status of your refund can be verified by: –

  • Check the acknowledgment sent to the inbox of your registered email address.
  • Entering your PAN details at https://incometaxindiaefiling.gov.in/ or call the toll-free number - 1800-4250-0025

Q- What is the TDS refund period?

The excess TDS you paid is refundable. However, the time period of the refund varies from case to case and depends on whether you have filed your IT returns during the stipulated time. If you have filed the return on time, then you can expect a refund to be credited to your account within 3 months to 6 months.

Q- What is the interest rate on the TDS refund?

As per the Income Tax Act, 1961, section 200A, if the IT department of India fails to make the TDS refund within the stipulated time period, you are entitled to get an interest rate of 6% per annum on the refund amount. The interest will be calculated from the first month of financial year, i.e., April. However, no interest will be offered if the amount is less than 10% of the actual tax liability.

Q- Do scenarios arise where TDS is not deducted?

Yes, there are certain scenarios where TDS is not deducted. i.e., when you pay the Reserve Bank of India (RBI) or the Government of India. It includes the following scenarios –

  • Payments made towards LIC, cooperative societies, and other insurance corporations.
  • Payments are made to the institutions that come under the no-TDS segment.
  • Interest is paid in the NRE account.
  • Payments made towards State or Central Financial Corporations.
  • Interest received in the NSC, Indira Vikas, and KVP schemes.
  • Refunds made by the IT department

Q- What are TDS Forms?

Following are the TDS Forms:

  • Form 15G (for resident citizens below 60 years and HUF)
  • Form 15H (for resident senior citizens aged 60 years or above)

These forms are used when a specific income exceeds the threshold limit specified under individual sections, but your overall income remains within the basic exemption limit.

Q- What is TDS return utility?

The TDS Return Utility is a software tool provided by the Income Tax Department that helps taxpayers prepare and file their TDS (Tax Deducted at Source) returns electronically. It simplifies the process by providing a user-friendly interface and automated calculations, ensuring accurate and timely filing.

Q- What is TDS RPU latest version?

The latest version of the TDS Return Preparation Utility (RPU) is version 5.3, which was released on October 4, 2024.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.