Tax Deducted at Source
Introduction
The concept of Tax Deducted at Source (TDS) was introduced to collect taxes directly from the source of income. Under this concept, a person (deductor) responsible for making specified payments to another person (deductee) is required to deduct tax at the source and remit the amount to the Central Government. The deductee, from whose income tax has been deducted at source, can claim credit for the deducted amount based on Form 26AS or the TDS certificate issued by the deductor.
Entities, both corporate and non-corporate deductors, making payments specified under the Income Tax Act to third parties (deductees) must deduct Tax Deducted at Source (TDS) from these payments. The deducted tax is then deposited at designated branches of banks authorized to collect taxes on behalf of the Government of India. Additionally, deductors are required to furnish TDS returns electronically containing details of the deductees and challan details related to the deposit of tax to the Income Tax Department (ITD).
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Forms prescribed for filing TDS returns depending upon the nature of the TDS deduction
| FORM | PARTICULARS |
| Form 24Q | The quarterly statement for tax deducted at source (TDS) from “Salaries.” |
| Form 26Q | The quarterly statement for tax deducted at source in respect of all payments except ‘salaries.’ |
| Form 27Q | Quarterly statement of deduction of tax from interest, dividend, or other sum payable to non-residents or foreign companies. |
| Form 26QB | Statement of TDS deducted against the payment made for immovable property. |
| Form 26QC | It is a challan cum statement of deduction of tax u/s 194-IB against the tax deducted on the rent of the property. |
| Form 27EQ | Quarterly statement of collection of tax at source (TCS) |
Form 24Q
Form 24Q is a quarterly statement used for deducting tax at source from employees' salaries, as per Section 200(3) of the Income Tax Act.
Employers, acting as deductors, file this statement and include details like PAN (Permanent Account Number) of both the employer and employee, salary specifics, TDS details, and other relevant information. Submission of Form 24Q to the Income Tax Department is mandatory for employers, ensuring accurate reporting of TDS on salary payments. Compliance with filing this form every quarter is essential for employers.
Form 26Q
Form 26Q is a quarterly statement that shows the deduction of taxes according to sections 200(3), 193, and 194 of the Income-tax Act. It covers payments other than salary for the specific quarter.
The form includes details such as challan information, information about the deductor and deductee. If the deductor has not deducted or deducted at a lower rate, the form requires reasons to be provided.
TDS under below sections are covered in Form 26Q:
| Section | Nature of Payment |
| 193 | Interest on securities |
| 194 | Dividend |
| 194A | Interest other than interest on securities |
| 194B | Winning from lotteries and crossword puzzles |
| 194BB | Winnings from horse race |
| 194C | Payment of contractor and subcontractor |
| 194D | Insurance commission |
| 194EE | Payment in respect of deposit under (NSS) national saving scheme |
| 194F | Payments on account of repurchase of units by mutual funds or UTI |
| 194G | Commission, prizes, etc., on sale of lottery tickets |
| 194H | Commission or brokerage |
| 194I | Rent |
| 194J | Fees for professional or technical services |
| 194LA | Payment of the Compensation on acquisition of certain immovable property |
| 194LBA | Certain income from compensation on acquisition of certain immovable property |
| 194DA | Payment in respect of life insurance policy |
| 194LBB | Income in respect of units of investment fund |
| 194IA | Payment on transfer of certain immovable property excluding agriculture land |
| 194LC | TDS on income by way of interest from an Indian Company or a business trust |
| 194LD | TDS on income by way of interest on certain bonds and Government Securities |
| 194LBC | Income in respect of investment in securitization trust |
| 192A | Payment of accumulated balance due to an employee from the trustees of the Employees’ Provident Fund Scheme, 1952 |
| 194N | TDS on cash withdrawal in excess of Rs 1 crore |
| 194M | TDS on payment to resident contractors and professionals |
| 194O | TDS on E Commerce Transactions under Section 194O with effect from 01st April 2020 |
Form 27Q
Form 27Q is a quarterly report that outlines the deduction of taxes under section 200(3) of the Income Tax Act. It applies to payments, excluding salary, made to non-residents and foreigners during a specific quarter. The income sources subject to TDS deduction include interest income, bonuses, and other amounts owed to NRIs.
Form 26QB
According to Section 194-IA of the income tax act, TDS applies when selling immovable property for more than Rs 50 lakhs. The buyer deducts 1% tax and pays it to the seller. This rule doesn't apply to transactions involving agricultural land.
TDS, along with Form 26QB, must be submitted within 30 days from the month-end when TDS was deducted. The person deducting TDS provides Form 16B to the payee within 15 days from the due date of filing Form 26QB.
Form 26QC
Under Section 194IB, individuals and HUFs renting properties above Rs 50,000 must deduct 5% TDS annually. This TDS is to be paid within 30 days of deduction, using Form 26QC.
The taxpayer/tenant needs to provide Form 26QC in two cases: at the end of the fiscal year or when vacating the premises/terminating the agreement, especially if it falls within the same fiscal year.
Due Dates of filing TDS return form
TDS return due dates vary by quarter in a financial year. Here are the due dates for filing 24Q, 26Q, and 27Q:
| Quarter | Due date |
| April to June | 31st July |
| July to September | 31st October |
| October to December | 31st Jan |
| January to March | 31st May |
Due date of filing of Form 26QB:
The property buyer, known as the deductor, must file Form 26QB online—a combined payment and declaration statement. This form needs to be submitted within 30 days from the end of the month in which the payment or deduction occurred. There is no need to file a separate TDS return for this deduction.
Due date of filing of Form 26QC:
Pay your tax online using Form 26QC within 30 days from the end of the financial year or the day the property is vacated. For example, if tax is deducted in March, the deadline to deposit the tax and file 26QC is April 30, 2020.
Due date of furnishing of Form 27EQ:
| Quarter | Due date |
| April to June | 15th July |
| July to September | 15th October |
| October to December | 15th January |
| January to March | 15th May |
Consequences of filing late TDS return
Failing to submit the TDS return by the due date incurs a penalty of Rs 200 per day until the issue is resolved. The penalty, however, cannot exceed the total TDS amount.
TDS certificate & due date of issuing TDS certificate
A TDS certificate is required to be issued by the person deducting TDS to the assessee from whose TDS was deducted.
Different TDS certificates and their due dates are as follows:-
| Form no. | Description | Periodicity | Due date |
| Form No. 16 | TDS from salary | Annual | On or before June 15 of the financial year immediately following the financial year in which tax is deducted or such date to be extended by the income tax department |
| Form no. 16A | TDS from other than Salary | Quarterly | Upto 15 days from the due date of furnishing quarterly TDS returns |
| Form No. 16B | TDS u/s 194-IA | Within 15 days from the due date of furnishing challan in Form No. 26QB | |
| Form No. 16C | TDS u/s 194-IB | Within 15 days from the due date of furnishing challan in Form No. 26QC |
I hope this guide provided a helpful overview of TDS returns, forms and deadlines. If you find filing TDS returns confusing or intimidating, consider seeking professional help. You can contact us at 9930623006 or admin@zealconsultancy.co.in