TDS/TCS return filing

What is TDS/TCS Return?

TDS is the abbreviation for Tax Deduction at Source. It is a way of collecting tax on dividends or asset sales, by requiring the payer to deduct tax due before paying the balance to the payer. Under GST, TDS is granted at a maximum rate of 2%.

Whereas, TCS that is the Tax Collected at Source is provided under section 206C which is an income tax collected in India payable by the seller who collects in turn from the buyer at the sale of some goods which are specified. It is applicable at a rate of 1% for both intrastate and interstate 1% IGST net taxable supplies under GST. Understand more about TDS/TCS return with us.

TDS/TCS returns filing

TDS (Tax Deduction at Source)

Who has the liability to collect TDS?

The liability to collect TDS lies on:

  • Governmental agencies.
  • Central government or State government-owned department or entity.
  • Persons or their categories as specified by the central or state government on the Council’s recommendation.
  • Local authorities.

TDS Rates:

SECTION PAYMENT’S NATURE TDS RATE FOR INDIVIDUAL’S/HUF (in %) TDS RATE FOR NON-RESIDENTS INDIAN (in %)
192 Salary payment According to the income tax category. According to the income tax category.
194B Income gained via winning from card games, lotteries or other games.                              30                                 30
194BB Income gained via winning from horse racing.                30                30
194EE Payment towards National  Savings Scheme Deposits.                  5                 5
194F Payment towards repurchase of units BY Mutual Funds.                  20                  20
194G Income arising from the sale of lottery tickets commissions or other transactions.                    5                     5

Filing procedure:

Firstly, you must fill up the multiple columns in Form 27A. With the help of the e-TDS return filed, the hard copy of the filled Form 27A can be verified electronically. Correctly fill and tally the total of the amount paid and the tax deducted at source with the respective forms. The Form 27A must have the TAN number of the organization filing the TDS return. In case there is an error filing the TAN number then you can end up having difficulty in matching and verifying. Now you can see that the TDS return mentions the details of tax paid with the mode of the transaction as well as the proper challan number. Now again, if there is a mistake in filing the challan number or dates of payment, it will lead to mismatch and you will have to re-file again. The basic form that has been used for e-TDS return is recommended by the department as it is important to bring consistency. Go ahead by entering the 7 digit BSR code carefully to ensure easy tallying with the actual tax deposit. In the case of offline TDS returns, it can be submitted at any TIN-FC’S managed by NSDL. And if they are filed online then you can directly submit at the NSDL TIN website. In such an online procedure, the deductor has to mandatorily sign the returns using a digital signature. If all the information in the TDS return is faultless then a provision receipt number will be granted. This is proof that the return has been filed. In case the return is rejected, then the returns will have to be re-filed.

Significance:

The administration of our country collects the TDS to prevent tax evasion from fraudulent individuals and to keep funds source stable for the administration throughout the year. It becomes an issue for taxpayers to pay a huge amount of tax annually and therefore, TDS helps all the taxpayers to pay as they earn. The TDS is deducted according to the different slabs. As your annual income starts crossing a particular threshold then the TDS is deducted. The significance of TDS are as follows:

  • It is a speedy source of tax collection for the government.
  • The base is widened as every taxable entity pays TDS in one or the other form.
  • The chances of Tax evasion is reduced.
  • It is a convenient system as the tax is automatically deducted instead of making payments for filing.

Incomes where TDS is not levied:

Certain incomes do not require the TDS deduction and some of they are enlisted below :

  1. The interest is paid to state financial organization or central financial organization.
  2. Interest earned on KVP, NSC, or Indian Vikas Patra Scheme.
  3. Specified societies such as LIC, VTI, and many more.
  4. Institutions under the no-TDS provision.
  5. Interest earned through NRE Accounts.
  6. Interests gained from Saving Account Opened in co-operative societies.

TCS (Tax Collected at Source)

TCS Rates:

The TCS rates in India depends on the type of goods. Some of them are enlisted below:

               TYPE OF PRODUCT                              TAX %
Liquor of alcoholic nature                              1.00%  
Purchase of motor vehicles exceeding Rs.10 Lakhs.                              1.00%  
Parking lot, Toll Plaza, Mining and Quarrying                              2.00%  
Minerals such as coal, lignite, etc.                              1.00%  
Jewellery that exceeds Rs. 5 lakhs                              1.00%  
Timber wood under a forest leased.                              2.50%  
Tendu Leaves                              5.00%  

TCS At Lower Rate:

A buyer can apply to the Assessing Officer for collecting the tax at source at a lower rate with the help of Form No. 13,

with a condition that the Assessing Officer is convinced that the total income of the buyer is proved for a lower rate. The officer may as well as grant a certificate that carries the rate of TCS specified with the lower rate sanctioned.

Filing:

In addition to annual returns, they are not to be filed quarterly. Returns are to be filed quarterly in Form Number 27EQ on or before July 15 and January 17, accordingly for the first three-quarters of the financial year. The returns have to be a file on or before April 30 for the last quarter. Annual returns are to be filed on Form Number 27E on or before 30th June of the following financial year.

Electronic TCS (e-TCS):

Filing TCS returns via electronic media is known as e-TCS. Corporate collectors and the government must file TCS returns in its electronic form. Collectors are allowed to file TCS returns through an offline form or electronic form. e-TCS returns are collected from the collector by the NSDL on behalf of the Income Tax Department.

There are several TCS specific form formats which should contain all information for filing the TCS return. This includes:

  • A-DATA Cartridge which is 4mm 2GB/4GD (90M/120M).
  • 1.44MB floppy disc that is 3.5 inches.
  • CD – ROM with a capacity of greater than equal to 650mb.
  • The returns are mandatory to get verified and must be accompanied with a Form No.27B.

TCS Certificate:

A certificate Form 27D needs to be submitted within 7 days’ tenure from the very last date of the month on which the tax had been collected by the people or individual who is responsible for the collection of TCS. In the period that ends on 30th September 31st March for a financial year, there are more than a single certificate to be granted for a buyer for TCS. A consolidated certificate can be granted within a month from the last day of the period. This particular certificate has to be requested by the buyer.

In case a person loses his TCS certificate, then an in-chargee officer comes for the collection of TCS. TCS Source can issue a duplicate certificate that can be printed and attested on plain paper with all sorts of necessary details as mentioned in the Form 27D.

What is Form 27A?

The form for furnishing information with the statement of deduction of tax at source is known as Form 27A. It is the abbreviation of e-TDS return which contains control totals of the amount paid and income tax deducted at source. It is important to be verified using the File Validation Utility.

You can visit government website to know more.

Documents Required for TDS/TCS Return Filing:

  • PAN (Personal Account Number) card/PAN Number.
  • All of your bank account information.
  • TDS Certificate (in case if TDS has been deducted by others).
  • Tax payment challans (Self-assessment, advance tax, in case you have deposited the same).
  • You need the details of the Original return/ details of notice in response to a notice received from the Department of Income Tax.

TDS/TCS return tax credit brief:

The tax that is deducted at the time of payment to a payee, is known as TDS. While in TCS the revenue is collected from the buyer. TCS is a tax collection method for specified products. There are numerous benefits available to the person from whose income tax is deducted and from those whose purchase expenses, the revenue collected. Thus, these benefits are availed to individuals in the form of TDS/TCS return credit.

In this piece of content, we have highlighted all the essential elements regarding the TDS/TCS return. We have hopefully tried to provide you with the framework that will guide you through all the procedures or steps. We wish that our clients will be able to file their TDS/TCS returns in a very easily with us.

Know about income tax filing also.