Tax Deducted at Source (TDS) Returns in India
TDS is a mechanism where a part of the income is deducted by the payer at the time of payment and deposited with the government on behalf of the payee. The returns filed by the deductor report the TDS deducted and deposited during a specific period.
Types of TDS Returns:
- Form 24Q: For TDS on salary, interest, pension, and annuity income (Quarterly).
- Form 26Q: For TDS on other income like rent, professional fees, commission, and royalties (Quarterly).
- Form 27Q: For TDS on the purchase of property (Quarterly).
- Form 27EQ: For TDS on specified payments under Section 194Q (Quarterly).
Who Needs to File TDS Returns?
- Any person or entity responsible for deducting and depositing TDS, including:
- Companies
- Businesses
- Financial institutions
- Government agencies
- Individuals making specific payments exceeding certain thresholds.
Key Information in TDS Returns:
- Details of deductor and deductees
- Nature and amount of payment made
- Rate of TDS applicable
- Amount of TDS deducted
- Date of TDS deduction and deposit
- Challan details for TDS deposit
Filing Process:
TDS returns are filed electronically through the e-filing portal of the Income Tax department. The process may vary depending on the type of return.
Due Dates for Filing TDS Returns:
- Quarterly returns must be filed by the 15th day of the month following the quarter.
- Example: For Q1 (April–June), the due date is July 15.
Consequences of Non-Compliance:
- Penalties for late filing or non-filing can include:
- Penalties for late filing
- Interest on late deposit
- Additional penalties under Sections 271C and 272A
Benefits of Timely Filing TDS Returns:
- Avoids penalties and interest charges.
- Ensures accurate credit of TDS in the deductee’s tax records.
- Facilitates reconciliation of TDS deducted and deposited.
Comprehensive Table of TDS Sections and Rates (As of January 2024)
| Section | Income Type | Rate (Resident) | Rate (Non-Resident) | Threshold |
|---|---|---|---|---|
| 192 | Salaries | Progressive | 30% | – |
| 193 | Interest on Debentures (unlisted) | 10% | 20% | Rs. 5,000 |
| 194 | Dividend | 10% | 20% | – |
| 194A | Interest on Deposits (except bonds) | 10% (PAN) / 20% (no PAN) | 20% | Rs. 10,000 |
| 194B | Winnings from Lotteries, Card Games, Crossword Puzzles | 30% | 30% | Rs. 10,000 |
| 194C | Contractual Payments (professional fees, commission) | 1% or as per agreement | 20% | Rs. 50 lakh |
| 194J | Professional/Technical Charges, Royalty & Non-compete fees | 10% | 20% | Rs. 30,000 |
| 194IA | Rent (Land & building) | 10% (PAN) / 20% (no PAN) | 30% | Rs. 1.8 lakh |
| 194Q | Specified Payments (e.g., purchase of goods) | 5% | 20% | Rs. 10 lakh |
| 194R | Perks or Benefits provided to Residents | 10% | – | Business income |
| 194S | Virtual Digital Assets (VDAs) | 1% | 30% | – |
Important Notes:
- This table provides a general overview of TDS sections and rates but may not cover all possible sections.
- Rates for non-residents can be reduced by applicable tax treaties.
- Always consult a tax advisor or Company corpo for specific guidance.
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