Annual TDS Return

Tax deduction at Source is a process of collecting tax at the time of transaction. The government of India deducts tax at Source to ensure that the collection of tax propones and the responsibility diversifies. For example, in salary, a deductor automatically deducts tax at the time of payment. The employer then deposits this TDS to the income tax department. However, apart from depositing the tax at Source, the deductors should also file return.

TDS Return is a quarterly statement given to the IT department. All the deductors must file their TDS return on time. 

Entities that have TAN registration can file TDS return. TAN is a 10-digit alpha number that is mandatory for all the entities responsible for Tax deduction at Source. Under IT Act, you must file TDS return for the following payments:

1) Payment of salary

2) Income on securities

3) Income from lottery, puzzles and other sources

4) Payment in honor for the national saving scheme 

5) Insurance payment

The due dates for filing TDS returns come in four quarters. Due dates for:

1st quarter: 

(from 1st April-30th June) is 31st August 

2nd quarter: 

(1st July-30th September)-31st October

3rd quarter: 

(2st October-31st December)- 31st January

4th quarter: 

(1st January- 31st March) – 31st May

There are various types of forms for filing TDS returns. All these forms serve a different purpose. They are based on the income of the deductee. Different forms for filing TDS returns are:

Form 24Q- 

Form 24Q is a quarterly statement filed for TDS on salary. According to section 192, IT Act 1961, any employer deducting TDS while paying salary needs to file a salary TDS return in form 24Q. 

Form 26Q-  

Form 26Q is a quarterly statement filed for all TDS on payment other than salaries. The form states the total amount paid during the quarter, and the Tax Deduction made at Source. 

Form 27Q-  

Form 26Q is a quarterly statement filed for all TDS from interests. It also includes any other payment to the non-residents.

Form 27EQ-  

Form 26Q is a quarterly statement filed for all tax deduction made during the transaction. Under section 206C of the IT Act 1961, the form 27EQ must be filed by all the entities every quarter.  

As per the IT Act 1961, filing TDS is mandatory for all the entities. But it also offers you some benefits such as:

1) Easy mode of tax payment

2) Reduces the burden of lump-sum tax payment

3) Regular income for the government 

4) Increase in credibility

According to Section 234E of IT Act, if an assessee fails to file TDS return before the due dates, a penalty of INR 200 per day will keep on adding till the time of payment. However, the total penalty also should not exceed the TDS amount.