Are you looking for insights on TDS? Then, this article can help. It looks at the meaning of TDS, TDS forms and filing dates, and a few more aspects of TDS.
What is TDS?
TDS, Tax Deducted at Source, is part of income tax. It is the person who makes the payment that deducts the TDS while paying money to someone. These payments could be of various types like salary, commission, rent, professional fees, etc. Usually, the payment receiver is liable to pay the income tax. But deducting TDS ensures advance tax payment.
The receiver receives the net amount after the deduction of TDS. The TDS will be adjusted against the person’s final tax liability. The receiver takes credit for the amount deducted and paid on their behalf.
When is TDS Deducted?
Any individual who makes payments mentioned under the Income Tax Act should deduct TDS while making such specified payments. But the payer does not have to deduct TDS if the person making the payment is a person or HUF whose books do not require an audit. But let’s look at some exceptions.
For rent payments made by HUF and individuals above INR 50,000 per month, 5 percent TDS should be deducted if the payer isn’t liable for a tax audit. Also, such people do not have to apply for TAN. Employers deduct TDS per the applicable income tax rates. Banks deduct 10 percent of TDS. They may deduct it at 20 percent if they do not have the receiver’s PAN information.
When Can TDS Be Not Deducted?
If the receiver submits investment proofs (to claim deductions) to their employer and their taxable income is below the taxable limit, then they do not have to pay tax. Thus, no TDS will be deducted from the income.
Speaking of banks, receivers can submit Form 15G and Form 15H to the bank if the total income is below the taxable limit. On submitting the forms, the bank will not deduct TDS on the interest income.
Suppose the receiver couldn’t submit the proof and the employer or the bank have already deducted TDS, and the receiver’s total income is below the tax limit. Then, the receiver can file a return and claim a TDS refund.
How is TDS Deposited?
TDS has to be deposited through Challan ITNS-281 on the government portal.
When and How to File TDS Returns?
Filing TDS returns is imperative for people who deduct TDS. It is to be done quarterly and requires providing details like TDS amount deducted, TAN, deductee’s PAN, type of payment, etc. The government prescribes various filing return forms based on the TDS deduction purpose. Let’s look at them.
| Form Number | Transactions Reported in the Returns | Due Date |
| Form 24Q | Salary | Q1 – 31st July, Q2 – 31st October, Q3 – 31st January and Q4 – 31st May |
| Form 27Q | All payments made to non-residents, except for salaries | Q1 – 31st July, Q2 – 31st October, Q3 – 31st January, and Q4 – 31st May |
| Form 27QB | Property sale | 30 days from the month end in which the TDS is deducted |
| Form 26QC | Rent | 30 days from the month end in which the TDS is deducted |
| Form 26QTDS | All payments except salaries | Q1 – 31st July, Q2 – 31st October, Q3 – 31st January, and Q4 – 31st May |
We hope, this article provided you adequate insights on TDS.