• Feb
  • 13
  • 2012

Nil E-TDS Return, Nil Challan, When to file nil return

Article ID 47742 | Posted In Income Tax | , | 19 Comments » Print Friendly and PDF

What is a Nil Return?

Return, which comprises of Only Zero/NIL Deductions in deduction details and no challan details (Apart from a NIL Challan Indication) is called NIL Return.

Note that the NIL return should have a value Greater than Zero as Total Amount Paid/Credited. Zero-Amount of Payment is not accepted by NSDL. It is compulsory for a deductor to file NIL return if he has done some payments and not deducted/Collected any TDS/TCS on the amount of payment. No Deduction Details and No Challan details is not a NIL returns.

What is the position for an assessee who has not made any payment at all in a quarter?

If there are no payments done under that particular form, it is not compulsory for the deductor to file eTDS returns for that form, unless intimated by IT Department/NSDL.  The obligation to file quarterly TDS Return arises only if tax has been deducted at source. Legally there is no need to file Quarterly TDS Return/ Statement where no tax has been deducted at source. NSDL is also of the view that it is not at all compulsory to file NIL return, if deductor has not deducted any tax at source or if there is no transaction at all for a particular period.

What to do If for a quarter TDS return / statement are not filed and then the assessee receives a letter / notice from NSDL/ Income Tax Department for non-filing of e-TDS return/statement?

Letter for non-filing of e-TDS return/statement normally clearly mentions at the bottom that if the assesee has already furnished or is not required to furnish TDS return!statement then the letter is to be ignored. The assesee who has not filed the return because of NIL transactions replies to this letter stating that as there is no transaction during the quarter the return/statement has not been filed.  The other option left before the assessee is to file a NIL return.

When Assessee is required to file NIL TDS return?

When there is a payment liable to TDS but, on which no tax has been deducted at source as deductee has produced a certificate of NIL tds rate from assessing officer.

What about Challan and deduction Link for Zero Deduction?

Zero Deduction should also be linked to a NIL challan in the Output file.

How to Create Nil Challan?

In TDS return we have to fill details of Challan as per Table given below to create a Nil Challan.

Field Value
Serial No. (Column no. 401)
Section Code(Section Relevant to the Nature of Payment)
From DropDown Menu
Amount Fields i.e. TDS,Surcharge,Education Cess,Interest and Others(Column no. 403 to 407)
0.00 (Zero)
Cheque / DD number (Column no 409)
Date on which tax deposited (Column no. 411) last day of respective quarter e.g. for quarter 4
Transfer voucher / Challan serial No. (Column no. 412)
Whether TDS Deposited by Book Entry ?(Yes)/(No) (Column no.413)
Interest Rs
0.00 (Zero)
Others Rs
0.00 (Zero)