eTDS – Overview :
As per the income tax laws, entities (both corporates and non-corporates – deductors) making payments to third parties (deductees) are required to deduct tax at source (Tax Deducted at SourceTDS) from these payments and deposit the same at any of the designated branches of authorised banks. They should also furnish TDS returns containing details of deductee(s) and bank where TDS amount is deposited with the Income Tax Department (ITD).
ITD has prescribed three new forms
| Form No. | Particulars | Periodicity |
| Form 24Q | Quarterly return of “Salaries” | Quarterly |
| Form 26Q | Quarterly return of deduction of tax in respect of all payments other than “Salaries” | Quarterly |
| Form 27Q | Statement of deduction of tax from interest, dividend or any other sum payable to certain persons* | Quarterly |
ITD has made it mandatory (w.e.f. June 1, 2003) for corporate deductors to furnish their TDS returns in electronic form (eTDS return). Non-corporate deductors can furnish their returns in physical form with their respective Income Tax offices. They can also furnish their returns in electronic form through TIN facilitation centres established by NSDL.
ITD has notified an “Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003”. It is applicable to all deductors furnishing their TDS return in electronic form.
Deductors furnishing their TDS return in electronic form (eTDS return) shall furnish the same to TIN facilitation centres established by NSDL.
Deductors furnishing returns in electronic form (eTDS return) have to furnish a control chart – Form27A in physical form along with the eTDS return CD/floppy. Form 27A is a summary of TDS return (Form 24, 26 or 27), which contains control totals of ‘Amount Paid’ and ‘Income tax deducted at source’. The control totals mentioned on Form 27A should match with the corresponding control totals in eTDS return file. Form 27A is required to be furnished separately for each return (Form 24, 26 or 27).
Procedure For e-filing Of TDS Returns
1. Objective:
In phase-I of TIN it is proposed to receive the electronic TDS returns of corporate deductors and to digitise the paper TDS returns of other deductors. In Phase-II of TIN the work relating to dematerialization of TDS certificates will be taken up so that cross verification of deduction by the Deductors with the claims of deductees can be carried out.
2. Scheme for Electronic Filing of TDS returns:
3. eTDS Administrator and eTDS Intermediary:
4. Procedure for allotment of TAN:
4.2 NSDL has also been authorised to receive applications (form 49B)for allotment of TAN at their front offices for fee of Rs.50/- to be paid by the applicant to them. The data in respect of such TAN applications will be entered by NSDL and sent to National Computer Centre (NCC) of Income-tax Department and the respective computer centres on-line . The allotment of TAN will be done by the IT department centres and communicated online to NSDL who will intimate the same to the applicant.
5. Preparation of eTDS return:
5.2 The prescribed data structure can be downloaded from this websit es as also of NSDL (http://tin.nsdl.com) This can also be obtained from the front offices of NSDL. While preparing the eTDS returns, the deductor has to ensure that following mandatory requirements listed in Circular No.8 of CBDT dated 19.9.2003, are complied with :
(i) Tax deduction Account Number (TAN) of the deductor is clearly mentioned in the TDS return as also on Form No.27A, as required by sub-section (2) of section 203A of the Income-tax Act. However, in cases where TAN is not available the eTDS returns will also be accepted if the same is accompanied with an application in Form 49B for allotment or for reformatting.
(ii) Full particulars relating to deposit of tax deducted at source, in the designated bank are correctly and properly filled in the table at item No.6 of Form No.24 or item No.5 of Form No.26 or item No.5 of Form No.27, as the case may be.
(iii) The data in the eTDS return is as per the data structure prescribed by the e- Filing Administrator.
(iv)The Control Chart in Form 27A is duly filled in all columns, signed and enclosed in paper form with the return on computer media.
(v) The Control Totals of the amount paid and the tax deducted at source as mentioned at item No.3 of Form No. 27A tally with the corresponding totals in the eTDS return in Form No. 24 or Form No. 26 or Form No. 27, as the case may be.
In case any of these mandatory requirements are not fulfilled, the eTDS return will not be received by the eTDS intermediary.
5.3 The deductors should prepare their eTDS return as per the above procedure, store the data on a CD ROM, enclose the control chart (Form 27A in paper format) and submit these at any of the front offices of NSDL. Although the scheme permits eTDS returns to be prepared on a floppy, it would be preferable that these are prepared on a CD ROM to avoid any loss of data, viruses etc.
6. Filing of eTDS returns:
6.2 Section 139A(5 B) requires that PAN of the deductees should be mentioned in the TDS returns. Wherever PAN of deductees is not mentioned by a deductor in his eTDS return, this fact will be recorded on the provisional receipt as deficiency, to be removed by the deductor. However, in such cases, NSDL will accept the eTDS returns. The deficiency can be removed by the deductor within 7 days, failing which the eTDS returns will be sent by NSDL to the Department indicating the deficiency therein for appropriate action by the concerned A.O.
7. Upload Charges: Since e-filing of TDS returns will reduce the voluminous paper work involved in filing of paper TDS returns and enclosures thereby significantly reducing the compliance cost of deductors, the e -intermediary i.e. NSDL have been authorised to collect service charges in respect of the various services being rendered by them to the deductors for upload of eTDS returns at the following rates:
Category of eTDS return Upload charges
Returns having records of up to 100 deductees Rs.25/-
Returns having records of 101 to 1000 deductees Rs. 150/-
Returns having records of more than 1000 deductees Rs.500/-
Service tax if any will be payable by deductors in addition to the above.
8. Transmission of data pertaining to eTDS returns and Form 27A to the A.O.
8.1 The computerized data of eTDS returns in the prescribed data structure will be transmitted by NSDL to the National Computer Centre of Income Tax Department online and will become available to the concerned TDS Assessing Officers (A.O) on the network. This will obviate requirement of data entry for e- TDS returns by the Assessing Officers (A.O).
8.2 The paper Form 27A, CD/floppies and supporting documents if any, will be arranged by NSDL A.O.-wise and sent to the Nodal Officers appointed at each of the 41 cities. The concerned Chief Commissioner of Income tax should appoint one officer not below the rank of Administrative Officer/ ITO as TDS Nodal Officer. Each batch of Form 27A, CD/floppies and supporting documents if any, will be accompanied by a list (giving TAN, name of Deductor, date of filing and Form No. of the TDS return) in triplicate. Two copies of the list would be given to the Nodal Officer, who will send the Forms 27A and supporting documents and CDs along with one copy of the list to the concerned TDS A.O. in a timely and proper manner. Thus one copy of list will be retained by each of the Front Office and Nodal Office and the third copy goes to the concerned TDS A.O.
9. Procedure relating to processing of paper TDS returns:
9.2 The TDS returns in new Form 24, 26, 27 filed during the current financial year in paper format by non corporate deductors will also be sent to the front offices of NSDL at the respective cities for digitisation i.e. data entry by NSDL by the department.
10. Computerised processing of TDS Returns:
With recent ammendments, heads under which TDS is attracted, information has to be given even if TDS has not been made. Is it mendatory to do so? In case the payments under any of such section ultimately do not exceed the specified limit, then what? If during first three quarteres, the amount if below the limit of TDS and then in fourth quarter, there is a payment which makes the expenditure attract TDS. what has to be done under such circumstance?