For quick and efficient collection of taxes, the Income-tax Act has incorporated a system of deduction of tax at the point of generation of income. This system is called “Tax Deducted at Source” commonly known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is directly remitted to the Government by the payer on behalf of the payee.
The provisions of tax deducted at source presently apply to several payments like salary, interest, commission, brokerage, professional fees, royalty, etc.
Person liable to furnish TDS statement
Every person responsible for deduction of tax shall furnish quarterly statements in respect thereof.
Form for filing TDS statements
Quarterly TDS statements shall be furnished in following forms:-
1) Form 24Q – Statement of deduction of tax from salary under section 192.
2) Form 27Q – Statement of deduction of tax under section 193 to 196D in respect of the deductee who is a non-resident (not being a company) or a foreign company or resident but not ordinarily resident.
3) Form 26Q – Statement of deduction of tax under Section 193 to 196D in any other case.
However in case tax is deducted under section 194-IA, the deductor shall furnish a challan-cum-statement in Form 26QB within a period of seven days from the end of the month in which the deduction is made. In this case, no statement shall be filed separately.
Due date for filing of TDS statements
The due dates for filing quarterly TDS statements are as follows:
Quarter ending of the financial year If deductor is an office of government In case of non-government deductor
30th June 31st July of the financial year 15th July of the financial year
30th September 31st October of the financial year 15th October of the financial year
31st December 31st January of the financial year 15th January of the financial year
31st March 15th May of the financial year immediately following the financial year in which deduction is made 15th May of the financial year immediately following the financial year in which deduction is made.
Furnishing of TDS statement electronically
The quarterly TDS statement shall be furnished electronically in any of the following mode:
a) Furnishing the statement electronically under digital signature; or
b) Furnishing the statement electronically along with the verification of the statement in Form 27A or verified through an electronic process.
Due date for deposit of TDS to the credit of Central Government:
Tax deducted at source shall be deposited to the credit of Central Government in accordance with the following provisions:
1) In case deductor is an office of the Government
Particulars Due Date
a) Where tax is paid without production of an income-tax challan On the same day when tax is deducted
b) Where tax is paid accompanied by an income-tax challan. On or before 7 days from the end of the month in which the deduction is made or income-tax is due under Section 192(1A)
2) In case of any other deductor
Particulars Due Date
a) Where the amount is credited or paid in the month of March On or before 30th day of April
b) In any other case On or before 7 days from the end of the month in which the deduction is made or income-tax is due under sub-section (1A) of section 192
Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of seven days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB.
Mode of payment of TDS:
Taxes deducted at source shall be deposited to the credit of the Central Government in following modes:
1) E-Payment: E-Payment is mandatory for :
a) All the corporate assesses.
b) All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.
Physical Mode: By furnishing the Challan No. 281 in the authorized bank branch
When tax is deducted/collected by government office, it can remit the amount to the Central Government without production of an Income-tax challan and by making only book adjustment. In such a case, it has to furnish Form No. 24G to NSDL with in prescribed time-limit.