As a full-service Indian Chartered Accountants firm in Delhi / NCR, Ahuja & Ahuja provides expert TDS and TCS Return Filings services to clients in the NCR region of New Delhi, Noida, Gurugram (Gurgaon) and Greater Noida. Our team of experienced Chartered Accountants with over two decades of industry experience can help you stay compliant with your TDS and TCS obligations.
TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are two common terms used in taxation, but many people wonder how they differ and why they come into play. At Ahuja & Ahuja, we aim to shed some light on these important aspects of taxation and help you navigate the complexities of TDS and TCS Return Filings.
Our TDS and TCS return filing services include
- TDS Return Filing Services: We offer TDS return filing services for various types of payments such as salary, interest, commission, brokerage, professional fees, royalty, and more.
- TDS Return Filing Process: Our team will guide you through the entire TDS return filing process, ensuring that all relevant information is accurately recorded and filed within the due dates.
- TDS and TCS Return Status: We provide regular updates on the status of your TDS and TCS returns, ensuring that you are always aware of your tax liabilities and deadlines.
What is TDS?
TDS and TCS are two important terms used in the field of taxation. TDS stands for Tax Deducted at Source and TCS stands for Tax Collected at Source. Despite their similar sounding names, they have distinct purposes and implications.
TDS is a mechanism for the efficient collection of taxes whereby tax is deducted at the point of income generation. This helps combat tax evasion and ensures that tax is paid in a timely manner. TDS provisions currently apply to several types of payments such as salary, interest, commission, brokerage, professional fees, royalty, etc.
Recipients of such income can claim a refund of the excess tax paid in the form of TDS at the time of filing their Income Tax Returns (ITR) if their tax deducted is more than the required amount. Understanding the nuances of TDS is crucial for both payers and payees to ensure compliance with tax laws.
What is the due date for a tax deductor to deposit TDS to the Government?
As a tax deductor, it is important to know the due dates for depositing TDS to the Government. Here are the timelines you need to keep in mind:
- If the amount is credited or paid in the month of March, the TDS must be deposited on or before 30th April of the same year.
- In all other cases, TDS must be deposited within 7 days from the end of the month in which the deduction was made.
For instance, if you deduct tax at source in June 2022, the TDS amount must be deposited to the Government on or before 7th July 2022.
However, if the tax has been deducted under sections 194-IA, 194-IB, or 194M, the TDS must be deposited within 30 days from the end of the month in which the deduction was made. These sections deal with TDS on payment on transfer of immovable property, rent paid by certain individuals or Hindu undivided family, and payment for contracts or technical services by certain individuals or Hindu undivided family, respectively.
What if the due date to deduct tax or deposit the TDS to the Government is missed?
If a deductor fails to deduct tax at source or deposit TDS to the Government on time, they will be considered an assessee-in-default, according to section 201 of the Income Tax Act. In such a case, the deductor will be liable to pay simple interest at the following rates:
a) 1% for every month or part of a month on the amount of tax that was supposed to be deducted, from the due date of deduction to the date on which it is actually deducted.
b) 1.5% for every month or part of a month on the amount of tax that was deducted, from the due date of deduction to the date on which it is actually paid to the Government.
It is important to ensure timely deduction and deposit of TDS to avoid being penalized with interest payments.
What is TCS?
TCS, or tax collected at source, is a form of tax collection by the Government where the seller collects an additional amount as tax at the time of sale, over and above the sale price, and remits it to the Central Government. The tax collection is governed by the TCS provisions of the Income Tax Act 1961.
As per the provisions, the seller must collect a specified percentage of tax at the time of debiting the amount payable by the purchaser to the purchaser’s account, or at the time of receipt of the amount from the purchaser, whichever is earlier. The seller must obtain a Tax Collection Account Number and quote it in all documents related to the transactions.
What is the due date for a tax collector to deposit TCS to the Government?
The tax collected at source has to be deposited to the credit of the Central Government within seven days from the last day of the month in which the tax is collected.
For example: If a seller collects tax from a buyer in May, 2022, then he will have to deposit such tax to the Government on or before 7thJune, 2022.
What if the due date to collect the tax or deposit the TCS to the Government is missed?
According to section 206C(7), if the person liable to collect tax at source fails to collect it or after collecting defaults in paying it to the Government, he shall be required to pay simple interest at 1% per month or part of the month on the amount of such tax from the date it was supposed to be collected to the date on which the tax was actually paid to the Government and such interest shall be deposited before furnishing the TCS statement for each quarter.
Types of TDS/TCS Return Forms
There are several TDS/TCS return forms, which are used to file TDS/TCS returns with the Income Tax Department. The types of TDS/TCS return forms are:
- Form 24Q: This form is used to file quarterly TDS returns for salaries.
- Form 26Q: This form is used to file quarterly TDS returns for payments other than salaries.
- Form 27Q: This form is used to file quarterly TDS returns for payments made to non-residents.
- Form 27EQ: This form is used to file quarterly TCS returns.
- Form 27A: This is not a return form, but a control chart that contains details of the TDS/TCS returns filed in paper format.
These return forms contain details such as the name and PAN of the deductee, the amount of TDS/TCS deducted/collected, and the date of deduction/collection. It is important to file TDS/TCS returns accurately and on time to avoid penalties and interest charges.
TDS and TCS Return Filing Due Dates
The due dates for filing TDS and TCS return forms vary depending on the type of return and the quarter in which the return is being filed.
For TDS returns, the due dates are as follows:
- Form 24Q, which is used for TDS on salaries:
- Q1 (April to June): July 31st
- Q2 (July to September): October 31st
- Q3 (October to December): January 31st
- Q4 (January to March): May 31st
- Form 26Q, which is used for TDS on payments other than salaries:
- Q1 (April to June): July 31st
- Q2 (July to September): October 31st
- Q3 (October to December): January 31st
- Q4 (January to March): May 31st
- Form 27Q, which is used for TDS on payments made to non-residents:
- Q1 (April to June): July 31st
- Q2 (July to September): October 31st
- Q3 (October to December): January 31st
- Q4 (January to March): May 31st
- Form 27EQ, which is used for TCS returns:
- Q1 (April to June): July 31st
- Q2 (July to September): October 31st
- Q3 (October to December): January 31st
- Q4 (January to March): May 31st
It is important to note that these due dates are subject to change by the Income Tax Department, so it is always best to check the latest due dates on their website or with a tax professional.
E-TCS and E-TDS Return Filing
Under Section 206 of the Income Tax Act, corporate and government deductors are required to file their NSDL TDS returns electronically (e-TDS returns). However, for other deductors, filing TDS returns online is optional, and they may choose to file in physical form instead.
For TCS returns, it is mandatory for corporate and government collectors to file electronically (e-TCS returns), while other collectors have the option to file electronically or in physical form. Taxpayers can file TDS and TCS returns using specialized return filing software.
Penalty for Late Filing of TCS Return and TDS Return
Late filing of TDS and TCS returns can result in penalties of Rs. 200 per day for the duration of the default. However, the penalty cannot exceed the amount of TDS or TCS for which the return is being furnished. Taxpayers must ensure timely compliance with all TCS and TDS filing requirements, including submitting Form 26Q TDS, Form 27Q TDS, or Form 27EQ before the applicable return deadlines to avoid penalties for late filing.
Why Choose Ahuja & Ahuja Chartered Accountants?
At Ahuja & Ahuja Chartered Accountants, we are committed to providing our clients with the highest quality of service. We understand that TDS and TCS return filings can be complex and time-consuming, which is why we offer our clients peace of mind by taking care of their tax compliance needs.
Our team of experienced Chartered Accountants has a deep understanding of Indian tax laws and regulations, and we leverage our expertise to ensure that our clients remain compliant with all relevant tax laws. We also offer our clients competitive pricing and exceptional customer service, making us the preferred choice for businesses in the NCR region of New Delhi, Noida, Gurugram (Gurgaon), and Greater Noida.
Contact Us Today
If you need help with TDS and TCS return filings, contact Ahuja & Ahuja Chartered Accountants today. Our team of experienced Chartered Accountants will work with you to ensure that your tax compliance needs are met, allowing you to focus on running your business.
Frequently Asked Questions about TDS
What should I do if my TDS is not reflected in Form 26AS?
If you find that your TDS is not reflected in your Form 26AS, you should contact the payer and ask for the reasons why the TDS statement has not been filed or if there are any errors in the PAN entered.
What will be the tax deduction rate if I do not furnish my PAN?
If you do not disclose your PAN, the deductor will deduct tax at a higher rate of 20% as per Section 206AA of the Income Tax Act.
Can I submit Form 15G/15H for non-deduction of TDS if I don’t hold a PAN?
No, a declaration in Form 15G or Form 15H will not be considered valid if it does not contain the PAN of the person making the declaration. If the declaration is submitted without the PAN, tax will be deducted at the rate of 20%.
Will I face any consequences if I use TDS for personal needs instead of depositing it in the government’s account?
Yes, failure to remit tax deducted within the prescribed time limit will attract interest, penalty, and imprisonment up to seven years.
Can I claim TDS in my return of income if I have not received the TDS certificate from the deductor?
Yes, you can claim TDS in your return of income if it is reflected in your Form 26AS. If there is any variance between the tax actually deducted and the tax reflecting in Form 26AS, you should inform the deductor and reconcile the differences.
Can a deductor file separate TDS/TCS returns for each branch or can he file a consolidated return for all branches?
Yes, a deductor can file a consolidated TDS/TCS return for all branches provided that they have the same TAN. They can also file branch-wise returns if they have a separate TAN for each branch.
Can I file Form No. 26Q separately for contractors, professionals, interest, etc.?
No, you cannot file separate Form No. 26Q for each type of payment made to residents. You can only file a single Form No. 26Q with separate annexures for contractors, professionals, interest, etc.
When does a TDS statement get ‘Partially Accepted’?
A TDS statement gets partially accepted when the PAN in any of the entries in the correction statement is invalid, i.e. the PAN does not match with the PAN in the master database.
What are the different statuses of a challan in the TDS/TCS statement?
The different statuses of a challan in the TDS/TCS statement are: Booked, Match Pending, Match Failed (Challan), and Match Failed (Transfer Voucher).
How should foreign individuals without a PAN be treated in the TDS statement?
Foreign individuals working in India should have a PAN card to have TDS deducted on the regular rate. If a foreign individual does not have a PAN, regular provisions that are applicable to residents will also apply to them, and TDS will be deducted at a higher rate of 20%.