TDS deduction is mandatory for all persons other than individuals and HUF who are required to get their books of accounts audited. TDS is required to be deducted when the payment exceeds a certain limit during the financial year, compliance with TDS provisions requires an understanding of various limits, due dates, and other rules. Our TDS return filing and consulting service support clients to comply with TDS provisions on time and enables them to reduce interest costs and penalties in the income tax act.
What is Tax deducted at source (TDS)?
TDS is a method of collection of income tax in the same year of earning the income, it is the duty of the person making the payment to deduct TDS from the amount of payment at the rate prescribed under the income tax act. TDS deducted and paid into the credit of pan number will be reflected in Form 26as of the person receiving the payment once TDS return filing done by the deductor, TDS certificate will also be issued by the deductor. At the end of the financial year, the TDS amount will be used to pay tax liability for the financial year, or else a refund can be claimed in case the tax liability is less than TDS deducted.
How to file TDS return?
TDS return filing process starts from getting details of tax deducted, calculation of interest payable for delay in payment of TDS deducted etc. TDS return will be prepared in TDS return preparation utility or third party TDS return preparation software. There are separate forms for filing TDS returns for TDS deducted from salary and separate form for TDS deducted on other payments. TDS return shall be filed on time to avoid interest on late deduction and interest on late payment of TDS to government account. Once TDS return are filed, the FORM 16 or FORM 16A can be downloaded from traces portal by submitting details used for filing TDS returns.
Details required for TDS return filing
- If payment for TDS is made, details of such payment challan.
- Details of persons for whom payment is TDS is deducted.
- Nature of payment, rate at which TDS is deducted.
- PAN and TAN details of deductor.
- PAN details of person for whom TDS is deducted.
- Details of previous filed TDS return acknowledgement.
- Business address, contact details, of the deductor.
Steps to Register
Preparation of TDS return
Filing for TDS returns
Generation of from 16 and 16A
From Auditor DESKTDS deduction is mandatory for all partnership firms and private limited companies, irrespective of the turnover. It is recommended to have a track of total payments to contractors, and other suppliers of services for determination of TDS deduction on payment to them.
Frequently Asked Questions
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Do we need to collect documents from employees evidencing deductions for calculating the amount of TDS to be deducted ?