TDS Returns

TDS Return is required to be filed by any person who is liable to deduct tax at source.  A TDS Return is a quarterly statement which has to be submitted to the Income Tax Department of India. Submitting TDS Return is mandatory if you are a deductor. It should contain all details of TDS deducted and deposited by you for a particular quarter.

The first requirement for filing a TDS Return is to obtain a valid TAN (Tax deduction account number). You need to assess if you are required to deduct TDS on which payments. Usually, all types of payments such as Salaries, Interest, Professional Fees, Payment to Contractors, Rent of Machinery, Rent of Building etc are covered under liable payments.  There are prescribed rates for every type of TDS payments under the income tax act 1961.

To revive the economy and help the taxpayers while the COVID 19 crisis is prevailing in India, the FM Minister on 13th may 2020 announced new TDS rates by reducing 25% for non-salaried section. This reduction shall be applicable for the remaining part of the FY 2020-21. These new rates will be in force from the 14th of May, 2020 to 31st March 2021. 

Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.

That means if you were liable to pay TDS at the rate of 10% earlier now you will have to pay the TDS at the rate of 7.5% only.

Types TDS return forms:

TDS return Form 24Q: Statement for tax deducted at source from salaries

TDS return Form 26Q: Statement for tax deducted at source on all payments other than salaries.

TDS return Form 27Q: Statement for tax deduction on income received from interest, dividends, or any other sum payable to non residents.

TDS return Form 27EQ: Statement of collection of tax at source.

So If you are a deductor and has made payments to resident Indians with regards to any of above, you should file Form 24Q (TDS on salary payments) and Form 26Q (TDS on payments other than salaries) on a quarterly basis. If you have made any payments to non-residents, you are required to file Form 27Q on a quarterly basis.

Form 16A and Form 16 (TDS Certificates) can only be generated if you have correctly filed your TDS Returns.