TDS Returns
Under the Income Tax Act of 1961, a process known as TDS (Tax Deducted at Source) requires the person making specific payments (the deductor) to deduct tax at the source and deposit it with the government. Following tax deduction, the deductor is required to submit a TDS return detailing the amount of tax withheld and deposited.
TDS (Tax Deducted at Source)
Who Needs to File TDS Returns?
Any individual or entity (employer, company, or individual) with a valid TAN (Tax Deduction and Collection Account Number) that deducts TDS.
TDS is deducted on payments such as:
Salaries.
Interest payments (on fixed deposits, etc.).
Rent (if exceeding specified limits).
Professional and technical services.
Commission or brokerage.
Lottery winnings, horse race income, etc.
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Common TDS Forms:
The applicable TDS return form depends on the nature of the payment:
Form Purpose
Form 24Q TDS on salaries.
Form 26Q TDS on all payments except salaries (e.g., interest, commission, rent, etc.) made to residents.
Form 27Q TDS on payments made to non-residents (including NRIs).
Form 27EQ Tax Collected at Source (TCS).
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​Businesses must prepare and file TDS returns in order to maintain compliance with tax regulations. In addition to avoiding fines, timely deduction, payment, and accurate filing also foster trust among stakeholders, including the government, vendors, and employees. Professional assistance and automated tools can greatly streamline the procedure.
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