Description
- Save taxes and penalties.
TDS is the tax deducted by a person (Deductor) who is liable to make payment of specified nature to another person (deductee) as prescribed by Income Tax Act.1961. The concept of the same is to collect the tax at the source of income. Deductor will deduct the tax on behalf of the Government and deposit it with the Government, which ultimately got available to the deductee. Deductee will get a certificate in lieu of this, and he can claim the amount of TDS as advance tax paid to the government when filing his Income-tax return.
TCS is collected by the person who is receiving the payment against specified transactions. The rest of the concept is the same as TDS.
To have a proper reconciliation and ensure the credit of tax deducted/collected at source should be available to the right person, TDS and TCS returns are required to be filed by the deductor periodically.
Mainly following TDS returns are filed.
TDS Return Form 24Q – for Salary payment
TDS Return Form 24QB – on payment being made for the transfer of immovable property
TDS Return Form 27Q – a payment to non-resident required TDS deduction
TDS Return Form 26Q – any other case like interest payment, commission payment, professional fees payment, contractual payment etc.
Penalty for non-filing of TDS return
Section 234E of Income-tax act: The deductor will be charged INR 200/day until TDS is paid [Subject to the maximum of the TDS amount]
Section 271H of Income-tax act: In case wrong details are submitted, such as Incorrect PAN, Income tax amount etc. then the penalty may range between INR 10,000 – 1, 00,000
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