Tax deducted at Source (TDS) is a mechanism under which tax deduction takes place at the time of payment made to a payee. The deductors are liable to deposit the tax collected to the Income Tax Department within the due date. TDS return is a statement that each deductor has to mandatorily submit to the Income Tax Department quarterly. However, you can file a TDS return online on the TRACES portal can be a tricky and time-consuming process.

In this post, you will find a detailed guide on how to file your TDS returns online effortlessly. Read on!

How to File TDS Return Online?

In order to file TDS return online on the new portal, individuals or entities need to have the following:

PAN cards of deductor or deductee
TDS challan information
Information on tax amount paid to the government
Other paperwork, if required

Once these documents are available, you can follow these easy steps to file TDS returns quarterly:

Step 1: To file TDS returns quarterly, you need to fill out Form 27A. This form contains various columns that need to be filled out carefully. Furthermore, you will have to validate the returns using File Validation Utility (FVU).
Step 2: Once you visit the new e-filing portal, log in using your TAN and password.
Step 3: After logging in, select ‘Upload TDS’ from the TDS option available on the top navigation bar.
Step 4: Here, you will see a form with necessary columns. Fill in details such as TAN, FVU version, financial year, form name, quarter, and upload type. Then, press on ‘Validate.’
Step 5: Now, you can validate through DSC or EVC.
Step 6: To validate using DSC, you need to upload the TDS zip file and attach the digital signature file. Then, click on ‘Upload.’
Step 7: To validate using EVC or Electronic Verification Code, you need to upload the TDS zip file and select ‘Click here to E-verify.’ A list of options will appear on the screen; you can choose to use an already generated EVC or generate a new one. Select the one that is applicable. After that, fill in the EVC and click on ‘Submit.’
Step 8: After you have completed submission and verification, a success message will appear on the screen. Then you will receive a transaction ID and a token number. After 24 hours of filing TDS, you can check the status by using the token number.

Refund of TDS for Different Types of Payments

Here are some of the scenarios under which you can claim a tax refund:

Senior Citizens with Fixed Deposit (FD) Accounts

The interest income from fixed deposit accounts of senior citizens is eligible for tax exemption. If your age is above 60 years and you possess a fixed deposit account, you must furnish Form 15H to make sure your bank doesn’t deduct tax on your fixed deposit interest receivables.

Otherwise, while filing your Income Tax Returns (ITR), your bank account can be credited with the tax refund if such a need arises. The Income Tax Department computes your tax liability and makes adjustments for the additional tax paid. After that, it refunds the excess amount to a bank account that your ITR form specifies.

FD Interest Income is Lower than Tax Slab

If your income doesn’t come under the tax slab, but your bank charges tax on the fixed deposit interest income, then the following methods will help recover the additional tax:

Submit Form 15G to the respective bank and inform them that your income is below the tax bracket and you are not liable to pay taxes.
You can state the same in your ITR form, and the IT department will calculate your tax refund and transfer it to the bank account.

Company Deducts more TDS

When your actual tax liability doesn’t tally with the tax that your employer deducted, you can resolve the issue through your ITR filing. While filing the return, you should mention the bank name and its IFSC code. The Income Tax Department will return an additional tax amount to your bank branch.

TDS Refund Examples

Let’s clear your concept with the following examples:

Example 1

Rita works in an IT firm in Chennai. In FY 2019-20, she was late to submit her documents related to LIC premium deduction under Section 80C. For this, her firm deducted an additional TDS of Rs. 8,000. The chart below gives the details:

Tax payable for Rita in FY 2019-20	Rs. 40,000
Tax deducted from Rita’s salary	Rs. 48,000
Tax refund applicable for Rita	Rs. (48,000 – 40,000) = Rs. 8,000

For the FY 2019-20, her total tax payable amounted to Rs. 40,000, but it should be actually Rs. 32,000. She paid an additional amount as she couldn’t receive her LIC premium receipts within the stipulated time.

Example 2

Jay couldn’t make an investment of Rs. 50,000 within the time period that his employer had set. He was confused about whether to opt for a life insurance plan or a long-term fixed deposit. He couldn’t arrive at a decision and missed the due date of submitting tax proof. As a result, he paid an excess tax even though he made investments before the end of the year.

Every fiscal year, a number of people face such issues. If they want a refund of the additional tax, they must file their ITR.

Prerequisites for Filing TDS Return

Before deductors file TDS returns, they should pay attention to the following predetermined conditions set by the Income Tax Department.

One must have a valid and registered TAN for e-filing.
The preparation of a TDS statement should take place using Return Preparation Utility (RPU).
Validation of TDS statement should take place using File Validation Utility (FVU).
If one wants to avail the digital signature facility while authenticating TDS returns, he/she needs to have a valid DSC certificate.
It is mandatory to provide bank account or Demat account details or link PAN with Aadhaar to use electronic verification via EVC.
A deductor needs to pay the total TDS amount before filing TDS returns.

Also Read: A Concise Guide To Understanding TDS On Salary And Calculating It Step By Step

Eligibility Criteria for TDS Returns

Under the TDS mechanism, a deductor needs to collect taxes from a deductee’s source of income while making a payment. It is vital to know the payment categories for which one needs to file TDS returns. The categories are as follows:

Salary payments
Any income through winning crossword puzzles, lotteries, or other games
Income generated by winning horse race
Income from securities
Insurance commission
Income through the sale or purchase of an immovable property
Rent payment
Payments made towards schemes like National Savings Scheme

Meaning of Revised TDS Returns

If you make an error while completing the filing process mentioned above, the Income Tax Department allows you to revise TDS returns. The mistakes can be regarding details of the payee, TDS amount, challan details, etc.

To file revised TDS returns, you need to successfully submit the original TDS form. Furthermore, the TIN central system must accept this original form. After this, you need to obtain the latest TDS statement from the TRACES website. After clicking on ‘urge for conso file’, you can make amendments.

Different Types of TDS Forms

There are four types of TDS forms based on the purpose of tax deduction and the nature of payment. In addition to any of these forms, one needs to present a digital signature on Form 27A.

Form	Details
Form 24Q	Salary payment
Form 26Q	All payments other than salary
Form 26QB	Sale or purchase of immovable property
Form 27Q	Income from interest, dividend, where deductee is a non-resident

Also Read: Section 194A Of Income Tax Act

Time Required to Refund TDS

Specific factors determine the TDS refund time period. If you’ve submitted your income tax returns on time, you can expect to receive your refund anywhere between 3-6 months. The refund tenure is also based on your e-verification completion. If you haven’t received the refundable amount on time, you can do the following:

You can ask your employer for Form 16 verification.
Contact Ombudsman- Income Tax Department.
Keep in touch with your Income Tax office.

To get more details regarding TDS refund or ITR, you must follow the IT Department’s official portal.

How to Track TDS Refund Status

Follow this process to track your TDS refund status online:

Go to the e-Filing portal.
Sign in to the account after furnishing your User ID, Date of Birth/Date of Incorporation, Password and CAPTCHA.
Choose ‘My Account’ and opt for ‘Refund/Demand Status’.

Your screen will display the mode of payment, reason (when there’s a failure), status, and assessment year.

Categories of TDS Refund Status

Status of TDS refund can be of the following types:

Rectification processed no refund, no demand
Demand determined rectification processed
Refund determined, forwarded to Refund Banker and rectification processed
Demand determined
Connect with jurisdictional Assessing Officer
Refund unpaid
Refund determined and forwarded to Refund Banker
ITR processed
No refund, no demand
Refund paid
Not determined
For the assessment year, no e-Filing is there

Provision for Delay in TDS Refund

As per Section 200A of the Income Tax Act, 1961, if the Income Tax Department delays the payment of your TDS refund, then you can avail of 6% annual interest on the refundable amount. Such an interest is applicable from April of any fiscal year.

However, you are not eligible for an interest in case the refund is below 10% of your tax payable during a financial year. Interest payable on your tax refund will be taxable as it falls under the category of other sources of earnings.

Final Word

Tax Deducted at Source (TDS) helps the Income Tax Department function smoothly and effectively. However, many taxpayers are still unaware of how to file TDS returns online. The extensive application and validation process can make filing TDS returns burdensome and confusing. Nonetheless, by following the steps mentioned above, you can complete the entire process in no time.

FAQs on How to File TDS Return Online

1. Is there a penalty for the late filing of TDS returns?

Yes, Section 234E of the Income Tax Act sets provisions for late filing of TDS returns. If persons fail to do so on or before the due date, they have to pay a penalty fee of Rs. 200 for each day. However, this amount cannot exceed the tax deducted at the source amount.

2. What is TAN?

Tax Deduction and Collection Account Number or TAN is a 10-digit unique code assigned by the Income Tax Department. Only those who are liable to deduct or collect taxes are eligible to receive a TAN.

3. What is a TDS Certificate?

TDS certificate or Form 16 is a certificate issued by entities or individuals responsible for deducting taxes. It informs payees about how much tax they pay and any other transaction between deductor and deductee.

4. In which case does TDS not get deducted?

When an individual or entity makes a specific payment to a payee mentioned under the Income Tax Act, they have to deduct TDS. However, if the deductor is an individual or HUF whose books do not require auditing, then TDS deduction is not compulsory.

5. What are the benefits of filing TDS returns on time?

If one files TDS returns on time, it reduces the tax burden at the year-end. One does not have to pay a lump sum amount when the financial year ends. It reduces the chances of tax evasion, and a person can avoid paying hefty penalty fees.