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!
In order to file TDS return online on the new portal, individuals or entities need to have the following:
Once these documents are available, you can follow these easy steps to file TDS returns quarterly:
Here are some of the scenarios under which you can claim a tax refund:
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.
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:
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.
Let’s clear your concept with the following examples:
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.
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.
Before deductors file TDS returns, they should pay attention to the following predetermined conditions set by the Income Tax Department.
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:
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.
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 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
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:
To get more details regarding TDS refund or ITR, you must follow the IT Department’s official portal.
Follow this process to track your TDS refund status online:
Your screen will display the mode of payment, reason (when there’s a failure), status, and assessment year.
Status of TDS refund can be of the following types:
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.
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.
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.
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.
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.
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.
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.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
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