TDS related slides and how to file TDS returns and correction or modification on tds return. what is PAn what is TAN, issues faced during tds returing filling, corrections based on the notice received from income tax departments, income tax payments, notices related to income tax and tds returns

1. RRSK & ASSOCIATES
Chartered
Accountants

2. Let’s understand the Background
RRSK & ASSOCIATES
Chartered
Accountants
Makes Specified Payment
Expenditure in the Hands of
remitter.
This can be claimed as an
allowable expenditure subject
to conditions.
Income in the Hands of the
Recipient.
Should disclose the same in
Tax return and remit taxes.
WHY TDS

3. RRSK & ASSOCIATES
Chartered
Accountants
To collect Tax from the very Source
(Pay tax as you earn)
Beneficial to Assessee – Burden of the tax payment at
year end is reduced.
Beneficial to Government – Collection of taxes is
spread across the year (Stable revenue)
Tax deducted is credited against the recipient of Income
thereby reducing Default in filing of returns
W
H
Y
T
D
S
?

4. TDS explained . .
 A person (deductor)
 liable to make payment of specified nature
 to any other person (deductee)
 shall deduct tax at source
 At a specified rate
 Remit the same into the account of the Central Government
 The deductee is entitled to get credit of the amount so
deducted
RRSK & ASSOCIATES
Chartered
Accountants

5. TAN (TAX DEDUCTION ACCOUNT NUMBER)
Unique 10 digit alpha numeric identification number
Section 203A mandates quoting of TAN
Form 49B to be filed online to apply for TAN
TIME OF DEDUCTION OF TDS
At the time of payment
Or Credit
Whichever is EARLIER
RRSK & ASSOCIATES
Chartered
Accountants

6. TDS RETURNS
1. Form 24 Q - Deductions made in a salaried case
2. Form 26 Q - Deductions made in the non-salaried case
3. Form 27 Q - Deductions made in the case of NRIs
4. Form 26QB - Deduction of tax u/s 194-IA.
5. Form 26QC - Deduction of tax u/s 194-IB.
TDS CERTIFCATES
1. Form 16: which is issued by the employer to the employee
incorporating details of tax deducted by the employer
throughout the year, and
2. Form 16A: which is issued in all cases other than salary.
RRSK & ASSOCIATES
Chartered
Accountants

7. TIME LIMIT FOR DEPOSIT OF TAX
RRSK & ASSOCIATES
Chartered
Accountants
Deductor is
other than
Govt
• Where the amount is credited or paid in the month of
March
• On or before 30th day of April
• In any other case
• On or before 7 days from the end of the month in which
the deduction is made
Deductor is
office of
Govt
• Where tax is paid without production of an income-tax
challan On the same day when tax is deducted
194M/ 194
IA/ 194 IB
• 30 days from the end of the month in which the deduction
is made
• shall be accompanied by a challan-cum-statement
• Form No. 26QB / 26QC /26QD

8. TIME LIMIT FOR FURNISHING RETURNS
RRSK & ASSOCIATES
Chartered
Accountants
Quarter Form 24Q (Salary) Form 26Q (Other than
Salary)
1st
July 31st July 31st
2nd
October 31st October 31st
3rd January 31st January 31st
4th May 31st May 31st
FURNISHING OF TDS STATEMENT ELECTRONICALLY
 Using digital signature or
 with the verification of the statement in Form 27A

9. Consequences - Default in payment of TDS
 Disallowance of expenditure as per section 40(a)(i)
 Levy of interest: As per section 201, 1.5% p.m on the amount of tax
deducted at source subject to amount of TDS
 Levy of Penalty
 Punishable with imprisonment – 3 Months to 7 years
Consequences - Default in Deduction of TDS
 Levy of Interest – As per Section 201, 1% p.m on the amount of tax
deducted at source will be levied subject to the maximum amount
of TDS
Consequences - Late filing of TDS Return
 If the deductor fails to furnish the TDS return on or before the
specified due date, he shall be liable to pay a penalty under section
234E of ₹ 200 per day till the date of default subject to the
maximum amount of TDS is levied.
RRSK & ASSOCIATES
Chartered
Accountants

10. Filing of TDS Returns
RRSK & ASSOCIATES
Chartered
Accountants

11. Modes of Filing the returns
RRSK & ASSOCIATES
Chartered
Accountants
• Through TIN-FC
• Through E-filing portal
Regular
Return
• Correction statements through TRACES
• E-filing by way of revised return
• Revised Return through TIN-FC
Corrections

12. Pre-Requisites
 TAN (Tax Deduction Account Number)
 PAN (Permanent Account Number)
 Transaction Details
• Name of the Payee with PAN
• Date of payment
• Section of tax deduction
• Rate of tax deduction
 Payment Details
• Challan Number and Date
• Challan Amount
• BSR Code
RRSK & ASSOCIATES
Chartered
Accountants

13. Prepare TDS Returns – Return preparation
utility (RPU)
 Prepare TDS Return using the Return preparation Utility
 Fill in the Details of the Deductor, Challan, Transactions and
Deductee details with the section numbers
 Download the CSI (Challan status Inquiry) File from OLTAS website
to validate the challan details
 Save the file and then click on the Create File
 In the Challan input file name - select the downloaded CSI File
 Error and statistics report file path - select the folder to generate
the return. Then click on Validate.
 With the registered TAN Log into E-Filing portal and file return.
RRSK & ASSOCIATES
Chartered
Accountants

14. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants
Click on downloads and
then click on Regular option
under e-TDS/e-TCS
Download
the Utility
Open this Java
file - Utility
Select the return
to be filed

15. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants

16. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants
Fill in TDS
details in Form,
Challan and
Annexure tabs

17. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants

18. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants

19. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants

20. Screenshots of the process
RRSK & ASSOCIATES
Chartered
Accountants
Login to
Income tax
portal
Upload fvu
file in zip
format
Upload Signature
file using DSC
Management utility
Status of the
uploaded return

21. Corrections in TDS Returns
RRSK & ASSOCIATES
Chartered
Accountants

22. Corrections through Return preparation Utility
RRSK & ASSOCIATES
Chartered
Accountants

23. Corrections through TRACES
RRSK & ASSOCIATES
Chartered
Accountants
Validate the in progress
correction with DSC – To
initiate online correction

24. Response to TDS Notice
RRSK & ASSOCIATES
Chartered
Accountants

25. RRSK & ASSOCIATES
Chartered
Accountants
Download Details of the TDS Notice
login to traces using
CREDENTIALS
click on
communications >
inbox
View Details
Request for
Download Intimation
Download
Intimation for
the Details of
Notice

26. Upload Correction statement
RRSK & ASSOCIATES
Chartered
Accountants
Validate the in progress
correction with DSC – To
initiate online correction

27. TDS Practical Issues
RRSK & ASSOCIATES
Chartered
Accountants

28. Who should deduct TDS
 Any person defined under Income tax act
 Except Individual and HUF whose books are not required to
be audited
• Rent payments made by individuals and HUF exceeding Rs
50,000 per month, are required to deduct TDS @ 5% even if
the individual or HUF is not liable for a tax audit
RRSK & ASSOCIATES
Chartered
Accountants

29. How to know if a transaction attracts TDS?
Transactions specified in the Section 192 – 195 attracts TDS.
There are some cases where TDS is not Deducted such as:-
1. On declaration furnished by the payee on Form 15G or 15H.
2. Payment to Government/RBI/Statutory Corporation etc.
3. Exempt Incomes
4. On certificate issued by ITO u/s 197
5. Interest earned on NSC, KVP, or Indian Vikas Patra Scheme
6. Interest earned from recurring deposits or Savings Account
opened in co-operative societies.
Some of the tricky transactions that fits into TDS ambit:
× Subscription to journals - No TDS
 Advertisement in Journals attracts TDS
× Software in CD – No TDS
 Customised software attracts TDS
RRSK & ASSOCIATES
Chartered
Accountants

30. Latest Amendments in few years
Section 194Q – effective from July2022, TDS @ 0.1% on purchase
of any goods of the value or aggregate of value exceeding fifty lakh
rupees.
Section 194R – TDS @ 10% on benefit or perquisite of a business or
profession
Section 194S – effective from July2022, TDS @ 1% on transfer of
Virtual Digital Assets (VDAs), Cryptocurrency, NFTs
Section 206AB – Higher rate of deduction of tax at source for non-
filers of income-tax return
RRSK & ASSOCIATES
Chartered
Accountants

31. TDS on Payment by E-Commerce Operator to Participants
Section 194O – E-Commerce operator to deduct tax @ 1% of the
gross amount of sale of goods/services on payment to E-
Commerce participant
RRSK & ASSOCIATES
Chartered
Accountants
E-Commerce
Participant
Buyer
E-Commerce Operator
TDS

32. Questions
Q: TDS provisions on “Provisions made in the books of accounts”?
TDS mechanism cannot be put into practice until identity of the person in
whose hands, it is includible as Income can be ascertained
TDS shall be made only if the payee was identified and quantum of
payment was also ascertainable on the last day of the FY.
Q: What is the solution available to tax payer if a Sum reflected in Form
26AS is not actually his income but he has received a demand notice from
AO to remit taxes for the same?
Assessee can produce necessary documents to substantiate his stand.
Q: At what rate TDS is to be deducted if deductee do not furnish PAN?
As per Section 206AA at 20%.
RRSK & ASSOCIATES
Chartered
Accountants

33. Questions
Q: Claim of TDS Credit Deducted by the Employer but not Paid by it to the
Government?
Employee is eligible to claim the TDS deducted.
Section 205 provides that where tax is deductible at source, the assessee
shall not be called upon to pay the tax himself to the extent to which tax
has been deducted from that income
Q: Can Individuals submit Form 15G, Form 15H to avoid TDS on dividend
income too?
Declaration can be filed by the individual if total dividend income does not
exceed the maximum exemption limit and tax on the estimated total
income for the financial year in which such income is to be included is nil
RRSK & ASSOCIATES
Chartered
Accountants

34. Questions
Q: Is employer answerable for Short deduction of tax on Salary?
Short deduction of tax under section 192 for any reason would
justify action of the AO in treating the employer as Assessee in
default
Q: Can Depreciation be claimed on a property where TDS u/s 194Q
is not complied?
Non-deduction of tax on the purchase of assets cannot take away
the right to claim depreciation, if the Asset happens to be a Non-
current Asset since Depreciation is not an expenditure but an
allowance.
RRSK & ASSOCIATES
Chartered
Accountants

35. Questions
Q: Whether the deduction of tax at source under sections 194C and
194J has to be made out of the gross amount of the bill including
reimbursements or excluding reimbursement for actual expenses ?
Sections 194C and 194J refer to any sum paid. The section hence
conveys reimbursements cannot be deducted out of the bill amount
for the purpose of tax deduction at source. To overcome this, it is
advisable to have a separate bill/invoice for reimbursement of
expenses
Q: Whether TDS is applicable to the component of GST?
TDS is not recoverable on component of GST
RRSK & ASSOCIATES
Chartered
Accountants

36. RRSK & ASSOCIATES Chartered Accountants
Sivakumar R
Sivakumar.r@rrsk.in / 94440 18283
Vijayalakshmi Y ( )
Vijayalakshmi.y@rrsk.in / 94440 16782
Aarthi S (9884116057)
Aarthi.s@rrsk.in / 98841 16057