The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source, and remit the same into the account of the Central Government.
A TDS Return is a quarterly statement, which has to be submitted to the Income Tax Department of India. Submitting TDS Return is mandatory if you are a deductor. It has details of TDS deducted and deposited by you.
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Q.1 What is quarterly e-TDS/TCS statement?
TDS/TCS returns filed in electronic form as per section 200(3)/206C, as amended by Finance Act, 2005, are quarterly TDS/TCS statements. As per the Income Tax Act, these quarterly statements are required to be furnished from FY 2005-06 onwards. The forms used for quarterly e-TDS statements are Form Nos. 24Q, 26Q and 27Q and for quarterly e-TCS statement is Form No. 27EQ. These statements filed in CD/Pen Drive should be accompanied by a signed verification in Form No. 27A in case of both e-TDS/TCS statements.
Q.2 Who is required to file e-TDS/TCS return?
As per Income Tax Act, 1961, all corporate and government deductors/ collectors are compulsorily required to file their TDS/TCS returns on electronic media (i.e. e-TDS/TCS returns). However, deductors/collectors other than corporate/government can file either in physical or in electronic form.
Q.3 e-TDS/TCS returns have been made mandatory for Government deductors. How do I know whether I am a Government deductor or not?
All Drawing and Disbursing Officers of Central and State Governments come under the category of Government deductors.
Q.4 Under what provision should e-TDS/TCS returns be filed?
An e-TDS return should be filed under Section 206 of the Income Tax Act in accordance with the scheme dated August 26, 2003 for electronic filing of TDS return notified by the Central Board of Direct Taxes (CBDT) for this purpose. CBDT Circular No. 8 dated September 19, 2003 may also be referred.
An e-TCS return should be filed under Section 206C of the Income Tax Act in accordance with the scheme dated March 30, 2005 for electronic filing of TCS return notified by the CBDT for this purpose.
As per section 200(3)/206C, as amended by Finance Act 2005, deductors/ collectors are required to file quarterly TDS/TCS statements from FY 2005- 06 onwards.
Q.5 Who is the e-Filing Administrator?
CBDT has appointed the Director General of Income Tax (Systems) as e-Filing Administrator for the purpose of electronic filing of TDS/TCS returns.
Q.6 Who is an e-TDS/TCS Intermediary?
CBDT has appointed National Securities Depository Limited, (NSDL), Mumbai, as e-TDS/TCS Intermediary. NSDL has established TIN Facilitation Centres (TIN-FCs) across the country to facilitate deductors/ collectors file their e-TDS/TCS returns.
Q.7 What are the forms to be used for filing annual/quarterly TDS/TCS returns?
Following are the forms for TDS/TCS returns and their periodicity:
Form No. 24Q
Quarterly statement for tax deducted at source from ‘Salaries’
Form No. 26Q
Quarterly statement of tax deducted at source in respect of all payments other than ‘Salaries’
Form No. 27Q
Quarterly statement of deduction of tax from interest, dividend or any other sum payable to non-residents
Form No. 27EQ
Quarterly statement of collection of tax at source
Q.8 What is Form No. 27A?
Form No. 27A is a control chart of quarterly e-TDS/TCS statements to be filed in paper form by deductors/collectors along with quarterly statements. It is a summary of e-TDS/TCS returns which contains control totals of ‘amount paid’ and ‘income tax deducted at source’. The control totals of ‘amount paid’ and ‘income tax deducted at source’ mentioned on Form No. 27A should match with the corresponding control totals in e-TDS/TCS return. A separate Form No. 27A is to be filed for each e-TDS/ TCS return.
Q.9 What is the data structure (file format) for preparing e-TDS/TCS return?
e-TDS/TCS return should be prepared in accordance with the data structure (File Format) prescribed by the e-filing administrator.
Q.10 What is File Validation Utility (FVU)?
FVU is a program developed by NSDL, which is used to ascertain whether the e-TDS/TCS return file contains any format level error(s). When you pass e-TDS/TCS return through FVU, it generates an ‘error/response file’. If there are no errors in the e-TDS/TCS return file, error/response file will display the control totals. If there are errors, the error/response file will display the error location and error code along with the error code description. In case you find any error, you can rectify the error and pass the e-TDS/TCS return file again through the FVU till you get an error-free file.