TDS & TCS Returns
TDS & TCS Returns
At Whytax, we provide comprehensive TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) return filing services to help businesses, professionals, and NGOs stay compliant with Indian tax regulations. Whether you are a deductor, collector, or a charitable organization looking to obtain tax exemptions, our experts simplify the entire process while ensuring accuracy and timeliness.
What Are TDS & TCS Returns?
TDS (Tax Deducted at Source)
Key Features
TDS is a mechanism where tax is deducted at the source of income. For example, when a company pays salary, commission, rent, or professional fees, it deducts a prescribed percentage of tax before making the payment. These deductions must be deposited with the government and reported through TDS returns.
TCS (Tax Collected at Source)
TCS applies when sellers collect tax from the buyer at the time of sale of specified goods like alcohol, scrap, minerals, and high-value goods. This amount must be deposited with the government and reported via TCS returns.
Both TDS and TCS are vital tools for the government to collect tax in advance and monitor income flows. Filing their returns accurately is crucial to avoid penalties and maintain financial credibility.
What Are TDS & TCS Returns?
TDS and TCS returns are quarterly statements filed by deductors/collectors to the Income Tax Department. These returns detail the tax collected or deducted and deposited, along with PAN details, amount paid, and nature of payments.
Timely and accurate filing is mandatory under the Income Tax Act, and failure to do so can lead to penalties and interest.
Who Should Deduct TDS & TCS?
You are required to deduct or collect TDS/TCS if you are:
• A company, firm, LLP, or sole proprietor (meeting turnover criteria)
• A government body
• A trust or society making specified payments
• Any buyer/seller involved in TCS-specified transactions (like sale of scrap, timber, etc.)
Due Dates for Deposit of TDS & TCS
| Particulars | Due Date |
|---|---|
| TDS Deposit (Monthly) | 7th of the following month |
| TCS Deposit (Monthly) | 7th of the following month |
| TDS for March | 30th April |
TDS & TCS Return Filing Due Dates
| Quarter | Period | TDS Return Due Date | TCS Return Due Date |
|---|---|---|---|
| Q1 | April – June | 31st July | 15th July |
| Q2 | July – September | 31st October | 15th October |
| Q3 | October – December | 31st January | 15th January |
| Q4 | January – March | 31st May | 15th May |
Penalty & Consequences of Non-Compliance
Non-compliance with TDS/TCS rules can be costly:
• Late Filing Fee: ₹200/day under Section 234E
• Penalty: ₹10,000 to ₹1,00,000 under Section 271H for incorrect or non-filing
• Interest: 1% to 1.5% per month for delay in deposit of tax
• Disallowance of Expenses: Non-deduction/disallowance of expenses under Section 40(a)(ia)
TDS & TCS Return Forms
| Form No. | Purpose |
|---|---|
| Form 24Q | TDS on salary payments |
| Form 26Q | TDS on non-salary payments to residents |
| Form 27Q | TDS on payments to non-residents |
| Form 27EQ | TCS on sale of specified goods/services |
FAQs on TDS & TCS Returns
1. What is the difference between TDS and TCS?
TDS (Tax Deducted at Source) is deducted when making specified payments like salary, rent, or professional fees.
TCS (Tax Collected at Source) is collected by the seller from the buyer at the time of selling specified goods or services.
2. Who is responsible for filing TDS returns?
Any individual, business, or entity that deducts TDS is responsible for filing quarterly TDS returns with the Income Tax Department.
3. Is TCS applicable to all businesses?
No, TCS is applicable only to businesses involved in specified goods and transactions such as the sale of scrap, minerals, motor vehicles, or foreign remittances above thresholds.
4. Can TDS returns be revised after filing?
Yes, TDS returns can be revised if you made any error in PAN, challan details, or deduction amount. We offer correction filing support.
5. What documents are required for TDS return filing?
You’ll need:
• PAN of deductor & deductees
• TAN registration
• Challan payment details
• Details of payments made (salary, contractor, rent, etc.)
• Bank statement & accounting records
6. What is TAN and is it mandatory?
Yes. TAN (Tax Deduction and Collection Account Number) is mandatory for any person or entity deducting or collecting tax at source. Without TAN, you cannot file TDS/TCS returns.
7. Can NGOs be liable to file TDS/TCS returns?
Yes. If an NGO pays salaries or professional fees above specified limits, it is liable to deduct TDS and file returns.
8. Is it mandatory to file a TDS return even if no tax was deducted in a quarter?
Yes. Even if no TDS was deducted in a quarter, a NIL TDS return must be filed if you're registered with a TAN and obligated to deduct TDS under normal circumstances.
9. What happens if the deductee's PAN is not available?
If the deductee's PAN is not provided, TDS must be deducted at a higher rate of 20% under Section 206AA.
10. Can I file TDS/TCS returns manually?
No. All TDS and TCS returns must be filed online through the Income Tax Department’s portal or through authorized TIN-FCs using Return Preparation Utility (RPU) and File Validation Utility (FVU).
11. What is Form 16 and Form 16A?
• Form 16: Issued for TDS on salary (Form 24Q)
• Form 16A: Issued for TDS on non-salary payments like professional fees or interest (Form 26Q)
12. Can I claim a refund if TDS is deducted in excess?
Yes. The deductee can claim a refund of excess TDS while filing their income tax return. The deductor must still report the full deduction in their TDS return.
13. What is Book Adjustment in TDS?
Book Adjustment refers to TDS deducted by government offices without producing a challan. Instead, it's accounted directly in their books and reported accordingly in returns.
14. What is the penalty for late TDS payment (not return filing)?
For delayed TDS payment, interest is charged at 1.5% per month (or part thereof) from the date of deduction to the date of deposit.
15. Can I file a consolidated TDS return for multiple branches?
No. Each TAN (Tax Deduction Account Number) is branch-specific. You need to file separate TDS returns for each TAN.
16. Can an NRI be subject to TDS?
Yes. Payments to Non-Residents (NRI) such as rent, interest, commission, or professional fees are subject to TDS under Section 195, often at special rates.
17. What if I deducted TDS but forgot to deposit it?
You will be liable for:
• Interest @ 1.5% per month
• Late payment penalties
• Disallowance of the corresponding expense
• Possible prosecution (in extreme cases)
18. What is the due date for issuing Form 16?
Form 16 (for TDS on salary) must be issued on or before 15th June after the end of the financial year.
We generate and dispatch Form 16/16A for all your deductees post-filing.
19. What is the difference between Form 16A and Form 26AS?
• Form 16A is a certificate issued by the deductor.
• Form 26AS is a cumulative statement showing all TDS/TCS and tax payments linked to your PAN.
20. Is TCS applicable on foreign remittances under LRS?
Yes. From FY 2020-21, TCS is applicable on foreign remittances under the Liberalised Remittance Scheme (LRS) beyond specified limits, usually at 5% or more.
