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Basic Introduction of TDS
Basic Introduction of TDS
TDS
Basic Introduction of
TDS
Another reason for TDS Deduction is Assessee pays taxes in the assessment
year on the income earned in the Previous Year and accordingly, the tax
collection by government gets delayed till the completion of the previous
year.
To enable the salaried people to pay the tax as they earn every month. This helps
the salaried persons in paying the tax in easy installments and avoids the burden
of a lump sum payment.
To collect the tax at the time of payment of income to various assesses such as
contractors, professionals etc.
There is always a time gap between deriving of income and payment of tax there
upon .The objective of introduction of the provision tax deduction at source is to
reduce that time gap and also ensure the regular flow of funds to government.
Government requires funds throughout the year. Hence, advance tax and tax
deducted at source help the government to get funds throughout the year and run
the government smoothly.
TDS –Tax Paid During The Year
Financial Year is the previous year, in which income has been earned.
Financial Year
Assessment year is the year in which Income Tax Return (ITR) is filed on the Basis of Income earned
in the previous year or Financial Year.
"Previous Year" means the financial year immediately preceding the assessment year.
Example:
Mr. RAM joins the company Webtel on 1st April 2022. During the year he
earned Income from Salary. The year closes on 31st March 2023, He is
Liable to pay taxes on his Income earned in the previous year. This implies
that the Financial Year in this case is from 1st Apr 2022 to 31st Mar 2023
and can be denoted as FY 2022-23.
RESPONSIBILITY SHIFTED TO THE ANOTHER PARTY
Deductor Deductee
▪ Deductor/Employer is a person who ▪ Deductee/Employee/Vendor is a
makes the payment. person on who’s earning tax has been
deducted.
▪ In other words, deductor is a person
who deducts the Tds. ▪ In other words, deductee is a person
who bares the ultimate tax liability.
Webtel Electrosoft is making a payment to Mr. Aarush, accordingly Webtel is the deductor and Mr.
Aarush is the Deductee.
2
4th character of the TAN
stands for
3
Company Name First
5 sequential
Letter
running series.
1
First 3 characters
of TAN stands for 4
Name of State Last Character of
the TAN number
DEL-Delhi would a check
MUM-Mumbai and digit.
so on.
DELA12345A
What is PAN no.? India’s Leading ‘e’ Compliance
Solutions Company
AAAPS1234A
2 5
A
1234
Status of the person 3 4
whether the person is Sequential Series
1
individual, Company, S A
AAA-ZZZ Firm, AOP, Trust etc.
Surname First Random Check digit
Any Alphabet from Letter or name’s
AAA to ZZZ first letter
Why PAN is mandatory in case of TDS/TCS? India’s Leading ‘e’ Compliance
Solutions Company
Form 24Q
Payment of Salary
Form 26Q
Payment of other than salary to
residents
Form 27Q
Payment to NRI other than salary
Form 27EQ
Payment of TCS
TDS RETURN PROCESS FLOW India’s Leading ‘e’ Compliance
Solutions Company
06 01
TDS Return filing is a simply process and it requires a specific format of files to be upload
on Government Portal. It is compulsory for Deductors to submit a TDS return on time.
Every person involved in the filing of return has performed specific role which follows
(a) TAN
(b) PAN if available
Deductors Information Deductor
(c) Name and Address
(d) Authorized Signatory with mobile and Email Id
PROCESS OF RETURN FILING India’s Leading ‘e’ Compliance
Solutions Company
Deductor have many responsibilities while making payment with TDS deduction. There is automatic
mechanism for filing TDS return because all data shall be interlinked with other.
Every tax payer can claim only credit of TDS which is reflecting in 26AS (information available in Income
Tax login of Tax payer) and this TDS data in 26AS will be reflected only after filing of return by Deductor.
On other side, Deductor is liable to deposit TDS /TCS amount on time and submit TDS return before due
date to avoid from Interest, Penalty and Late Fee.
FILES TO BE SUBMITTED AS TDS RETURN India’s Leading ‘e’ Compliance
Solutions Company
TDS return should be submitted in specific format called FVU. FVU is File Validation Utility provided by
NSDL to verify the e-TDS return format. It is a java based utility to validate the correct information as required
by Department. There is no need to take pdf or document version of return to be submit.
By using latest FVU Version Converter with the help of TDS Software convert data into folder. The folder
should contain the following items:-
S no. Attachment File Format Information Contains
1 Text file .txt File Encrypted Data of return in text format.
2 FVU .txt File All TDS related data i.e. Deductor, Deductee, Payment, Deposit etc.
3 CSI .csi File Challan reconciliation file with Bank Deposit details
4 Statics Report HTML Information about record maintain in fvu. file (Only for view)
5 Verification Latter PDF Signed by authorized signatory to verify the return
6 27A PDF Statement of tax deduction/collection of all the deductee/collectee.
7 If Challan mismatch HTML Electronic Statement Warning File
WEBSITES India’s Leading ‘e’ Compliance
Solutions Company
https://www.webtel.in/
9310230011
@mail.id
@webteldotin