There are several forms, based on the nature of deduction:
- Form 24Q: To be filled out for all the deductions made from salaries.
- Form 26Q: To be filled out for all the deductions made from payments other than salaries.
- Form 27Q: It is the TDS quarterly return to be filled out by the deductor for all the deductions made in the case of NRIs.
- Form 27EQ: It is the TCS quarterly return to be filled out by the deductor.
The TDS Returns need to be filed, on a quarterly basis and the due date for the same is 31st of the month after the end of the concerned quarter.
- All corporate deductors (w.e.f. June 1, 2003) are required to submit their TDS returns in electronic form (e-TDS return).
- From F.Y. 2004-2005 onwards, furnishing e-TDS return is also mandatory for government deductors.
- Deductors (other than government and corporate) may file TDS return in electronic or physical form.
Forms for filing TDS returns, whether electronically or physically, are the same. However, e-TDS Statements should be prepared as per the file format (Clean text ASCII File) in accordance with specifications provided by the Income Tax Department. To ensure ease of preparation, the government has also provided free & downloadable software (Return Preparation Utility – RPU) that has been developed by NSDL.
There are also many third-party software vendors to whom the task of preparing e-TDS Statements can be outsourced. The list of the approved vendors is available on NSDL -TIN website (www.tin-nsdl.com).
Consequences of Missing the Above Mentioned Timelines
TDS needs to be deducted by the 30th of each month and in the month of February, it should be deducted by the last day of the month. If the TDS is not deducted on the required due date, whether in whole or in part, then the concerned deductor is liable to pay interest, applicable at a rate of 1% per month or part thereof, from the date when it should have been deducted to the actual date of deduction.
For instance, if the TDS Amount was to be deducted for the month of July (i.e. 30th of July), but it was actually collected on 5th August, then interest will be 2% (For the month of July and August)
Delay in TDS Payment
If the deducted TDS is not deposited with the concerned authorities by the given timelines, whether in whole or in part, as per Section 201(1A), the deductor is liable to pay an interest, applicable at a rate of 1.5% for every month or part thereof, from the date on which TDS was collected to the date on which such tax was actually remitted to the credit of the Government.
Calendar month is considered in calculating interest and any fraction of a month is deemed to be a full month. Hence even a delay of one day would mean that you have to pay interest for two months. For example, if TDS is deducted in month of July and deposited on 8th of August then you have to pay interest for 2 month i.e. July and August. Total interest payable shall be 3%.
In addition to the interest clause applicable, there are additional provisions for penalty and prosecution proceedings as well.
- Penalty under Section 221– In case the Assessing Officer is convinced that the assesses has failed to deduct tax as required, without any good and adequate reason, the defaulter is liable to imposition of penalty. The quantum of penalty is not to exceed the amount of tax in arrears.
- Penalty under Section 271C– A penalty equal to the amount of tax the deductor has failed to deduct can be imposed. However, such penalty is only leviable by a Joint Commissioner of Income Tax.
- Prosecution proceedings under Section 276 B– Where the deductor has failed to deposit the tax deducted at source, with the concerned government authorities, without a reasonable cause, then he/she is punishable with rigorous imprisonment for a period which shall not be less than 3 months but which may extend to 7 years and with fine.
- As per Section 234E, in case an assessee fails to submit the TDS return within the specified due dates, they will be liable to a penalty of Rs. 200 per day till the time the TDS return is actually submitted. However, the penalty amount cannot exceed the total amount of TDS collected. This penalty is also applicable in case of furnishing Form 26 QB, in case of purchase of immovable property.