e-TDS return has to be prepared in accordance with the file format prescribed by the Income Tax Department. NSDL has provided free downloadable utility at http://tin-nsdl.com for the purpose of preparation of e-TDS return. Alternatively, various softwares are available for preparation of TDS returns.
One can use TDSMAN software for preparation and filing of e-TDS Returns smartly and efficiently.
Following points should be noted while preparing e-TDS Returns:
Payment of TDS / TCS in Bank and Verification thereof
1. Challan no. 281 should be used for deposit of TDS/TCS.
2. Correct 10-digit Tax Deduction Account Number (TAN), name and address of the deductor/collector should be quoted on each challan used for depositing tax. TAN details should be verified from the Income Tax Department web-site.
3. Separate challans should be used to deposit tax deducted under different sections. Correct code for nature of payment should be indicated in the relevant column in the challan. (For example, 94C for payment to contractors and sub-contractors, 94I for rent).
4. Separate challans should be used to deposit tax deducted for different types of deductees, i.e. Corporate or Non Corporate.
5. It is mandatory for the following types of assessees to pay tax online with effect from April 1,2008.
a) All the corporate assessees.
b) All assessees (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.
6. Challan Identification Number ( CIN ) :
After the taxes are paid, the collecting bank branch will give a counter foil as acknowledgement for the taxes paid. Ensure that the bank has mentioned the Challan Identification Number (CIN) on the counter foil.
CIN has three parts : 7 digit BSR code of the bank branch where tax is deposited, Date of Deposit of tax and Serial Number of Challan
7. The status of the challan deposited can be viewed on the NSDL-TIN website (www.tin-nsdl.com) under the link “Challan Status Enquiry”.
8. Challan Amount
- Actual challan amount should be mentioned in the TDS Return. This will enable matching the challan details provided by the deductor in the TDS return with the challan details uploaded by banks.
- If TDS for two months (June and July) was paid using one challan, the same challan details should be repeated for both Q1 and Q2. However, it should be ensured that the total TDS deposited for the corresponding deductees given in returns for both quarters should be less than or equal to the challan amount.
Permanent Account Number of Deductee
In case valid PAN of a deductee is not available, the deductor should mention the details as under :
PANAPPLIED - in case deductee does not have a PAN but has applied and provided proof of application of PAN.
PANNOTAVBL - where deductee has not given any PAN or proof of PAN application. This means PAN is not available.
PANINVALID - where deductee has provided PAN but it is structurally invalid. The Deductee PAN field should contain a structurally valid PAN or PANAPPLIED or PANNOTAVBL or PANINVALID only. If any other value is mentioned in this field then the FVU will give an error during validation of the TDS return.
Deductee Type ( Company / Non Company )
Deductee Type should be properly indicated.
Payment by Book Entry or Otherwise
If tax is deducted on the basis of provision made on the last day of the accounting year then the option ‘Paid by Book Entry’ has to be selected.
This is necessary to ascertain the correct due date of payment for such tax deduction.
Rate of TDS & Reason Code for non deduction or lower deduction :
The rate of tds should be correctly mentioned in the e-TDS return. If lower deduction / no deduction is on account of a certificate under section 197, then this should be indicated by writing ‘A’ in the appropriate column. If lower deduction / no deduction is on account of declaration under section 197A, then this should be indicated by writing ‘B’ in the appropriate column.
Validation Of e-TDS Returns
File Validation Utility (FVU) has been developed by NSDL to help deductors ensure that the e-TDS returns prepared by them conform to the prescribed file format. After preparing e-TDS return in accordance with the file formats notified by ITD, a text file is generated with ‘txt’ as filename extension. This *.txt file should be validated using the latest FVU to ascertain whether the return contains any format level error(s). In case the errors are found, these errors should be rectified and the file should be validated once again. This procedure should be repeated till an error free return is prepared. It should be noted that the FVU validates only the format level accuracy of the e-TDS return.
After successful validation of input file, three files are generated: TDS Statement Statistics Report, PAN statistics report and upload file. Eg. In case of valid file for Form 26Q, the FVU will generate three files as follows:
i. Form26Q.html: ‘TDS Return Statistics Report’ This report is a summary of the e-TDS return successfully validated by the FVU. It should be ensured that the control totals along with the TAN, assessment year and other details as reflected in this report match with the actual information.
ii. Form26Q_PAN_Statistics.html: This is a PAN Statistics Report which contain list of deductee PAN deficiencies like invalid PAN, PAN not available and PAN applied. If there are no PAN deficiencies, then this file will not be generated.
iii. Form26Q.fvu: This is an upload file generated with the same file name as the ‘input file’ but with an extension .fvu. This .fvu file should be copied on floppy or CD for the purpose of furnishing the same at TIN FC.
Filing of e-TDS Returns
After preparing and validating the e-TDS returns as abovementioned, the deductor will have to file the same at any TIN-FC managed by NSDL or through an online web based facility provided by NSDL. File *.fvu which is generated after successful validation is the upload file which has to be submitted to TIN FC for filing of e-TDS return. Before filing, it should be ensured that :
i) Each quarterly / annual e-TDS statement / return is in a separate CD/floppy and is accompanied by a duly filled and signed (by an authorised signatory) Form 27A in physical form.
ii) Each return is in one CD/floppy. It should not span across multiple floppies.
iii) Return should be compressed, if required, only by using Winzip 8.1 or ZipItFast 3.0 (or higher version) compression utility to ensure quick and smooth acceptance of the file.
iv) Label mentioning TAN, name of deductor/collector, period to which return pertains (quarter and F.Y.) and Form no. (24Q, 26Q, 27Q or 27EQ) is affixed on each CD/floppy for the purpose of identification.
v) There is no overwriting/striking on Form 27A. If there is any, then the same should be ratified by an authorised signatory.
vi) TAN details (name, address, etc.,) of the deductor as provided in the quarterly e-TDS return should be same as in the TAN database maintained by ITD (these details can be verified on web-site www.incometaxindia.gov.in). If they are different, the deductor will have to submit a TAN change request application to update the ITD TAN database or a copy of the acknowledgment of TAN change request already submitted.
vii) The e-TDS return has been successfully passed through the latest version of the FVU.
viii) Control totals, TAN and name mentioned in the e-TDS return match with those mentioned on Form 27A.
ix) CD/floppy is virus free.
In case any of these requirements are not met, the e-TDS return will not be accepted at TIN- FCs or NSDL website. In that case, Non Acceptance Memo will be issued by the TIN-FC.