TDS/TCS Return – Online Filing

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Steps for filing TDS/ TCS Return online:

Step – I

The data structure (file format) in which the e-TDS / e-TCS return is to be prepared has been notified in https://www.tin-nsdl.com/services/etds-etcs/etds-rpu.html

Step – II

e-TDS/e-TCS return in accordance with the file formats is to be prepared in clean text ASCII format with ‘txt’ as filename extension. e-TDS/e-TCS return can be prepared using Return Preparation Utility provided by NSDL or any other third party software

Step – III

Once the file has been prepared as per the file format, it should be verified using the File Validation Utility (FVU) provided by NSDL

Step – IV

In case the file has any errors the FVU will give a report of the errors. Rectify the errors and verify the file again through the FVU.

Step – V

Generated .fvu file can be submitted at TIN-FC or uploaded at http://incometaxindiaefiling.gov.in/ website. The link below takes you to a user manual which  guides you to Upload the return.

Click here to view TDS Return Upload/View – User Manual.

For Online upload of TDS/TCS Return, registration of organisation at http://incometaxindiaefiling.gov.in/ is mandatory

Click here​ to Online File the TDS/TCS Return

 

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Dos & Don’ts for TDS Returns

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Given below are some dos and don’ts for the filing of TDS returns:

Dos

  1. Ensure that TDS return is filed with the same TAN against which TDS payment has been made.
  2. Ensure that correct challan particulars including CIN and amount is mentioned.
  3. Correct PAN of the deductee is mentioned.
  4. Correct section is quoted against each deductee record.
  5. Tax is deducted at the correct rate for each deductee record.
  6. File correction statement as soon as the discrepancy is noticed.
  7. Issue TDS certificate downloaded from TRACES website.

Don’ts

  1. Don’t file late returns as it affects deductee tax credit.
  2. Don’t quote incorrect TAN/PAN or use PAN in place of TAN or vice versa.
  3. Don’t enter incorrect challan.
  4. Don’t make mistake while mentioning Assessment Year in the challan.
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Section 194C – TDS on Transporter

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Section 194C of the Income Tax Act, 1961 states that any payment to a transporter is subject to a Tax Deduction at Source (TDS) at the rate of:

–1% in case if the payee is an Individual or a Hindu Undivided Family (HUF), and
–2% in case of other payees (i.e. partnership firm, company, trust, body of individuals or association of persons)

TDS on transporter during the course of plying, hiring and leasing goods carriage

Previously, payment to transporters carrying on the business of plying, hiring, or, leasing of goods carriages was not liable to withholding tax if the transporter furnishes her/his permanent account number (PAN) to the payer.

It seems that the intention of having this provision was to exclude small transporters from the rigors of TDS provisions. But because of the way the section was drafted transporters were excluded from the TDS provisions if they had a PAN.

With a view to bring back the big transporters back into the TDS fold, from 1st June 2015 onward, Department made an exemption. This exemption would be available only to those transporters who own ten or less goods carriages at any time during the previous year. Such a transporter would also need to furnish a declaration to that effect to the payer along with the PAN.

There was also some bit of confusion in the minds of a few people as to whether the said section (and exclusion) applied to payers engaged in the business of transport or to payees engaged in the business of transport. To remove this confusion, it has now been clarified in the Memorandum to the Finance Bill that this exemption is available whether such amount is paid by a person engaged in the business of transport or otherwise.

With this addition to the Act, reporting all deductions w.r.t Nil TDS on transporter payment in quarterly return (26Q) is made compulsory.

Following are the documents which a Deductor is supposed to collect for such transactions:
– Self-attested copy of PAN Card
– Declaration of neither the contractor is registered nor is he the owner of more than 10 goods carriages.

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Healthy Practices for Error-Free TDS Returns

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Healthy practices for error-free TDS returns has been given below: 

  1. Deduction/ Collection of Tax at Correct Rates.
  2. Timely Deposit of Tax Deducted at Source.
  3. Accurate Reporting of data related to tax deductions/ collections made.
  4. Submission of TDS Statements within the due dates.
  5. Verification and Issuance of TDS Certificates within time.
  6. CPC (TDS) is now sending Intermediate Default Communication for PAN Errors and Short Payments, which can be corrected during the interim period of a week of filing TDS Statements before CPC (TDS) proceeds with computing Defaults for the relevant statement.
  7. User-friendly Online Correction facility can be used for Correction of Deductees, Tagging Unmatched Challans and Payment of Fees/ Interest. (Please navigate to Defaults tab to locate Request for Correction from the drop-down menu. For any assistance, please refer to the e-tutorial available on TRACES).
  8. Aggregated TDS Compliance Report assists the PAN of the Deductor to administer TDS Defaults for associated TANs and to take appropriate action.
  9. The Deductor’s Dashboard provides you with all necessary information to assist you in Compliance Self-Assessment and to take appropriate action.
  10. Non-filing Self-declaration can be made by navigating to Statements / Payments menu and submit details under Declaration for Non-Filing of Statements.
  11. PAN Verification and Consolidated TAN – PAN File facility on TRACES can be used for verifying the deductees.
  12. The Conso Files and Justification Reports downloaded from TRACES help you to identify errors in submission of revised Quarterly TDS Statements.
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