TDS – Tax Deducted at Source

Tax Deducted at Source (TDS) is a mechanism where tax is deducted by the payer (deductor) when making certain specified payments to the payee (deducted). Tax is automatically deducted from an individual’s payments during certain transactions, such as salary, rent, interest, professional fees, and commissions. Typically, the recipient is obligated to pay the income tax, but in TDS returns, payers or deductors are supposed to deposit TDS online. However, the TDS mechanism allows the tax to be collected upfront from the payments made, ensuring timely tax collection by the government.

The amount received after the TDS deduction is the recipient’s net income, and they must then report the gross amount (before the TDS deduction) in their tax return. After the deposit, one must do the TDS filing online, which is a part of TDS rules and regulations.

Who should deduct TDS?

Individuals, HUFs, firms, companies, and other entities required to deduct TDS under the Income Tax Act, 1961 (depending on turnover and specific conditions). Those must complete the TDS apply process and register as a TDS deductor.

Deposit of TDS

The deposit of TDS refers to the process of remitting the deducted TDS to the government within the prescribed TDS due date. Concerned persons who have done the TDS apply and registration must ensure timely deposits to comply with tax regulations and avoid penalties. After the deposit, one should engage and complete TDS filing online to avoid penalties and legal complications. 

TDS Due Date

Usually by the 7th of the subsequent month.

For TDS deducted in March: by April 30 (in many cases) or by March 31 (for some government deductors).

Common Payments Attracting TDS

Salaries, rent, contractor/sub-contractor fees, professional fees, commission, interest (other than interest on securities), etc.

Who is Required to File a TDS Return?

TDS filing obligations extend to employers and organizations that possess a TAN (Tax Deduction and Collection Account Number). This requirement also applies to individuals subject to audit under Section 44AB, and those in government or corporate positions who are expected to do the TDS quarterly return filing. The TDS return quarterly due date must be met in order to avoid penalties and legal complications.

A wide array of entities, including individuals, collectives, Hindu Undivided Families (HUFs), corporations, local authorities, partnerships, and other associations, are eligible as deductors, deposit TDS online and does TDS quarterly return filing. It must be filed with the right forms before the TDS return filing due date to avoid legal problems.

Under the provisions of the Income Tax Act, TDS paid online, and the TDS returns must be filed for transactions before the prescribed TDS due date involving:

• Salary Payment
• Income on securities
• Income by winning the lotteries, puzzles, and others
• Income from winning horseraces
• Insurance commissions
• Payment concerning the National saving scheme and many others

TDS Return Filing Due Date

The TDS return due date is crucial for ensuring compliance with tax obligations. For each financial quarter, the TDS return quarterly due dates are as follows:

To fulfil TDS payment obligations effectively, it’s important to adhere to this TDS return quarterly due date and ensure the timely filing of TDS returns.