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TDS & TCS Filing in India
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are mechanisms implemented under the Income Tax Act, 1961, to collect tax at the source of income or sale. TDS is deducted by the payer during specific payments like salaries, interest, rent, or professional fees, whereas TCS is collected by the seller at the point of sale for certain goods like scrap, alcohol, or e-commerce transactions. Filing TDS and TCS returns is mandatory to report these transactions to the Income Tax Department, ensuring proper credit to the government and enabling taxpayers to claim tax credits.
Why Filing is Important
1. Legal Compliance: Ensures adherence to the Income Tax Act and prevents penalties.
2. Timely Tax Credit: Enables deductees or buyers to claim tax credits smoothly.
3. Transparency: Maintains a clear record of tax deductions and collections.
4. Avoid Penalties: Prevents fines and interest charges for non-filing or delays.
5. Business Credibility: Enhances trustworthiness by showcasing compliance with tax laws.
Documents Required
TAN applications generally do not require submission of documents. However, the following details must be provided
For Indian Citizens
Features
TAN Applications
Quarterly Compliance
Challan-Based Payments
TDS/TCS Certificates
Penalty Avoidance
TDS & TCS Filing in India
E-Filing Requirement
Wide Applicability
Tax Credit for Deductees
Revisable Returns
Integration with TRACES
Comparison of New Pancard
| Feature | TAN (New) | PAN | GST Registration |
|---|---|---|---|
| Purpose | TDS Filing | TCS Filing | Income Tax Filing |
| Purpose | Tax deducted from payments | Tax collected on sales | Reporting annual income |
| Applicability | Deductors (payers) | Collectors (sellers) | All taxpayers |
| Frequency | Quarterly | Quarterly | Annual |
| Challan Used | TNS-281 | TNS-281 | ITNS-280 or ITNS-281 |
| Returns Filed | Form 24Q, 26Q, 27Q | Form 27EQ | ITR Forms (1-7) |
| Certificate Provided | Form 16/16A | Form 27D | Not applicable |
Frequently Asked Questions
Who is required to file TDS returns?
Any entity deducting TDS, such as employers, businesses, or government agencies.
What happens if TDS is not deposited on time?
Interest of 1.5% per month applies, and penalties may be levied for non-compliance.
What is the penalty for late filing of TDS returns?
A fine of ₹200 per day, subject to the total TDS amount, under Section 234E.
What is the difference between TDS and TCS?
- TDS: Deducted by the payer on specified payments.
- TCS: Collected by the seller on specified goods/services
Can TDS/TCS returns be revised?
Yes, corrections can be made by filing a revised return.
Are TDS returns mandatory for NIL deductions?
Yes, even NIL returns must be filed for TDS compliance.