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FAQs about Generating TDS Returns and Form 16s for Chartered Accountants, by Chartered Accountants

Tax Deducted at Source or TDS is a method of tax collection of the government, also called pay as your earn or Withholding Tax. Persons who make payment of income are responsible to deduct tax at source and deposit this tax to the government within the time stipulated. The recipient of the income gets the net amount after deduction of TDS. The recipient of income is taxed on the gross income and amount deducted at source is allowed to be adjusted against the final tax liability.

In simple terms, gross income refers to your CTC and includes your basic pay, HRA, transport and other allowances. Net income refers to your in-hand salary.

Check out the rates of TDS here.

Every deductor is required to submit a quarterly statement of details of tax deducted at source in the forms prescribed by the government. This quarterly statement is called a TDS Return. TDS Returns include details of PAN of all deductors and deductees, particulars of tax paid to the government, TDS challan information and other particulars as required in the forms.

There are 4 different types of TDS forms and they are to be used for different purposes.

Form Details
24Q To be used for TDS from salaries
26Q To be used for TDS on all payments other than salaries
27Q To be used for TDS from interest, dividend or any other sum payable to non-residents
27EQ To be used for collection of tax at source
Quarter Period TDS Return Due Date
Q1 1st April to 30th June 31st July
Q2 1st July to 30th September 31st October
Q3 1st October to 31th December 31st January
Q4 1st January to 31th March 31st May

When you submit Form 24Q for the first three quarters, you only have to submit Annexure I which include deductor details, challan details and deductee details. However, for the final quarter you also have to submit Annexure II which includes the complete salary details of the employees for the entire financial year.

Annexure II is to be submitted so that you receive Part A of Form 16, which you are required to submit signed to your employees.

It is the responsibility of the deductor to deposit the money in the designated banks before 7th of the following month using Challan 281. You can make an online payment for the challan.

Deductors at government offices must transfer the tax deducted through book entry in government account on the same day.

In the following cases your quarterly returns must be submitted online:

  • Deductor is an office of the government
  • Deductor is the principal officer of the company
  • Deductor is a person who is required to get his accounts audited under section 44AB in the immediately preceding financial year
  • When the number of deductee’s records in a statement for any quarter of the financial year are 20 or more.

With effect from 19th February, 2013, electronic return can be uploaded either with (a) digital signature (b) furnishing return electronically with statement in Form 27A or (c) furnishing return electronically with electronic Form 27A. On ClearTDS you can submit all the Forms for your quarterly returns.

Read our guide to learn about how to create TDS return and download your FVU file using the free TaxCloud software - ClearTDS.

After you have generated your FVU file on TaxCloud, you will be able to download a zip file from our website. The zip file will contain your .fvu file and a Form 27A pdf. Keep a copy of the .fvu file on a pen-drive and print and sign the Form 27A. Then physically furnish these at your nearest TIN Facilitation Center (TIN-FC).

Click here to find your nearest TIN-FC.

According to Section 194-IA, if you are buying immovable property (other than agricultural land) worth more than Rs 50lakh, you have to pay TDS. To learn more, read our guide here.

Know more about TaxCloud's TDS software - ClearTDS

No downloads or installation of software are necessary if you want to file your TDS returns on ClearTDS. The process is completely cloud-based and online.

You just need to register for an account, and you can start using the software right away.

There is no limit on the amount of deductors you can add using our software.

TaxCloud can import your .tds files (consolidated files) for you.

  • You can import a .tds file when you create the deductor, this will allow you to pre-fill all deductor information and import all deductees present in the file
  • From the "Master List of Deductees" page, you can upload additional .tds files to import new deductees
  • You can also import your .tds file for preparing a correction statement. Read our guide on to import your Consolidated file from TRACES here.

TaxCloud's ClearTDS currently supports filing of Form 24Q (Salary), 26Q (Non-Salary) and 27EQ (TCS).

Yes, if any invalid data is present in your TDS return, TaxCloud will redirect you to a page which will show you the errors in your data. After making the necessary corrections you can click on the Validate this TDS Return button to make sure all your data is valid.

Absolutely! With bank grade network security (256-bit SSL), security audits and the best practices in industry-wide security, we keep your data safe. We take your privacy seriously and do not use or share your data with anyone. Know more here.

Know more about TDS Correction Statements

Yes, on TRACES you can make 2 types of corrections to your eTDS return - PAN corrections and Challan corrections. For other types of corrections you have to go through the regular process of generating correction return files and you have to submit them with the TIN-FC.

Deductors must furnish a correction statement if the original return filed is found to be incomplete or inaccurate with regard to TAN, challan details or PAN of the deductee(s).

Deductors are required to submit one TDS statement in one single form for a particular TAN every quarter. If there are any additions or updates to be made to the TDS returns, then the deductor must submit a correction statement.

Remember, tax credit will not reflect in the Form 26AS of the deductees in case of errors with the actual returns. Deductors are required to fix the error and file the correction statement.

The status of the original returns filed can be checked online three days after you have submitted here. Enter your TAN and provisional receipt no.

You must file a correction statement if:

  • the amount mentioned in the statement and amount received by the I-T Department do not match
  • the TAN mentioned in the challan and statement do not match
  • Both TAN and amount are a mismatch
  • CIN (Challan Identification Number) mentioned in the statement is not found in the bank data

Contact the bank and/or your assessing officer if you can't find any errors with the statement you filed.

You do not need to worry about the type of correction if you prepare your correction statement using ClearTDS. We will autoamatically detect the changes you have made and select the appropriate mode(s). You just have import the consolidated file into ClearTDS, and make the changes you need to make — we will take care of the rest.

The modes that are available are:

  • C1 - Changes to details such as name, address
  • C2 - Changes to challan such as challan serial no., BSR code, challan amount
  • C3 - Update/delete/add deductee details
  • C4 - Add/delete salary detail records
  • C5 - Update the PAN of the deductee in deductee/salary detail records
  • C9 - Add a new challan and underlying deductees

Y-type of correction (updating the deductor's TAN number) has been discontinued from July 2013.

The TIN-Facilitation Centre issues a provisional receipt if the corrected TDS return file is valid and accepted. This receipt is proof that you filed a corrected TDS return.

If your eTDS or eTCS return file is complete, you are issued a provisional receipt by TIN-FC. This is considered as proof that your eTDS or eTCS return has actually been filed by you. Each provisional receipt is issued along with a unique 15-digit provisional receipt number (PRN).

Make sure to keep your PRN in a safe place since you need it for filing TDS returns in future quarters, for downloading and accessing your conso file, for making corrections to and accessing your TDS returns. If you use ClearTDS, you can save your PRN on our software so that you never lose it again.

You can read our guide to Storing the Provisional Receipt Number on ClearTDS here.

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