What is TDS Return filing?
A person who is liable to deduct tax at source has to file the TDS return as part of compliance. A TDS return is submitted by Tax Deductor in respect of every quarter with the Income Tax Department. The return is a statement that entails the details of the tax collected, source of collection and tax paid to Government for the reporting period.
Generally, tax is deducted on transactions such as Salaries, payment to professionals and contractual basis, payment of rents exceeding certain amount, etc. For every such type of transaction and payment, there is prescribed rate of interest. The deductee can claim the benefit of the tax deducted while ITR filing, only if the deductor has filed the TDS return on time.
Types of TDS Forms
There are basically three main types of TDS forms like;
- Form 24Q, which is for the statement for tax deduction at source from salary.
- Form 26Q, which is for the statement for tax deduction sourced from everywhere except for the salary.
- Form 27Q, this form is basically for the statement for the tax deduction of the source from other means of earning like interests from savings or fixed deposits, dividend funds or any other sum payable.
Benefits of TDS Return
As per the IT Act of 1961 filing TDS return is mandatory as well as it fetches some benefits to person or company. A few advantages of submitting TDS return are:
- A steady inflow of income to the government.
- Facilitates a smooth collection of taxes used for welfare.
- No burden of paying a tax lump sum as the payment is done every three months for the whole year.
Documents Required to File TDS Return
The following documents have to be submitted for filing the TDS returns are:
- TAN and PAN Details.
- If you have last TDS filing Details then it’s also required.
- Time for which TDS has to be filed.
- Date of the incorporation of the business.
- For filing the TDS Return no. of transactions are required.
- Different Entities like Proprietorship, Partnership, Company, and LLP.