TDS or Tax Deducted at Source is an advanced tax deduction system specially designed and presented by the Income Tax Department of India. The methodology behind this system is to deduct a certain percentage of tax at the source of payment. The deduction varies between 1% to 10% depending on the individual's monthly income.
Purpose of Form 24Q
When paying an employee(deductee) his/her monthly allowance, the firm(deductor) deducts TDS under Section 192. The firm would need to submit Form 24Q every quarter of the financial year to indicate TDS for salary. Form 24Q indicates the total remuneration paid to the deductee and the TDS deducted on the employee's salary. No firm must refrain from abiding by the norms to file Form 24Q when required.
Who can deduct TDS on salaries?
Every employer is required to deduct TDS on salaries , if they exceed basic exemption limit. Employer can be an Individual, HUF, firm or a company.The employer should file TDS return on deduction of tax on salaries under Form 24Q quarterly.
Format for Form 24Q
According to the prescribed formats, an e-TDS/e-TCS return should be prepared in an ASCII format. The file extension should be '.txt'. One can get his/her e-TDS/e-TCS return prepared with the help of any software or the NSDL e-TDS Return Preparation Utility. If you want to take a look at the Income-tax department-approved format, click on - tin-nsdl.com/downloads/e-tds/download/24Q_01042015.pdf.
Once you have created the file according to the approved format, you need to validate it. Form 24Q can be validated with the File Validation Utility (FVU), an NSDL e-Gov /platform. In case the file that you have prepared has any mistakes, the File Validation Utility (FVU) will provide the report with those mistakes. It will enable you to correct those mistakes and re-verify with the help of the FVU. You must furnish the error-free generated file and validate it using the File Validation Utility (FVU) to the TIN-FC.
