TDS Return Filing

Tax Deducted at Source or TDS

Tax Deducted at Source or TDS is a type of advance tax which is deducted from the earnings of an individual or an organization before the money is actually credited into that entity's account, according to the Indian Taxation Code. The government is able to generate revenues by implementing the provisions of TDS on the earnings of individuals as well as businesses. Rules and regulations regarding TDS are controlled and governed under the Income Tax Act, 1961 by the Central Board of Direct Taxes (CBDT).

As the name suggests, "Tax Deducted at Source" implies that the payee or the employer deducts the tax before making a payment to the receiver. Tax Deducted at Source is applicable on income earned regularly and also on the income earned occasionally or irregularly. Thus, TDS is applicable on various incomes, including, but not limited to Salary, Commission, Rent, Professional Fees and Interest.

Advantages of payment of TDS

TDS is payable on the earnings so it is important to note that the liability to pay TDS is applicable only in the event of earnings actually taking place. TDS is deducted before making payments. Deductions are to be made on payments that are made in cash, cheque or credit. The amount deducted under TDS is further deposited with various government agencies. Payment of TDS has various advantages which are as follows :

• Deducting TDS at source prevents tax evasion.
• Tax collection is done duly and in a timely manner.
• A large number of people come under the tax net.
• Collection of TDS is a steady source of revenue for the government.

TDS Return Forms: An Overview

As the deductor is liable to deduct tax and file the TDS Return form as the supporting document, it is important to note that there are various types of TDS Return Forms for different situations. The type of TDS Return Form to be submitted is based on the Nature of Income of the deductee or the type of deductee who pays the TDS.

Type of TDS Return Forms	Particulars of the TDS Return Forms
Form 24Q	Statement for tax deducted at source from salaries
Form 26Q	Statement for tax deducted at source on all payments other than salaries.
Form 27Q	Statement for tax deduction on income received from interest, dividends, or any other sum payable to non residents.
Form 27EQ	Statement of collection of tax at source.