TDS Return

TDS (Tax Deducted at Source) is an indirect system of deduction of tax according to the Income Tax Act, 1961 at the point of generation of income. The payer deducts the tax and remits it to the government on behalf of the payee.

A TDS Return is a quarterly statement that a deductor must submit to the Income Tax Department of India. Submitting TDS Return is mandatory if you are a deductor. It has details of TDS deducted and deposited by you.

Who is Required to file TDS Return?

The person making payment to someone for specified goods or services has a duty to deduct TDS and file a TDS return. The specified payment includes salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. The person who deducts TDS is called deductor and the person whose tax is being deducted is called deductee.
Individuals and HUF do not need to deduct TDS, except those whose accounts require an audit under section 44AB i.e. whose gross receipts in preceding financial year in case of business is more than 2 crore (AY 2017-2018) or 1 crore ( AY 2016-2017) and in case of profession 50 lakhs ( AY 2017-2018) or 25 lakhs (AY 2016-2017).

What is TAN and Is It Required to File TDS Return?

A person liable to deduct TDS and file a TDS return requires TAN, an alphanumeric 10-digit number. Thus such person must make an application within a month of deducting TDS for allotment of Tax Deduction and Collection Number (TAN) in Form 49B. The deductor must mention this allotted number in all TDS certificates issued, returns, challans, etc. If a person fails to apply for TAN, the department may penalize them up to Rs. 10,000.