Tax filing of any sort is usually a cumbersome process and prone to inevitable errors. The errors can be human errors, computational errors or informational errors. The more the data, the more the chances of errors.
When filing for TDS returns, companies and employers need to deal with plethora of input, which can lead to multiple errors.
No matter how well you prepare the TDS returns, there will invariably be some corrections or the other. For example, the name or address of the employee would require some changes or you would need to update PAN (Permanent Account Numbers) of the employees. These corrections are vital, because if they are not fixed, the correct credit of TDS will not happen. The corrections need to be made systematically using correction statements.
In this article we will take you through the details of TDS returns, how to make corrections to TDS returns and file revised TDS returns.
What is TDS returns?
TDS is tax deducted at source and a method of tax collection of the government, wherein the employer or other deductos withhold the tax amount from the employee’s income and pay it to the government in advance. Every deductor is required to submit quarterly statement details of the tax deducted at source and this quarterly statement is called TDS returns.
It includes all the information of the PAN numbers, particulars of the tax collected and paid to the government along with the TDS challan or receipt numbers. The following are the 4 different TDS forms used for this purpose:
Type of Form
TDS details from salaries
TDS details of payments other than salaries
TDS details from interest, dividends and other related amounts
Statement of Tax Collected at Source
Who has to File TDS returns?
It is mandatory for the following types of assesses to file for TDS returns electronically
- All corporate companies, deductors and collectors
- All government deductors and collectors
- People whose accounts are audited under income tax act of 1961
- No of deductees recorded in the quarterly statement is greater than or equal to 20
- Any other taxpayers who has TDS deducted are liable to file TDS returns
How to File TDS Returns Online?
File your e-TDS online at the website of the income tax department. Register with the NSDL in prior and file the e-TDS as per the stipulated formats prescribed, depending on the type of payments. Seek professional assistance to help you with the different forms and rules and regulations.
- File quarterly returns using Form 24Q, 26Q,27Q, 27EQ
- File annual returns of e-TDS using Form 24, 26, 27
- File annual returns of e-TCS using Form 27E
Filing TDS returns online and Validation of TDS returns file
Step 1: Download the right forms from the TDS portal online.
Step 2: Fill the file with respective details
Step 3: Once the file is complete, upload it in the portal validation utility tool to check for errors. This tool is free and provided by the NSDL in order to facilitate error-free TDS returns
Step 4: The file validation utility (FVU) will be created with the statistics report detail the correction required. There will be a report for each type of correction
Step 5: Make the required changes and verify the file again using FVU
Step 6: Form 27A will be created in PDF format by the tool
Step 7: Copy the FVU file on a computer media like CD or pen drive and submit the same along with print outs of all forms to the TIN-FC centre
Step 8: Submit your e-TDS returns online and upon successful processing receive provisional receipt number
Important Things to Note When Filing TDS returns:
For successful acceptance of TDS returns, make sure to follow the guidelines. Here are some basic things that needs to be considered:
- The control totals of the amount paid and collected as TDS has to be mentioned clearly. It has to be the same in all the respective forms including Form 27A, Form 24, Form 26 and Form 27
- Ensure to mention the accurate Tax account number or TAN in all forms. The TAN number along with name and address of deductor or employer should be mentioned clearly on each challan separately
- Separate challans are to be used to deduct TDS accross different sections of employees
- The control chart in form 27A should be filled completely and verified. The details also need to submitted as hard copy in the form of computer media according to the standards prescribed by the income tax department
- Label the hard copy with the TAN number, name of deductor or employer, period to which it belongs to and form number. Hard copies can be in the form of CD, floppy drive, pen drive.
- There should not be over-writing of any sort and if there is, it should be rectified with a authorised signatory
- Follow the basic structure and guidelines as mandated by the government in all e-TDS returns forms
- It is important to mention the Bank Branch Code or the BSR code that is generated by the Reserve Bank of India in the details of the challan and deductee details as well. The BSR code should not be incorrect or left blank, else transfer of tax will not happen.
- The e-TDS needs to be filled in ASCII clean text format. You can use the RPU, other ERP softwares, CompuTax, Tally or MS Excel. It is important to maintain the file format as specified by the government
- Upon submission of e-TDS returns, the TIN-FC will issue a provisional receipt number which will stand as a proof of e-returns
- If the returns are complete in any respect, it would be rejected and you would be provided with a non-acceptance memo along with the reason for rejection
Prerequisites for Revised TDS Returns
TDS revised returns can only be filed upon submission and acceptance of the original return by the TIN central system. You can check the status of your returns at the website using your TAN number and provisional receipt number. You can make simple changes to do you TDS form online. You can make the following corrections online
- PAN corrections
- Challan corrections
For other types of corrections and multiple batch corrections, you would have to go through the usual process of producing modification return files and submit them with the TIN-FC.
There are several software products available in the market that can be used to prepare and file revised TDS returns. Alternatively a free software developed by NSDL, called RPU (Return Preparation Utility), is available on the income tax department’s website.
When to File Corrections to the TDS returns?
The status of the filed returns can be checked online, 3 days after submission. Enter you TAN and provisional receipt number for the same. The following are some scenarios where mistakes can happen and need to corrected accordingly:
- If the amount mentioned in the statement and the amount collected by the income tax department don’t match, then you need to file revised TDS returns
- Incorrect TAN number specified in the challan and statement
- Challan Identification Number (CIN) incorrect and does not match records of the bank data
- Incorrect PAN numbers and personal details of the employee or employer
Types of Corrections in TDS Returns
Type of Correction
Update deductor or employer’s personal details like Name, Address, etc.
Revise challan details like challan serial number, BSR code, challan tender date, challan amount
Update, delete or add deductee or employee details
Add or delete salary detail records
Revise the PAN number of the deductee or employee in salary details
Add a new challan and subsequently other deductees
C1 – If you have revisions in details of deductor, modify accordingly and update the details
C2 – Make changes to challan details. Please note than challan cannot be deleted and only rectified with changes like revisions in BSR code, challan amount, etc. Update challan details and add new challan to the online system.
C3 – All details of the deductees or employees can be made here including PAN number, date of deduction, TDS rates, TDS amounts, etc.
C4 – Make revisions to salary details of each deductees
C5- Changes can be made to the deductee’s PAN number only. If you have to just change that particular detail, this category of correction will suffice. If other changes to personal details of the deductee are also required, then you would have to opt for C3
C9- You can add a new challan here and input its corresponding details.
Filing for TDS returns is an important process that needs to be completed and submitted for each quarter in a fiscal year. If you realize that you need make changes to your TDS returns after submission, the above guidelines will come to you aid and help you file revised TDS returns. Ensure that you clearly validate your TDS returns before submission using the several utility tools and go hassle-free.
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