Here's Everything You Need to Know About TDS Returns

What is TDS?

TDS, an abbreviation for Tax Deducted at Source, is a mode of direct tax in India. Through TDS, the government levies taxes right at the source of payment. It prevents people from indulging in illicit activities to avoid paying taxes. You will easily understand the concept of TDS through an example.

Suppose a payer has to pay money as remuneration for goods or services to a receiver. In this case, the payer must deduct TDS from the total money and pay only the balance amount. And the receiver gets money only after the deduction of TDS. Here the payer who deducts TDS is the Deductor, and the receiver who receives money after TDS deductions is the Deductee. The Deductor will then submit this payment to the government or the income tax department via bank.

One cannot grasp the fact that a country with a population of more than 130 crores has only 5 or 6 crore income tax eligible individuals. Tax evasion is one of the reasons for this low number of taxpayers. The government introduced TDS to tackle the high number of tax evasion in the country. After the inception of the TDS rule, there was a huge rise in the registered number of taxpayers on the e-income tax payment website.

What are the Modes of TDS Deductions?

The tax rates of TDS are according to the eligible existing tax slabs. There is only one major difference between income tax and TDS. The levying of income tax is on the person’s income that is usually paid at the end of the financial year. And TDS deductions occur even before the individual receives the money.

In the case of companies who pay employees annual salaries exceeding the income tax threshold, they automatically deduct TDS. They then submit this TDS amount through E-Payments or Physical Challan payments. In other payments or gains from different sources, if an individual’s total annual income exceeds the threshold, they are eligible for TDS.

But some employers and banks automatically deduct TDS without verifying the income status of the receiver. You can opt for TDS returns if you don’t have a taxable income and get back this deducted TDS.

What is TDS Return?

TDS returns filing is the process of applying to get back extra deductions of TDS. The central government pays the money back for incorrect TDS deductions in TDS returns. Incorrect TDS deductions include wrong deduction amounts or deductions when you are not even eligible for Income tax. You can apply to the bank to prevent such incorrect deductions on payments and interest credits of deposits.

In the case of employers or other sources also you can find similar application forms under the government rules. These forms will prevent all TDS deductions when you are not eligible for taxes.

But if you already are a taxpayer and notice some difference in the final amounts of your TDS deducted and the actual TDS amount according to your calculation, you can raise a claim online. This online claim is along with the Income-tax returns that you file.

How To File TDS Returns?

Filing of TDS returns is mostly through online modes only. You can file TDS returns through the Official Income Tax Portal. You will require an account in the portal for the same. The following are the steps to file TDS returns online.

Step 1: Log in to the Income Tax e-filing portal with your credentials. Your user ID will be your TAN.

Step 2: Select E-File> Income tax form> File income Tax forms. Click on the Form TDS option

Step 3: Select the correct option and upload TDS Form.

Step 4: Submit the form and generate the acknowledgment form.

Step 5: E-Verify the acknowledgment form through digital signature or Aadhaar verification.

E-verification is the final step of ITR and TDS return that completes the process.

How To Check TDS Return Status?

You can check the TDS return status through two different online modes. The first is through the e-income tax filing website, and the second is through the PAN/NSDL website. Given below are the detailed step-by-step procedures of both methods.

Step 1: Log in to https://www.incometax.gov.in/iec/foportal

Step 2: Go to E-file> Income tax return> View filed return

Step 3: Go to E-file> Income tax return> View filed return

Step 4: If the ITR is processed with refund due, Click on the ‘refund status’ link.

Step 5: Click on Submit.

TDS Return Status From PAN/NSDL Website

Step 1: Log in to https://tin.tin.nsdl.com/oltas/refund-status-pan.html

Step 2: Fill in the PAN number.

Step 3: Choose the appropriate Assessment year.

Step 4: Fill in the captcha code.

Step 5: Click on Submit.

By clicking submit on both these pages, you will get the refund status of your TDS returns. There are almost 11 statuses that these websites display, depending on the real-time status of the application. You can even reissue the TDS returns application if the previous application gets rejected due to technicalities.

To Conclude

If you notice any miscalculations or errors in your TDS amount, you must file for TDS returns immediately. Any delay will only increase the chances of application rejection. People often ignore TDS calculations considering that the variation in amounts is negligible. But, paying lesser taxes than what you are eligible for is also a form of tax evasion. And it can also incur interest and legal actions from the income tax department. So, it is always wise to correct these issues from your side rather than waiting to hear from them about the errors.

Now that you know how to file TDS returns and check the status, you won’t have trouble doing so when the need arises. But remember to not have any miscalculations on your side if you are filing TDS returns against incorrect TDS deductions. Always verify your calculation multiple times with advice from tax consultants or legal advisors.