TDS – Tax Deducted at Source
TDS stands for Tax Deducted at Source, a method where income tax is automatically deducted from an individual’s payments during certain transactions, such as salary, rent, interest, professional fees, and commissions. Typically, the recipient is obligated to pay the income tax. However, the TDS mechanism allows the tax to be collected upfront from the payments made, ensuring timely tax collection by the government.

The amount received after the TDS deduction is the recipient’s net income, and they must then report the gross amount (before the TDS deduction) in their tax return.

What is TDS return filing?

Apart from depositing the tax, the deductor must file TDS returns. A TDS return is a quarterly report consolidating all transactions involving Tax Deducted at Source within a given quarter. TDS return filing must be completed quarterly to ensure compliance with tax regulations and avoid potential penalties. Once the TDS returns are submitted, the details will appear on Form 26 AS. While filing the TDS returns, the various details to be mentioned are:

• The Permanent Account Number (PAN) of the person making the deduction and the payment recipient.
• Specifics regarding the TDS payments made.
• Details pertaining to the deposit challans.
• This information is also mirrored in Form 26AS for the payment recipient.
• Filing a TDS return is a compulsory procedure for those who are within the specified income tax brackets.
• Those required to file can do so through the official e-filing portal of the Income Tax Department.