TDS or Tax Deducted at Source is a mechanism under which the government of India collects tax from various sources of income. TDS is applicable to a wide range of transactions, including salaries, interest income, commission, rent, professional fees, and more. As per the Income Tax Act, TDS should be deducted at the applicable rate at the time of payment, and the deductor is required to file a TDS return.
A TDS return is a statement that contains details of the tax deducted at source by the deductor and deposited with the government. Every person or entity who has deducted TDS is required to file a TDS return within the specified due date. The return must be filed electronically using the government’s online TDS portal.
The TDS return must contain details such as the PAN of the deductor and the deductee, the amount of TDS deducted, and the payment details. The return must also contain details of any TDS deducted but not deposited, and any errors or discrepancies must be rectified before filing the return.
Filing a TDS return is mandatory for all deductors, and failure to do so can result in penalties and legal action. It is important to file the return accurately and within the specified due date to avoid any penalties or interest.