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Expert TDS Return Filing for Full Compliance
Quarterly returns, challan validation & zero penalties with Lawfinity’s TDS experts.
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Introduction and Its Compliance
TDS (Tax Deducted at Source) is a mechanism introduced by the Income Tax Department under the Income Tax Act, 1961 to collect tax at the source of income. Enterprises (also applies to individuals) which make payments to specified classes of recipients (e.g., salary earners) have to deduct tax at respectively applicable rates and deposit the same with the Government. TDS returns must be filed quarterly and contain details such as TDS deducted, challans paid, PAN of deductees and the nature of payments. Correct and timely filing leads to correct tax credit for deductees and help to avoid penalties for deductor. Lawfinity has designed complete TDS filing solutions right from generating the challan to e-filing with validation and compliance under all the provisions of the Income-Tax Department.
Why It Is Needed
Filing of TDS return is required in order to follow tax laws and also credit the TDS to a payee’s account. It can be considered as proof of payment of tax and creates transparency in the relationship between the payer and the payee, persons/sellers and the income tax department. Failure to file or with incorrect information, can subject individuals to interest, penalties and attention from the law. All deductor, whether corporates or government or other are liable to file TDS return including private and government deductor even if the TDS is NIL. Due to TDS, many have considered it waste of time but let me tell you that accurate and timely TDS return filing will save you from penalties and you will have an impeccable record of compliance.
Benefits and Advantages
- Legal Compliance Assurance Regular filing of TDS returns ensures compliance with income tax laws and prevents notices or scrutiny from tax authorities.
- Avoidance of Penalties Timely and correct return filing prevents interest, late fees and other penalties imposed for non-compliance or incorrect data.
- Ensures PAN-Aadhaar Linking Accurate TDS returns ensure credit reflects in Form 26AS of the deductee, aiding their ITR filing and tax reconciliation.
- Professional Record Maintenance TDS returns contribute to organized financial documentation, which is essential for audits, due diligence and loan approvals.
- Improved Stakeholder Confidence Businesses that comply with TDS norms build trust with employees, vendors and authorities.
Eligibility Criteria
- Any individual, firm, company, LLP, trust or HUF deducting TDS must file returns.
- Mandatory for:
- Employers deducting TDS on salaries.
- Companies making payments like rent, professional fees, interest, etc.
- Banks deducting TDS on FD interest.
- Thresholds and rates vary as per nature of payment.
Documents Required
- TAN and PAN of deductor
- PAN of deductees (employees, vendors, contractors)
- Challan details (Challan Identification Number - CIN)
- Payment details and TDS amount
- Nature of payment (e.g., salary, rent, commission)
- Salary structure or contractor invoices
- Form 16 / 16A (if applicable)
- Digital Signature (optional, for secure e-filing)
- Previous return filing data (if any)
Steps for Filing TDS Returns
- Data Collection: Lawfinity gathers all relevant payment and deduction data.
- TDS Computation: Correct TDS rates and thresholds are applied.
- Preparation of Return File: Details are compiled in Form 24Q, 26Q, 27Q or 27EQ as applicable.
- File Validation: The file is validated using File Validation Utility (FVU).
- Online Filing: TDS return is uploaded on the TRACES or NSDL portal.
- Challan Reconciliation: Challans are linked and cross-verified.
- Acknowledgment Generation: Acknowledgment receipt is downloaded and shared with the client.
- Post-Filing Services: Lawfinity assists in TDS correction returns, Form 16 generation and TRACES compliance.
Penalties
- Late Filing Penalty (Section 234E) ₹200/day until the return is filed (maximum equal to TDS amount).
- Penalty for Non-Filing (Section 271H) ₹10,000 to ₹1,00,000 for non-filing or incorrect filing.
- Interest on Late Payment 1% per month for late deduction 1.5% per month for late deposit
Timelines
Q1
April - June 31st July
Q2
July - September 31st October
Q3
October - December 31st January
Q4
January - March 31st May
Timelines may vary depending on document verification and government approvals.
Fee
Frequently Asked Questions
Because every great business starts with the right answers.
Any individual or organization deducting TDS is required to file quarterly returns.
Form 24Q (Salaries) Form 26Q (Other payments) Form 27Q (Non-residents) Form 27EQ (TCS returns)
Yes, correction returns can be filed for updating PAN, challan details or deduction amounts.
Yes. TAN (Tax Deduction and Collection Account Number) is mandatory for filing TDS returns and is separate from PAN.
It may attract interest, penalties and prosecution under the Income Tax Act.
Yes, Lawfinity can handle centralized TDS filing for multi-location entities.
A late fee of ₹200/day and additional penalties may apply for delayed or non-filing.
Through Form 26AS available on the Income Tax portal or via TRACES.
Lawfinity assists with correction returns, Form 16 issuance, notice responses and compliance audits.
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Shaperz India Grain Private Limited
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