FAQs related to TDS

1What is Tax Deducted at Source (TDS)?
Tax Deducted at Source or TDS is a percentage of the amount that is deducted by a person at the while making or crediting certain payment of a specific nature to the other person. This deducted amount is then remitted to the Government Account.
2Due dates for filing TDS/TCS for all forms
Form 24Q, Form 26Q, Form 27Q, Form 27EQ
Quarter Period TDS for Government/Non-Government Deductors TCS
Q1 1 Apr - 30 June 31st July 15th July
Q2 1 July - 30 Sept 31st Oct 15th Oct
Q3 1 Oct - 31 Dec 31st Jan 15th Jan
Q4 1 Jan - 31 Mar 15th May 15th May
3What is the penalty for delay or non-filing of TDS?

Delay in filing TDS:

As per section 234E w.e.f. July 1, 2012, if a person fails to submit TDS return on the due date, then a penalty of Rs. 200/- per day is charged till the default continues. However, the amount should not exceed the total tax amount.

Non-filing of TDS/Furnishing incorrect info:

Penalty is also levied in case of non-filing or if some incorrect information has been furnished. The amount should not be less than Rs. 10,000/- and not more than Rs. 1,00,000/- u/s 271H of the IT Act, 1961.

4Forgot your password?
  • Password for Form 16/16A, transaction based report and Form 27D zip files is TAN of deductor.
  • Password for conso file is 'TAN_' (eg. ABCD12345E_67890). Request number should be of one of the requests submitted.
  • Password to unzip Justification Report is 'JR__
    __', eg. JR_AAAAA1235A_24Q_Q3_2010-11.
5How to convert Justification Report into excel file?
  • Download the zip file from 'Requested Downloads' screen and save it in your system.
  • Unzip the file using Winzip. Password to unzip is 'JR____', eg. JR_AAAAA1235A_24Q_Q3_2010-11. This will save the justification report as an excel file.
  • Download the macro utility for Justification Report from the screen.
  • Double-click on utility, excel sheet will open.
  • Click on enable content in the warning message to enable macros.
  • Select the Justification Report text file and the folder to save the output excel file and click on the button ‘Generate TDS CPC Justification Report’.
  • The text file will be converted into excel spreadsheet and saved in the selected folder.
  • Open the Justification Report excel file from the concerned folder.
6As per Fourth Character, identify the right status by collecting the PAN (Permanent Account Number) for Assessee
7What is TRACES?
TDS Reconciliation Analysis and Correction Enabling System helps the deductors and the deductees by efficient and effective administration of the taxation system. It aims at improving the end-user satisfaction by providing timely and appropriate web services.
8Who is a Resident?
Resident is a person who stays in India for 182 days or more in a year regardless of his citizenship. But, if the stay is less than 182 days, he /she is a non-resident.
9Is Income Tax applicable to residents?
Income Tax is applicable to every person who earns an income in India irrespective of being a resident or a non-resident.
10If a person purchases a property from another person residing abroad, should tax be deducted while making the payment?
Yes, tax should be deducted u/s 195. In case of some ambiguity regarding the amount on which tax is to be deducted, you may file an application with the officer handling non-resident taxation who will then pass an order determining the tax to be deducted. If the recipient feels that the TDS is more he may file an application with his Assessing Officer for non-deduction.
11How can one determine if a company is resident or non-resident?
A resident company is incorporated under the Indian Companies Act. Also, a foreign company can become a ‘resident’ if the control and management of its affairs is done entirely in India during the previous year.
12Can Permanent Account Number (PAN) be used to pay the tax deducted into Government account?
No, the PAN cannot be used as a separate Tax Deduction Account Number (TAN) is required through an application in Form 49B with the TIN facilitation center of NSDL.
13A person’s income is below the taxable limit and has a deposit with a bank which attracts an interest of 15,000 INR. What should be done in case the banker wants to deduct tax?
In this case, a self-declaration should be made to the banker in Form 15H stating that your income is below the taxable limit. This form is available with the bank, the local Income Tax office and can also be downloaded from the Government website www.incometaxindia.gov.in. This form should be filed before the interest begins to accrue in the fixed deposit account as the declaration has no retrospective effect.
14If the employee does not pay tax nor does the employer deduct tax, who will be held responsible for the tax payment?
The onus to pay taxes rests on the person who has earned income. If the employee deposits such tax then the employer will be liable for interest and penalty for failure to deduct tax.
15I have let out a property for Rs. 30,000 per month. The tax being deducted is more than my tax liability. What should I do under this circumstance?
If you compute your tax liability and find it to be lower than the tax being deducted, you may approach your Assessing Officer by filing Form 13. He will then issue a certificate directing the tenant to make TDS at a lesser rate. This form is available with the local Income Tax office or can be downloaded from the website www.incometaxindia.gov.in
16I have deducted tax from payments disbursed but have used the same to meet some urgent financial needs. What can be the consequences
It is an offence to misuse Tax Deducted at Source. It should be remitted to government account within the specified time frame. If a person fails to deposit TDS, it attracts levy, interest, penalty and also an imprisonment up to seven years.

FAQs related to GST

1What are the various types of Returns under Goods and Services Tax?
1. GSTR-1 GSTR-1 is a monthly return of sales or outward supplies.
Who is supposed to file GSTR-1?
Every business that is registered under Goods and Services Tax must file GSTR-1. By filing this return, every tax payer makes a declaration of all the sales transactions made by him in the given period.

2. GSTR-1A
It is an amendment form used to correct the GSTR-1 for any mismatches between the GSTR-1 of a taxpayer and the GSTR-2 of his customers. This can be filed between 15th and 17th of the following month. 

3. GSTR-2
GSTR-2 is a monthly return of purchases or inward supplies.
Who is supposed to file GSTR-2? Every registered person must file GSTR-2 except for the following:
  • Input Service Distributor
  • Non-residential taxable person
  • Person required to deduct the TDS or e-commerce operator system

4. GSTR-2A GSTR-2A includes mismatches in GSTR-1 and GSTR-2. It is not used for filing purpose as it involves reconciliation of mismatches.
The reasons for a mismatch can be:
  • Wrong GSTIN of the user or the counter-party
  • Wrong invoice date or invoice no.
  • Wrong tax value

5. GSTR-3 GSTR-3 is a monthly GST return that is divided into the following parts:
  1. Part-A
It contains the information that is furnished through returns in forms GSTR-1 and GSTR-2, based on other liabilities of previous tax periods. Part-A is generated electronically.
  1. Part-B
It contains the tax liability, interest, penalty, and refund claimed from cash ledger. Also, it is auto-populated. The tax liability is calculated based on GSTR-1 and after making adjustments for Input Tax Credit claimed in GSTR-2. Who is supposed to file GSTR-3?
Every registered person must file GSTR-3 except for the following:
  • Input Service Distributor
  • Non-residential taxable person
  • Person required to deduct the TDS or e-commerce operator system

6. GSTR-9
An annual consolidated tax return that includes a summary of taxpayer’s income & expenditure in detail.

7. GSTR-4 It is a quarterly return for those who have registered themselves under the GST Composition Scheme. The entities which have a turnover less than 75,000 INR are eligible for this scheme. Under the composition scheme, the tax payer is required to file one return every quarter instead of three returns every month.

8. GSTR-4A
Quarterly purchase-related tax return for composition dealers. It’s automatically generated by the GSTN portal based on the information furnished in the GSTR-1, GSTR-5, and GSTR-7 of your suppliers.

9. GSTR-9A
GSTR-9A is a consolidated annual return for compounding business entities. It includes all the quarterly returns filed in that financial year.

10. GSTR-5
A variable return for Non-Resident foreign taxpayers. It contains the details of the taxpayer, period of return and invoice details of all goods and services sold and purchased by the tax payer in India for the registered period.

11. GSTR-6
It is a monthly return for Input Service Distributors (ISD). This return contains the details of the taxpayer, period of the return, supply details from the GSTR-1 of counter-parties, invoice details, separate ISD ledger containing the opening ITC balance for the period, credit for ITC services received, debit for ITC reversed or distributed, and closing balance.

12. GSTR-7
GSTR-7 is a monthly return for TDS transactions. It contains the basic information of the taxpayer, period of the return, supplier’s GSTIN, invoices against which the tax has been deducted (SGST, CGST, and IGST), and details of any other payment such as interests and penalties.

13.  GSTR-8
A monthly return for e-commerce operators. It contains the basic information of the taxpayer, the period of the return, details of supplies made to customers through the e-commerce portal by both registered taxable persons and unregistered persons, customers’ basic information, the amount of TCS, tax payable, and tax paid.

 14. GSTR-10
The final GST return for the cancellation of GST registration. This return is to be filed in case of termination of business activities permanently/cancellation of GST registration. It contains the details of all supplies, liabilities, tax collected, tax payable, etc.

15. GSTR-11
Variable tax return for taxpayers with UIN. GSTR-11 contains the details of purchases made by foreign embassies and diplomatic missions for self-consumption during a particular month.

16. GSTR-3A This is the tax notice issued by the tax authority to a defaulter who fails to file monthly GST returns on time.
2What are the due dates for filing GST returns?
Type of Return Details Time Period Due Date
GSTR-1 Details of outward supplies of taxable goods and/or services Monthly 10th of the next month
GSTR-2 Details of inward supplies of taxable goods and/or services claiming input tax credit. Monthly 15th of the next month
GSTR-3 Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of the amount of tax. Monthly 20th of the next month
GSTR-4 Return for compounding taxable person only Quarterly 18th of the month succeeding quarter
GSTR-5 Return for Non-Resident foreign taxable person Monthly 20th of the next month
GSTR-6 Return for Input Service Distributor (ISD) Monthly 13th of the next month
GSTR-7 Return for authorities deducting tax at source. Monthly 10th of the next month
GSTR-8 Details of supplies effected through e-commerce operator and the amount of tax collected Monthly 10th of the next month
GSTR-9 Annual Return Annually 31st December of next financial year
GSTR-9A Annual Return Monthly 31st December of next financial year
GSTR-10 Final Return for cancellation of GST registration At the time of cancellation or surrender Within three months of the date of cancellation or date of cancellation order, whichever is later.
GSTR-11 Details of inward supplies to be furnished by a person having UIN and claiming refund Monthly 28th of the month following the month for which statement is filed
3Penalty for non-filing or late filing of GST Returns
  • A penalty of 100 INR per day is applicable for latefiling of GST return. The penalty would be payable for the period in which the taxpayer failed to furnish the return. The maximum penalty is 5000 INR.
  • In case, a taxpayer fails to file GST return for any month, then theGST return for the next month cannot be filed by him.
  • Further, if a taxpayer fails to file GSTR-2 return on the 15th, then the taxpayer would not be able to file GSTR-3 return on the 20th.
  • The latefiling of GST return results in a cascading effect that leads to heavy fines and penalty.
4What is composition scheme?

The GST Composition scheme is an easy and convenient tax scheme for small and medium enterprises. Under this scheme, firms can pay a fixed percentage of their turnover as tax. They need to file reduced number of returns compared to normal tax payers under GST. The floor rate of tax for CGST and SGST shall not be less than 1%. The turnover of an enterprise should be below 75 INR lakhs and in case of north-eastern states it should be 50 lakhs INR.

Who can avail composition scheme?

A dealer who:

  • Deals only in the intra-statesupply of goods or service of only restaurant sector.
  • Does not supply non-taxable goods.
  • Pays tax at normal rates in case he is liable under reverse charge
  • Is not an e-commerce operator.
  • Is not a manufacturer of ice cream, pan masala or tobacco (and its substitutes).
5What are HSN and SAC codes?
These codes are allotted to all the goods or services in supply. HSN means "Harmonized System of Nomenclature", a universally accepted 6-digit uniform code for goods and has been developed by World Customs Organization (WCO). SAC code is meant for services. In India, we use 8-digit HSN and SAC codes, where the first 2 digits of the code stand for the chapter where the good or service is listed in the Code List. Next 2 digits are the Chapter, followed by 2 digits for the product. Last 2 digits are a classification of the product. HB-GST has inbuilt HSN and SAC codes.
6What is offline utility?
The offline utility of HB-GST helps you create your invoices in the offline mode as per your convenience. In case the user is facing certain internet connectivity issues, then he may switch over to the offline mode.

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