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
S.NO FOURTH CHARACTER of PAN STATUS OF ASSESSEE
1   P INDIVIDUALS
2 H HINDU UNDIVIDED FAMILY
3 F FIRMS
4 C COMPANY
5 T TRUSTS
6 A ASSOCIATION OF PERSONS
7 B BODY OF INDIVIDUALS
8 L LOCAL AUTHORITY
9 J ARTIFICIAL JUDICIAL PERSON
10 G GOVERNMENT
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?

GSTR-1

  • This is a monthly return containing details of outward supplies (sales) made during the tax period. Every regular registered person is required to file GSTR-1 irrespective of whether there are any transactions during the month or not. It has a provision for ‘NIL Return’ as well.
  • Every regular registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year, may opt to file GSTR-1 on quarterly basis.

GSTR-2

GSTR-2 is a monthly return containing details of purchases or inward supplies, to be filed by every registered person under regular scheme. (This is not in operation since implementation of GST)

GSTR-3

GSTR-3 is a monthly GST return that is generated by extracting information from GSTR-1 & GSTR-2. It shows the amount of liability for the month, to be filed by every registered person under regular scheme. (This is not in operation since implementation of GST)

GSTR-3A?

This is the tax notice issued by the tax authority to a defaulter who fails to file GST returns.

GSTR-4

This is a return for taxpayer registered under composition scheme in GST. Earlier it was filed on quarterly basis but after April 1, 2019 [i.e. from F.Y. 2019-20] it will be filed on annually, it contains all the details of purchases, sales, and tax paid for a given financial year.

CMP-08

This is a payment form to be filed by the composition dealer. This is a new form introduced w.e.f. April 1, 2019 [i.e. from F.Y. 2019-20] and to be filled on quarterly basis. It contains details of tax payable on outward supplies and inward supplies under reverse charge.

GSTR-4A

GSTR-4A is an auto-drafted and read only form, where all the B2B purchases and TDS credit are auto-populated based on the information furnished in the GSTR-1, GSTR-5, and GSTR-7 by the corresponding suppliers.

GSTR-5

It is a monthly return filed by every Non-Resident taxable person under GST. It contains the details of outward supplies, inward supplies and tax payable thereon.

GSTR-5A

It is a monthly return for furnishing details of supplies of online information and database access or retrieval services supplied by person located outside India and made to non-taxable person in India.

GSTR-6

It is a monthly return for Input Service Distributors (ISD). This return is used to distribute Input Tax Credit to its units. It contains the details of inward supplies on which credit received and distribution of the same.

GSTR-7

GSTR-7 is a monthly return for furnishing TDS transactions. It contains the details of tax has been deducted (SGST, CGST, and IGST) against each GSTIN, TDS paid and any other payment such as interests and penalties.

GSTR-8

GSTR-8 is a monthly return for furnishing TCS transactions. It contains the details of supplies made through e-commerce operator on which tax has been collected by the e-commerce operator, which included supplies attracted TCS and TCS collected thereon.

GSTR-9

This is an annual return to be filed by every registered taxpayers who were regular taxpayers, including SEZ Unit and SEZ Developer. It is a consolidated return that contains all the details of purchases, sales, input tax credit and tax paid for a given financial year.

GSTR-9A

This is an annual return to be filed by the every registered taxpayer who were taken registration under composition scheme in GST. It is a consolidated annual return that contains all the details of purchases, sales, and tax paid for a given financial year.

GSTR-9B

This return is filed by the e-commerce operators who are required to collect TCS in GST and filed GSTR-8 during the financial year.

GSTR-9C

It is a reconciliation statement, duly verified and signed by Chartered Accountant/Cost Accountant and required to be furnished along annual return GSTR-9 by the taxpayer whose aggregate turnover is above ₹2 Crore during a financial year. It basically contains reconciliation of Audited Financial Statement and Annual Return GSTR-9 filed for a given financial year.

GSTR-10

It is a final return for the taxpayers (registered as regular taxpayer) whose registration has been cancelled or surrendered. It contains details of stock of inputs, inputs contained in semi-finished or finished goods and stock of capital goods/plant and machinery held by such taxpayer on the day immediately preceding the date from which cancellation is made effective on which input tax credit has been availed and tax payable thereon.

GSTR-11

This is not a return rather it is a refund form to be furnished by the Unique Identification Number holder. It contains details of purchases made by foreign embassies and diplomatic missions (UIN holders) on which tax has been paid and refund claimed thereon.

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 by the regular taxpayer whose turnover is more than Rs. 1.5 Crore or who opted monthly return

Monthly

11th of the next month

GSTR-2 & GSTR-3

Not in operation

NA

NA

GSTR-4

Return for taxpayers opted composition scheme under GST

Annual

30th April of following the end of F.Y.

CMP-08

Payment of tax by the taxpayers opted composition scheme under GST

Quarterly

18th of the month following the end of Quarter

GSTR-5

Return for a Non-Resident foreign taxable person

Monthly

20th of the next month

GSTR-5A

Return for OIDAR Service provider located outside India

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

Return for e-commerce operator who collected TCS

Monthly

10th of the next month

GSTR-9

Annual Return by the taxpayer registered under regular scheme

[Applicable only for the taxpayer whose turnover during the financial year is more than Rs. 2 Crores.]

Annually

31st of the December following the end of the F.Y. [For F.Y. 2017-18 Due date is 31-Jan-2020]

GSTR-9A

Annual Return by the taxpayer registered under composition scheme.

[For F.Y. 2017-18 & 2018-19, it is optional for the taxpayers]

Annual

31st of the December following the end of the F.Y. [For F.Y. 2017-18 Due date is 31-Jan-2020]

GSTR-10

Final Return for cancellation of GST registration

At the time of cancellation

Within 3 months from the date of effective date of cancellation or date of cancellation order, whichever is later

GSTR-11

Return by the UIN holder for claiming refund

Quarterly

There is no due date, it can be filed any time after the end of quarter

3Penalty for non-filing or late filing of GST Returns

The applicable penalties for non-filing of GST returns [GSTR-1, GSTR-3B, GSTR-4, GSTR-5/5A, GSTR-6, GSTR-7, GSTR-8 and GSTR-9] within the due date are mentioned below.

Name of the Act Late fees for every day of delay
Late fees for intra-state supplies
Central Goods and Services Act, 2017 ₹100
Respective State GST Act, 2017 (or) UTGST Act, 2017 ₹100
Total late fees to be paid ₹200
The law has fixed a maximum late fee of ₹5,000 for each return being filed under each Act.
Late Fee for Nil filers
Name of the Act Late fees for every day of delay
CGST Act ₹50
SGST Act ₹50
Total Act ₹100

However, CBIC has reduced the late fees amount [for GSTR-1, GSTR-3B, GSTR-4, GSTR-5/5A, GSTR-6] as a relief for businesses having difficulties in using the GST portal.

Name of the Act Late fees for every day of delay
Late fees for intra-state supplies
Central Goods and Services Act, 2017 ₹25
Respective State GST Act, 2017 (or) UTGST Act, 2017 ₹25
Total late fees to be paid ₹50
Late Fee for Nil filers
Name of the Act Late fees for every day of delay
CGST Act ₹10
SGST Act ₹10
Total Act ₹20
4What is composition scheme?

The GST Composition scheme is an easy and convenient tax scheme for small and medium enterprises. The objective of the scheme is to bring simplicity and to reduce the compliance cost for small taxpayers. An eligible person opting to pay tax under the composition scheme shall, instead of paying tax on every invoice at the specified rate, pay tax at a prescribed percentage of his turnover every quarter. Currently, a person, whose aggregate turnover in the preceding financial year did not exceed 1.5 Crore, may opt to pay tax under composition scheme if he qualifies other conditions as specified. However for the special category states the turnover limit is 75 Lakh. [There are 8 special category states who opted lower limit; Arunachal Pradesh, Uttarakhand, Manipur, Mizoram, Meghalaya, Nagaland, Sikkim and Tripura] Tax rates under composition scheme are as follows:

S.No Category of registered persons Rate of Tax
1 Manufacturers, other than manufacturers of such goods as may be notified by the Government, i.e. ice cream, pan masala and tobacco. 1% of the turnover in the state/union territory
2 Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II [hereinafter referred to as Restaurant service] 5% of the turnover in the State/Union territory
3 Any other supplier eligible for composition levy under section 10 of CGST Act and Chapter-II [Traders] 1% of the turnover in the state/union territory

Who can avail composition scheme?

A dealer who:

  • Deals only in the intra-state supply of goods
  • Does not engaged in the supply of the services other than restaurant sector. However, As per the latest amendment, where the turnover of a registered person opting for composition scheme is up to 50 lakh in the preceding financial year, he can supply services [other than restaurant services] up to a maximum value of 5 lakh in the current financial year.
  • Does not supply non-taxable goods
  • 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 the World Customs Organization (WCO) with vision of classifying goods all over the world in systematic manner.

SAC refer to “Service Accounting Code” which is meant for services.

In India, we use 8-digit HSN and 6-digit SAC codes, where the first 2 digits of the code stand for the chapter, and next 2 stands for heading, further next 2 stand for sub-heading and last 2 stands for specific item. In GST, there are 99 chapters, where 1-98 chapters contains HSN and chapter 99 contains HAC. 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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