TDS Filing & Compliance
TDS Filing & Compliance
Tax Deducted at Source (TDS) involves withholding tax from income at the time of payment. Individuals and organizations responsible for deducting TDS are legally obligated to file quarterly TDS returns by the specified due dates, providing detailed information about the deductions made. Managing TDS return filing and making online TDS payments can often be complex. Stride Tax offers professional support to simplify this process. Our experts guide you through every step, ensuring accurate filing, timely online payment, and full compliance with tax regulations—making it easier for you to meet your TDS obligations with confidence.
TDS - Tax Deducted at Source
Tax Deducted at Source (TDS) is a system where tax is withheld by the payer (also known as the deductor) at the time of making certain specified payments to the recipient (or deductee). This deduction applies to various transactions such as salaries, rent, interest, professional fees, and commissions. Although the ultimate tax liability lies with the recipient, the TDS system ensures that tax is collected in advance by deducting it directly from the payment.
The deducted tax must be deposited online by the deductor, and they are also required to file TDS returns in accordance with legal requirements. The recipient receives the net amount after TDS has been applied and must report the gross amount (before deduction) in their income tax return. Online TDS filing is a critical step in complying with TDS rules and regulations, helping to ensure transparency and timely tax collection by the government.
TDS Rates & Key Sections
TDS (Tax Deducted at Source) rates differ depending on the type of income such as salaries, interest, professional fees, rent, and commissions. The applicable rate is determined by the nature of the payment and the recipient’s income classification. Note that TDS rates are subject to periodic revisions by the government.
Below is a summary of key TDS sections and their applicable rates:
| Section | Type of Payment | TDS Rate |
|---|---|---|
| 192 | Salary | As per income tax slab |
| 194A | Interest (other than securities) | 10% |
| 194C | Contractor/Sub-contractor payments | 1% (Individual/HUF), 2% (Others) |
| 194I | Rent (Land/Building/Machinery) | 2% (Machinery/Plant), 10% (Land/Building) |
| 194J | Professional/Technical Services | 10% |
Who is Required to File a TDS Return?
Entities that are required to deduct tax at source—such as employers and organizations holding a TAN (Tax Deduction and Collection Account Number)—are legally obligated to file quarterly TDS returns. This obligation also applies to individuals subject to tax audits under Section 44AB of the Income Tax Act, as well as government bodies and corporate entities.
Meeting the TDS return filing due dates is crucial to avoid penalties and potential legal consequences. TDS must be deducted, deposited online, and reported using the correct forms within the specified time frame.
A wide range of entities are recognized as deductors under TDS rules, including:
- Individuals
- Hindu Undivided Families (HUFs)
- Partnerships
- Corporations
- Local authorities
- Associations of persons (AOPs)
These deductors are responsible for depositing TDS online and submitting quarterly TDS returns accurately and on time.
Transactions That Require TDS Deduction and Filing
Under the Income Tax Act, TDS must be deducted and filed for various types of payments, including:
- Salaries
- Income from securities
- Winnings from lotteries, puzzles, and games
- Winnings from horse races
- Insurance commissions
- Payments under the National Savings Scheme
- And other specified payments
TDS Return Filing Due Date
Meeting the TDS return filing deadlines is essential for staying compliant with income tax regulations. For every financial quarter, returns must be submitted by specific due dates to avoid penalties or legal issues.
The quarterly schedule for TDS return filing is as follows:
| Quarter | Period Covered | TDS Return Due Date |
|---|---|---|
| Quarter 1 | April – June | 31st July |
| Quarter 2 | July – September | 31st October |
| Quarter 3 | October – December | 31st January |
| Quarter 4 | January – March | 31st May |