Tally Notes: TDS (Tax Deducted at Source)

Friday, 22 February 2013

TDS (Tax Deducted at Source) - Tally.ERP 9

Introduction

TDS refers to Tax Deducted at Source. The concept of TDS was introduced in the Income Tax Act, 1961, with the objective of deducting tax on income, from the source of the income. It is one of the methods of collecting Income Tax, which ensures a regular flow of income to the Government.

Example: Universal InfoTech is making the payment towards Rent to the owner of the building. TDS is supposed to be deducted by Universal InfoTech from the rent that is to be given to the owner. If the rent amount is Rs.10,000/- & the TDS amount is Rs.1,000/-, Universal InfoTech deducts Rs.1,000/- and pays the owner Rs.9,000/-

TDS Certificate

TDS certificate is a proof that deductor has deducted the tax and paid the same to the government. This proof is essential to the deductee to claim the credit of tax in his Income Tax returns.

U/s 203 of Income Tax Act, any person deducting the tax as per the provisions of:

Section 192 (Salary) shall furnish a certificate of Deduction of tax in Form 16 or Form 16AA within one month from the close of Financial year in which such deduction was made.

Example: For the Financial Year 2007-2008, the TDS certificate must be issued on or before 30th April, 2008

Section 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194-I, 194J, 194K, 194LA, 195, 196A, 196B, 196C and 196D shall furnish a certificate of Deduction of tax in Form 16A with one month from the end of the month during which the credit has been given or the payment has been made, as the case may be.

In case of a deductee to whom more than one TDS certificate was issued for the deductions made during the year, may on request from such deductee, a consolidated certificate in Form 16A may be issued within a period of one month from the close of such financial year.

e-TDS Returns

The Income Tax department has now notified ‘Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003’. It is applicable to all deductors furnishing their TDS return in electronic form. As per this scheme,

It is mandatory for corporate deductors to furnish their TDS returns in electronic form (e-TDS return) with effect from June 1, 2003.
For government deductors it is mandatory to furnish their TDS returns in electronic form (e-TDS return) from financial year 2004-2005 onwards.
Deductors (other than government and corporates’ ) may file TDS return in electronic or physical form.

Deductors furnishing TDS returns in electronic form (e-TDS) have to furnish Form 27A. Form 27A is a control chart to be furnished in physical form along with CD/ Floppy containing the e-TDS returns. Form No 27A is required to be furnished separately for each TDS return.

Form 27A is a summary of e-TDS returns which contains control totals of ‘Amount paid‘ and ‘Income tax deducted at source’. The control totals mentioned on Form 27A should match with the corresponding control totals in e-TDS returns.

Returns and Timelines

The following Returns are required to be filed under TDS:

Financial Year	Form No.	Particulars	Periodicity
2008-09	Form 26	Annual return of deduction of tax in respect of payments other than salary	Annual
	Form 27	Annual return of deduction of tax in respect of payments other than salary made to Non-residents	Annual
	Form 27A	Physical control charts containing control totals mentioned in TDS returns furnished electronically. Form 27A in physical form to be submitted along with e-TDS annual return forms. With each e-TDS returns Form 26 and/ or Form 27.	With each e-TDS returns Form 26 and/ or Form 27.
2008-09	Form 26 Q	Quarterly return of deduction of tax in respect of payments other than salary	Quarterly
	Form 27Q	Quarterly return of deduction of tax in respect of payments other than salary made to Non-residents.	Quarterly
	Form 27A	Physical control charts containing control totals mentioned in TDS returns furnished electronically. Form 27A in physical form to be submitted along with e-TDS quarterly return forms	With each e-TDS returns Form 26Q and/or Form 27Q.

Changes in Finance Act (02) 2009
As per Finance Act (02) 2009

Surcharge and Cess is not applicable for the Financial Year 2009-10 with effect from 1-4-2009. For tax deduction only the specified TDS rates are considered.
For some of the Nature of Payments TDS rates have been changed. The changed tax rates are applicable form 1-10-2009

Changed tax rates are as follows

NEW E-TDS FVU VERSION 3.6 PERTAINING TO FY 2012- 13 AND ONWARDS

From 16-10-2012 onwards all e-TDS/TCS regular returns would have to be filed in the modified data structure using E-TDS FVU Version 3.6

Below is the screen shot of the new FVU (ver 3.6) with its field description.

1. TDS / TCS Input File Name with Path

Specify the name (with the .txt extension) of the input file (including the path) i.e. the name of the e-TDS/TCS statement generated as per file format to be validated by the FVU 3.6

2. Challan Input File name with Path

This is a field provided to specify the challan Input File Details.
Challan Input File will be available as download from NSDL’s website https://tin.tin.nsdl.com/oltas/index.html. The downloaded file will have the extension “.csi”
Downloaded Challan Input File contains the challan status inquiry for the verification of challan in TDS/TCS statement.
Challan Input file Name is a 16 Digit TAN based Alpha Numeric Number with the file extension .csi

Example: MUMM10001A051010.csi ( First 10 digits is Tax Assessment Number (TAN) and Next 6 digits indicate the date on which the file is downloaded)

3. Error/Upload & Statistics Report File Path

Specify the path where either an 'error' or 'upload & statistics report files' generated by the FVU on completion of validation should be saved. The path can be same as the input file path or different. Do not specify any filename, only provide the path
In case of an 'invalid file', an 'error file' will be generated. This will be an html file with the same filename as the input file with err appended after the file name and html as extension