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Types of TDS return forms- Overview and Description

According to the Indian Taxation Code, Tax Deducted at Source (TDS) is a type of advance tax that is deducted from an individual’s or organization’s earnings before the money is credited into that entity’s account. The government can generate revenue by enforcing TDS provisions on the earnings of individuals and businesses. The Central Board of Direct Taxes controls and governs TDS rules and regulations under the Income Tax Act of 1961. (CBDT). “Tax Deducted at Source” implies that the payee or employer deducts the tax before making a payment to the receiver, as the name suggests. Tax Deducted at Source applies to income earned on a regular basis as well as income earned on an irregular or sporadic basis. As a result, TDS is levied on a variety of incomes, including, but not limited to, salary, commission, rent, professional fees, and interest.

TDS is levied on payments such as salaries, commissions, professional fees, interest earned, rent, and so on. TDS is levied at different rates depending on the type of income and the amount of income earned. As a result, different types of income have different TDS rates, and the tax is paid on the excess amount earned after a certain maximum threshold limit is reached. TDS is levied at a rate ranging from 1% to 30%, depending on the amount of income taxed.

A TDS Return is a summary of all TDS transactions made during a fiscal quarter. TDS Return is a quarterly statement submitted by the deductor to the Income Tax Department. The statement contains a summary of all the entries for TDS collected by the deductor and TDS paid to the Income Tax Authority by the deductor. The TDS Return statement includes information such as the deductor’s and deductees’ PAN numbers, all of the specifics of the TDS paid to the government, and the TDS Challan information. Because the deductor is required to deduct tax and file the TDS Return form as a supporting document, it is important to understand that there are different types of TDS Return Forms for different situations. The type of TDS Return Form to be submitted is determined by the deductee’s Nature of Income or the type of deductee who pays the TDS.

There are mainly four types of TDS Return Forms which are as follows:

  1. Form 24Q- It is used to generate eTDS returns for TDS deducted from salaries under Section 192 of the Income Tax Act of 1961. The deductor is required to submit it on a quarterly basis. It includes information such as salaries paid and TDS deducted from employees by the employer. It has two annexures, Annexure-I and Annexure-II. Annexure I contain information about the deductor, deductees, and challans, while Annexure-II contains information about the deductees’ salaries. The deductor must submit Annexure-I for all four quarters of the fiscal year. Annexure-II does not need to be submitted during the first three quarters of the fiscal year, but it must be furnished and submitted during the fourth quarter of the fiscal year with details of the employees’ salaries for the entire fiscal year.
  2. Form 26Q- It is required to submit it for tax deduction at source for all payments received other than salary. It is submitted by the deductor on a quarterly basis and is applicable for tax deducted at source under sections 200(3), 193 and 194 of the Income Tax Act of 1961. Interest on securities, dividend securities, professional fees, director’s remuneration, and other income on which tax is deducted at source are examples of such income. Non-government deductors are required by law to provide their PAN. “PANNOTREQD” must be mentioned on the form for government deductors.
  3. Form 27Q- It applies to non-salary payments made to non-resident Indians and foreigners. For NRIs and Foreigners, it must be completed for the declaration of Tax Deducted at Source. It is submitted by the deductor on a quarterly basis and is applicable for tax deducted at source under section 200(3) of the Income Tax Act of 1961. Interest, bonuses, additional income, and any other sum owed to a non-resident Indian or foreigner are all examples of income on which tax is deducted at the source. Non-government deductors are required to provide their PAN. The code “PANNOTREQD” must be mentioned on the form for government deductors.
  4. Form 27EQ- It is a quarterly statement that provides details and information about the tax collected at the source in accordance with Section 206C of the Income Tax Act of 1961. The form 27EQ is submitted once a quarter. It is required to provide TAN on this form. It is the statement that shows the Tax Collected at Source (TCS), which is the tax that the seller collects.
    By Siddhant Dutta