TDS ONLINE PAYMENT – EXPLAINED

TDS

As A Newbie, The TDS Concept Is Not That Easy To Figure Out.

The complexity and vastness make it hard to understand aspect for a normal person. Also, the rules and regulations are changed on a recurring basis and several other reasons add to it. The TDS payment process has to be done with the extreme presence of mind for which a deeper understanding is required. This article helps you understand TDS online filing to the Income Tax Department (ITD).

What is TDS anyhow?

TDS or Tax Deducted at Source is the exercise where an employer deducts some amount at the time of releasing salaries to employees. The deducted amount is to be deposited to the Income Tax Department (ITD) by the employer under the Income Tax Act, 1961. This process of tax deduction and deposition to ITD is in a continuous manner unless the government makes any changes relating to it. Here the employer is referred to as deductor and employee as deductee. The deduction is done when there is amount credited or payment made for the services, whichever is earlier. The employee after the deduction gets the net salary also called as In-hand salary. TDS is remitted to the ITD monthly, which consists of the sum of all the deductions done for the payments in the respective month. This sum amount is to be paid before 7th of every succeeding month except for March. For example, the month of the April for which the TDS deductions has been carried out, the same amount is deposited to the government by 7th of May but for the end of the financial year i.e. for March the TDS can be paid to ITD by 30th April due to the reasons that it is the end of the year and a lot of processes are carried out and this is an exception for reducing the pressure and clumsiness in carrying out the financial operations.

Below shown table consists of the due dates for the TDS payments to ITD for every month.

Month Due Date
April 7th May
May 7th June
June 7th July
July 7th August
August 7th September
September 7th October
October 7th November
November 7th December
December 7th January
January 7th February
February 7th March
March 30th April

The TDS varies with varying income slabs at definite rates. Below shown tables are tax slabs for the FY 2019-2020:

 

1) Individuals and Hindu Undivided Family (HUF) less than 60 years old: –

Income Tax Health and Education Cess
 Till Rs.2,50,000 Nil Nil
Rs.2,50,001-Rs.5,00,000 5% of (Total Income minus Rs.2,50,000) 4% of Income Tax
Rs.5,00,001-Rs.10,00,000 Rs.12,500 + 20% of (Total Income minus Rs 5,00,000) 4% of Income Tax
Above Rs.10,00,000 Rs.1,12,500 + 30% of (Total Income minus Rs.10 lakh) 4% of Income Tax

Surcharge: When the total income is Rs.50 lakh or more but less than Rs.1 crore, the surcharge is 10% of the income tax. 15% of surcharge is levied when the total income is more than Rs. 1 crore.

 

2) Senior Citizens who are 60 years old or higher, but less than 80 years old: –

Income Tax Health and Education Cess
Up to Rs. 3,00,000 Nil Nil
Rs.3,00,001-Rs.5,00,000 5% of (Total income minus Rs.3 lakh) 4% of Income Tax
Rs.5,00,001-Rs.10,00,000 Rs.10,000 + 20% of (Total income minus Rs.5 lakh) 4% of Income Tax
Above Rs.10,00,000 Rs.1,10,000 + 30% of (Total income minus Rs. 10 lakh) 4% of Income Tax

Surcharge: When the total income is Rs. 50 lakh or more but less than Rs.1 crore, the surcharge is 10% of the income tax. 15% of surcharge is levied when the total income is more than Rs. 1 crore.

3) Senior Citizens who are 80 years old or more: –

Income Tax Health and Education Cess
Up to Rs.5,00,000 Nil Nil
Rs.5,00,001-Rs.10,00,000 20% of (Total income minus Rs.5 lakh) 4% of Income Tax
Above Rs.10 lakh Rs.1 lakh + 30% of (Total income minus Rs.10 lakh) 4% of Income Tax

Surcharge: When the total income is Rs.50 lakh or more but less than Rs.1 crore, the surcharge is 10% of the income tax. 15% of surcharge is levied when the total income is more than Rs. 1 crore.

Health and Education Cess are deducted at definite rates in parallel with TDS.

 

4) Domestic Companies: –

Company’s Turnover Tax
If the gross turnover in the previous year is less than Rs.250 crore 25%
If the gross turnover in the previous year is more than Rs.250 crore 30%

Cess: 4% of the corporate tax

Surcharge: When the taxable income is higher than Rs.1 crore but less than Rs.10 crore, the applicable surcharge will be 7%. Surcharge of 12% is levied when the taxable income is more than 10 crore.

 

GETTING TAN: –

Before deducting TDS, the deductor should obtain the TAN (Tax Deduction Account Number). TAN is required to generate the details of challans, TDS certificates, returns etc. TAN is attained through Form 49B. Failing to do so, the person i.e. deductor shall be liable to a penalty of Rs.10,000/- Deductor can apply TAN from official NSDL site. From there follow the guidelines as provided and this will cost you Rs.65/-

TDS RETURN FILING: –

Now moving to TDS Return Filing, it is a quarterly statement that is to be filed which consists of details such as TDS payment, deductor, and deductee. Any individual who is making payment for the services done are to deduct the tax from the recipient. TDS returns are filed through FORM 24Q. For every quarter the TDS return are filed. If there is a delay in filing, then a sum of Rs. 200/- shall be paid by the employer as a penalty per day.

OLTAS: –

Previously the Income Tax Department used to collect tax from banks manually which was tedious and it incurred a lot of errors. Online Tax Accounting System (OLTAS) was introduced to reduce the complications in tax collection through online means by levying direct taxes on individuals and companies. The data relating to tax payment is transferred to TIN (Tax Information Network) through OLTAS. A single copy challan is used by OLTAS for certain categories of tax payments which is also followed by most of the banks. Once the data Is uploaded, the taxpayer can check the status of challans online through OLTAS.

OLTAS provides a single copy of challan that will be used by the taxpayers. For depositing TDS, Challan Number ITNS 281 is used.

On the site, the taxpayer will have certain options and tools to access the data related to tax payment such as the CIN based view and TAN based view. The taxpayer receives CIN (Challan Identification Number) when the payment is done to a bank or any other source that accepts TDS payments. Thereafter the taxpayer can log in to TIN-NSDL and enter the CIN that he received to check the tax payment details online. The bank provides the challan in which the taxpayer has to fill the details and it also has a tear-off portion which contains the CIN (Challan Identification Number), bank details and other details. CIN is an acknowledgment to realize that your tax is paid. In case CIN is lost the TAN can also be used to inquire the details.

With CIN based view, after entering CIN (Challan Identification Number) the following details can be accessed: –

  • BSR Code
  • Date of Deposit
  • Challan Serial Number
  • Major Head Code with description
  • TAN/PAN
  • Name of Tax Payer
  • Date on which challan was received by TIN
  • Confirmation that the amount entered is correct

The taxpayer can view the below-shown data with TAN based view, after entering TAN and payment date of challan: –

  • CIN
  • Major Head Code with description
  • Minor Head Code
  • Nature of Payment

There are various advantages attached to OLTAS.

  • Tax paying process is easy, hassle-free and can be done from any location.
  • A single challan is used in contrast to the previous system that requires to fill multiple challans.
  • Can check the status of challan and tax payment details instantly.
  • No longer waitings, an immediate acknowledgment is issued for the tax paid to the taxpayer at the bank.

 

Form 24Q: –

TDS Return filing uses FORM 24Q. There are two annexures in FORM 24Q as Annexure I and Annexure II. These are to be filed by the employer taking the deductions into account. Submission of proofs is to be done if TDS deduction is fewer than the rated from the employee’s salary. It is a compulsion that Annexure I to be presented for all the quarters in the financial year.

The tax payment details that are to be filled in Annexure I are

  • BSR code of branch
  • Date of deposition of challan
  • Challan serial number
  • Total amount in challan
  • TDS amount to be allocated among deductees
  • Interest amount to be allocated among deductees

The details of deductees to be filled in Annexure I are

  • Employee reference number (if available)
  • PAN of the employee
  • Name of the employee
  • TDS Section Code
  • Date of payment/ credit
  • Amount paid or credited
  • TDS amount
  • Education Cess

For Annexure II, the details such as the total breakup of the salary, deductions to be claimed by the employee, his income from other sources, and house property and overall tax liability are calculated. It can be filed only for the last quarter.

You can view the sample form here.

Below shown table consists of the due dates for quarterly submission of TDS return through FORM 24Q:

                             Quarter                                    Due Date
Q1) April to June                                 31st of July
Q2) July to September                                 31st of October
Q3) October to December                                 31st of January
Q4) January to March                                 31st of May

 

TRACES: –

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System. It was introduced by the Income Tax Department in a view to fasten and ease the process of filing TDS correction statements for the deductors online. FORM 16 can be downloaded from TRACES site. The taxpayer or deductor should register at TRACES site.

The registration is available for the deductors and taxpayers. The portal provides the following services

  • Registration for Tax-Deductors and taxpayers
  • Electronic filing of TDS Statements – Original and Corrections
  • View Statement Processing Status and TDS Defaults
  • View Tax Credit Statement (26AS) of taxpayers
  • Digital TDS Certificates – Forms 16/16A/16B in reconciliation with 26AS
  • Justification Report for details of TDS Defaults
  • Consolidated File for submitting corrections to the TDS Statements
  • Aggregated TDS Compliance Report for Tax-Deductor PAN with multiple associated TANs
  • Online TDS Statement Corrections
  • Secured Integration with corporate Tax-Deductors
  • TDS Refunds

 

FILE VALIDATION UTILITY: –

It is a tool provided by NSDL for the verification and submission of tax payment data to Tax Information Network online. This is a quarterly statement that has to be filed with a prescribed format. Form 24Q is validated with this utility. For both Regular Tax Statements and Correction Tax Statements the FVU is used. It can be downloaded from the official site (TIN). The instructions and the setup file are in compressed format.

The instructions for extraction, installation, and running the FVU are shown on the FVU page of TIN website.

Steps For TDS Payment With Keka:-

 TDS payment through Keka is made very simple. Instead of going for a third party for this service, the operations such as deductions, calculations, exemptions etc. are done through Keka itself. This lessens the burden of executing the TDS payment task.

Follow the steps for TDS payment as shown below.

Step 1: – Go to NSDL’s website for e-payment of taxes & select applicable challan.

NSDL website

Step 2: – Click ‘Proceed’ on ‘CHALLAN NO./ITNS 281’. You will be directed to the e-payment page.

e payment of NSDL

Step 3: –

  • Fill in the required details here: TDS Payment
  • Under ‘Tax Applicable’ select ‘Company Deductees’
  • Select whether the payment is made for TDS deducted and payable by you or TDS on regular assessment.
  • Select the ‘Nature of Payment’ and ‘Mode of Payment’ from the drop-down.

step 3 TDS

  • Enter the TAN and Assessment Year for which the payment is made.
  • Enter the ‘Pin Code’ and select ‘State’ from the drop down.

step 3 part 2 NSDL

  • Enter the Captcha code and click on ‘Proceed’ button.

NSDL Captcha

Step 4: –

  • On submission, a confirmation screen will be displayed to review details entered by you.
  • Check if TAN & Taxpayer details are valid as per the master displayed on the confirmation screen.
  • On confirmation of the data entered, you will be redirected to the payment page.
  • Log on to the net banking site and complete payment.

Step 5: –

  • On successful payment, a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made.
  • This counterfoil (CSI file) is proof of the payment made.
  • This file is can be used to file your TDS returns in Traces.
  • You can also download CSI file anytime here using your CIN/TAN number from the website.

Step 6: –

  • Log on to Keka & Navigate to Payroll >> Payroll Admin >> Income Tax & TDS Management.

step 6 keka

Step 7: –

  • Check Tax Deducted for all 3 months in a Quarter and follow Step 1 to Step 4 to make Payment & download Challan & CSI file.

step 7 keka

Step 8: –

    • Click on ‘Add Challan’ against each month in a Quarter.

step 8 keka

Step 9: –

  • Fill in all the challan details against each month in a Quarter.

step 9 keka

Step 10: –

  • Click on ‘Employee Count’ under ‘Employees Mapped’.

step 10 keka

Step 11: –

  • Employees are automatically mapped against the challan. Make sure the Challan Balance is ‘0’ while mapping & Save.
  • Repeat this process for all three months. i.e. April, May & June (Q1)

step 11 Keka

Step 12: –

  • Save Employee Mapping to proceed with form generation.

step 12 keka

Step 13: –

  • Click on ‘Generate Return Files’.

step 13 keka

Step 14: –

  • Fill in all the details asked for generating return files & click on ‘Save & Generate FUV file’.

step 14

Step 15: –

  • Form 24Q is generated which allows you to download return files.

step 15

Step 16: –

  • Download the FUV file & proceed with return filing.

step 16

Step 17: –

  • Login to ITD e-Filing website with below details:
  • Valid TAN registered for e-filing.
  • FUV file downloaded from Keka.
  • Valid DSC registered for e-filing if you wish to upload using DSC. (Digital Signature Certificates) or company’s bank account or company signatory PAN linked with Aadhar if you wish to upload returns using EVC. (Electronic Verification code)

 

Final Step: –

  • Enter your login credentials and click on ‘Login’. (Your user ID will be your TAN).

tax efiling

efiling login details

  • Once you’ve logged in, click on the ‘Upload TDS’ option under the TDS tab.

upload TDS

  • You will be provided with a form where you will need to fill in the details. Once entered, click on Validate with either DSC or EVC.

validate

  • Validate using DSC. (The TDS statements can be uploaded using either DSC or EVC. to upload using DSC, first upload the TDS zip file and also attach the digital signature file. Then, click on Upload.)

upload TDS return

  • Validate using EVC. (After step 4, if you haven’t generated a DSC, you will be able to validate the TDS statements using an electronic verification code (EVC). Upload the TDS zip file and click on ‘Click here to E-verify’.)

validate using EVC

  • The next screen will give you the option to use an EVC already generated or generate a new EVC. (Select the relevant option, enter the EVC and click on ‘Submit’).

everify tds return

  • Once the TDS statement is uploaded, a success message will appear on the screen and a confirmation mail will be sent to your registered email ID.

upload TDS successful

FORM 16: –

After uploading the TDS, the employer has to provide the employee with Form 16 also called as TDS Certificate which is a form of proof showing that the TDS has been cut from employee’s salary and paid the same to Income Tax Department. In case if more TDS has been deducted then you claim for refund for the excess paid. TDS certificate is issued annually before June 15th for the financial year. A penalty of Rs.100 is laid on employer per day for delay in providing the form. Annual TDS certificate consists of the details relating to the TDS deducted from the employee’s salary and depositing the amount to ITD.

It has two parts as Part A and Part B in which the details of employer and employee, deductions, salary breakup, income details etc. are filled

FORM 26AS: –

It is an important form because it has all the information on how much tax has been deducted from other income sources such as salary, pension, TDS, PF etc. It contains information stating your tax statements. It gives the person overview of the deductions and check whether the employer has paid the tax to government on his behalf correctly, also this shows the eligibility of refund. That’s why it is important for an employee who is getting paid to keep track on the deductions.

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