What is TDS? How to file TDS returns

Last Updated On: Nov. 20, 2021, 11:39 p.m.


What is TDS?

TDS or Tax Deducted at Source is a specific amount that is reduced when a certain payment like salary, commission, rent, interest, professional fees, etc. is made. The person who makes the payment deducts tax at the source, while the person who receives a payment/income has the liability to pay tax. It lowers tax evasion because the tax will be collected at the time of making a payment.



When should TDS be deducted and who is liable to deduct?

Any payment specified under Income Tax Act, then TDS will be deducted at the time of these payments. However, no TDS will be deducted if you are an individual or Hindu Undivided Family (HUF), and your books are not required to be audited.

In case of rent payment by an individual or HUF member, where the amount payable exceeds Rs.50,000, then a TDS at 5% will be deducted even if your books are not liable for a tax audit. You will not be required to apply for a Tax Deduction Account Number (TAN) if you are liable to have TDS deducted at 5%.

If you are a working professional then your employer will deduct TDS as per the applicable income tax slab rates. The bank with whom you hold a working account will deduct TDS at 10%. However, if they do not have your PAN details, then TDS at 20% will be deducted. For the majority of payments, TDS rates are set in the Income Tax Act the payer deducts TDS as per the rates applicable.

You will not be required to pay any tax if you submit your investment proofs to your employer and your total income that can be taxed is below the total taxable threshold. Thus, no TDS will be deducted in this case. You can also submit Form 15G and Form 15H to the bank if the total taxable income is below the total taxable limit. The bank in this case will not deduct any TDS on your interest income.

In case you failed to submit the investment proof to your employer and the bank deducted the TDS, you can file a return and claim a refund of it, provided your total taxable income is below the total taxable limit.




The list of documents are as follows:

  • PAN cards of the deductee and the deductor
  • Tax amount paid to the government
  • Details on TDS challan


Steps to follow to file TDS returns

  • Deductors must use form 27A to file returns along with quarterly statements. This form summarises the quarterly statements and contains the amount paid and the TDS. Take a look at the process of how to file a TDS return.
  • Carefully fill the sections of the amount paid and the Tax Deducted at Source by tallying it with respective forms.
  • The assessee must enter their Tax Deduction Account Number in this form for accurate verification.
  • It is also difficult to mention the details of a TDS deposit while filing the return.
  • As per the basic e-TDS return form format, one must enter the 7-digit Bank Branch Code or BSR code. The Reserve Bank of India gives this code to banks.
  • To file a TDS return online, assessees should follow a certain format. This is achievable using a software named Return Prepare Utility (e-TDS RPU) from the NSDL (National Securities Depositories Ltd). It is important to note that the file must come with a ‘txt’ filename extension.
  • Now the deductor has to sign the form digitally and submit the same in the NSDL Tax Information Network portal. To know how to submit a TDS return online, one must be accustomed to digital signatures.
  • After submission, an individual will receive an acknowledgement receipt containing a token number. In case of rejection of returns, the deductor will receive a non-acceptance memo stating the reasons for rejection.



Quarter Period Last Date to file TDS
1st 1st April-30th June 31st July 2021
2nd 1st July-30th September 30th October 2021
3rd 1st October-31st December 31st January 2021
4th 1st January-31st March 31st May 2021


How to upload TDS statements?


  1. Visit https://www.incometaxindiaefiling.gov.in/home. On the right side of the page, you will see ‘Registered User?’ followed by the ‘Login Here’ option.
  2. Click on the option and fill in your login information before clicking on ‘Login’. Your TAN will be your user ID.
  3. After you have logged in, locate the ‘TDS’ drop-down menu where you will have to select ‘Upload TDS’.
  4. A form will displayed, and you will have to choose the right details before clicking on ‘Validate’.
  5. You will then have to validate your returns using either DSC or EVC.

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