TAX DEDUCTED AT SOURCE (TDS)

Updated: Jul 13, 2019

Introduction​ to TDS Return Filing


The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

Rates for deduct of tax at source


Taxes shall be deducted at the rates specified in the relevant provisions of the Act or the First Schedule to the Finance Act. However, in case of payment to non-resident persons, the withholding tax rates specified under the Double Taxation Avoidance Agreements shall also be considered


How to pay Tax Deducted/Collected at source?


Tax deducted or collected at source shall be deposited to the credit of the Central Government by following modes:


1) Electronic mode: E-Payment is mandatory for

  • All corporate assesses; and

  • All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.


2) Physical Mode: By furnishing the Challan 281 in the authorized bank branch Note:- Where tax is deducted/collected by government office, it can remit tax to the Central Government without production of income-tax challan. In such case, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called to whom the deductor reports the tax so deducted and who is responsible for crediting such sum to the credit of the Central Government, shall submit a statement in Form No. 24G.to NSDL with prescribed time-limit.


E - Pay TDS / TCS


Step-1 :

To pay taxes online, login to http://www.tin-nsdl.com > Services > e-payment : Pay Taxes Online or click here on the tab "e-pay taxes" provided on the said website. Provide proper link of e-payment


Step-2 :

Select the relevant challan i.e. ITNS 280, ITNS 281, ITNS 282, ITNS 283, ITNS 284 or Form 26 QB demand payment (only for TDS on sale of property) as applicable.

Step-3 : Enter PAN / TAN (as applicable) and other mandatory challan details like accounting head under which payment is made, address of the tax payer and the bank through which payment is to be made etc.

Step-4 : On submission of data entered, a confirmation screen will be displayed. If PAN / TAN is valid as per the ITD PAN / TAN master, then the full name of the taxpayer as per the master will be displayed on the confirmation screen.

Step-5 : On confirmation of the data so entered, the taxpayer will be directed to the net-banking site of the bank.


Step-6 :

The taxpayer has to login to the net-banking site with the user id / password provided by the bank for net-banking purpose and enter payment details at the bank site.

Step-7 : 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 is proof of payment being made.

How to file TDS Return Online ?


Step – I

The data structure (file format) in which the e-TDS / e-TCS return is to be prepared has been notified in https://www.tin-nsdl.com/services/etds-etcs/etds-rpu.html


Step – II

e-TDS/e-TCS return in accordance with the file formats is to be prepared in clean text ASCII format with 'txt' as filename extension. e-TDS/e-TCS return can be prepared using Return Preparation Utility provided by NSDL or any other third party software


Step – III

Once the file has been prepared as per the file format, it should be verified using the File Validation Utility (FVU) provided by NSDL


Step – IV

In case file has any errors the FVU will give a report of the errors. Rectify the errors and verify the file again through the FVU.


Step – V

Generated .fvu file can be submitted at TIN-FC or uploaded at http://incometaxindiaefiling.gov.in/ website

For Online upload of TDS/TCS Statement, registration of organisation at http://incometaxindiaefiling.gov.in/ is mandatory

All the tds deduction will be reflected in the Tax Credit Statement (Form 26 AS) in the deductee account after filing the TDS return by the Deductor. Deductee can simply check the form 26 As by income tax login or internet banking.


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