(TDS) Tax Return Filing in Bangalore
TDS (Tax Deducted at Source), has been introduced in order to collect tax from the source where the income of an individual is generated. To mitigate the tax evasion government uses TDS acts as a tool to collect the tax from the income either partially or wholly at the time of generation. TDS is applicable on the various ways of incomes received such as interest received, salaries, commission received etc. It is not applicable to all the persons and for all the transactions. TDS has different rates which are prescribed by the income tax act for different categories and different payments of recipients. TDS works on the concept that the person makes the specified type of payments and he can deduct the tax at the source as prescribed in the income tax act and can deposit the same amount to the government’s account. The payment is made by the person who is responsible for deducting the tax and depositing the same with the government. This person can be called as a deductor and the person who receives a payment after the tax deduction is referred as deductee.
How TDS works?
The entity which makes the payment, subject to TDS deducts a certain percentage of tax for the amount paid and pays the balance to the recipient. The recipient would get a certificate stating the amount of TDS, which is obtained from the deductor. Deductee can claim the tax amount which is paid as a tax by him.
The deductor is the one who bound to deposit the TDS with the government. The amount which has been deposited reflects in the form26AS of individual deductees on the TRACES website which is linked to the income tax department’s e-filing website.
TDS only applicable above the threshold level:
TDS on the specified transaction will be deducted only when the value of the payment is above the threshold level. If the value does not cross the specified level, then there is no need of deducting the TDS. Income tax department specify the different threshold levels for different payments such as interest received, salaries etc. For example, if the total interest received on FDs from a single bank is less than Rs.10, 000 in a year from that bank, then there will be no need of TDS.
There are two types of TDS certificates which are issued by the deductor.
- Form-16: The employer who issues incorporating details of tax deduction to the employee throughout the year.
- Form-16A: It is issued in all cases other than the salaries.
Who is liable to submit TDS return?
TDS return need to be furnished by the person who deducts TDS. It is indeed to file the TDS within the specified time. If not, they will be liable to pay the penalty for non-submission of TDS return.
If the persons deduct a TDS regarding the payment, then they are required to file TDS returns quarterly:
- Persons whose accounts audited.
- Government Officers.
Documents required for TDS filing:
- Bank account information.
- PAN card
- TDS certificates (If TDS has been deducted by other).
- You need the original returns details of notice, in order to receive a notice from the income tax department.
- Salary certificate from the employer to the employee and the Form 16.
- Consolidated tax credit statement will be issued to the taxpayer and depicts that the income tax which has been deposited by the government with respect to the taxpayer and the Form 26AS is required to be issued under the income tax act.
- Form 26AS holds all the specific details related to the taxes paid and deposited with the income tax department.
- Interest income: Interest income statement for fixed deposits has to be produced. TDS certificate issued by the bank and others.
- House property: Rent details, property tax. Address of the property and the interest certificate which has been issued by the bank for housing loan, co-owner details if the property is co- owned.
- Capital gains: Sale and purchase deed of the property which includes the stamp valuation of the property for land/building. Stock statement in trading of shares (specifies the sale and purchase value of the shares). Details of expenses which have been incurred while transfer. The investment details in capital gains account scheme.
- Tax saving investments: Tuition fees receipt, Public Provident Fund (PPF) passbook, fixed deposit receipts, Medical insurance receipt, repayment certificate for a housing loan, donation receipts, and deposit receipts for the senior citizen saving scheme.
- Other sources: Bank passbook/statement or any income certificate, receipt of any income from horse races, winning the lottery etc., rent agreement on building, plant and machinery, dividend warrants/amount, PPF passbook for interest.