(TDS) Tax Return Filing in Bangalore

TDS, or Tax Deducted at Source, is a method designed by the government to collect tax at the source of an individual's income. It helps prevent tax evasion by ensuring that tax is collected when income is generated, either partly or fully. TDS applies to various sources of income like interest, salaries, and commissions, but not to all transactions or individuals.

Different rates for TDS are set by the income tax act, varying for different payment categories and recipients. The concept is simple: the person making specified payments deducts the tax at the source as per the income tax act and deposits it into the government's account. This individual is known as the deductor. The recipient who gets the payment after tax deduction is called the deductee. The deductor is responsible for deducting and depositing the tax amount with the government. TDS ensures tax collection at the origin of income, reducing chances of tax evasion.

How TDS works?

The party making a payment subject to TDS deducts a specific tax percentage from the amount paid and gives the remaining balance to the recipient. The recipient receives a certificate indicating the TDS amount withheld by the deductor. This withheld tax amount can be claimed by the recipient as a tax payment.

It's the deductor's responsibility to deposit the TDS with the government. The deposited amount appears in the form26AS of individual deductees on the TRACES website, linked to the income tax department’s e-filing site. This allows individuals to view their deposited tax amounts.

TDS only applicable above the threshold level:

TDS is only deducted on particular transactions when the payment value surpasses a certain threshold. If the value doesn't cross this set level, TDS isn't required. The income tax department defines different threshold levels for various payments like interest or salaries. For instance, if the total interest earned from Fixed Deposits (FDs) in a year from a single bank is below Rs. 10,000, no TDS is needed.

TDS certificates:

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?

The individual responsible for deducting TDS must file a TDS return. It's crucial to file it within the specified timeframe to avoid penalties for non-submission.

Those deducting TDS on payments need to file quarterly TDS returns if they fall into these categories:

  • Persons whose accounts audited.
  • Government Officers.
  • Company.

Documents required for TDS filing:

Essential documents for income tax return 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.

  • For taxpayers, required documents for IT return filing include:

  • Consolidated tax credit statement showing government-deposited income tax (Form 26AS) is necessary for online income tax return filing.
  • Details of taxes paid and deposited.
  • Interest income: Statement for fixed deposit interest and TDS certificates from banks.
  • House property: Rent details, property tax, property address, bank-issued interest certificate for housing loans, co-owner details (if applicable).
  • Capital gains: Property sale and purchase deeds, stock statements for shares, transfer-related expenses, and capital gains account scheme investments.
  • Tax saving investments: Receipts for tuition fees, PPF passbook, fixed deposit receipts, medical insurance receipts, housing loan repayment certificate, donation receipts, senior citizen saving scheme receipts.
  • Other sources: Bank statements, income certificates, receipts from sources like horse races or lottery winnings, rent agreements, dividend amounts, and PPF passbook for interest.