TDS Return & Compliance

Payroll processing and follow Labour Law is a highly complex task for most businesses due to the various compliance requirements in India. We take care of payroll and all statutory compliance like PT, PF and ESIC Return Filing and maintaining statutory Registers and Records.

TDS And TCS Return Filings

TCS and TDS are two of the most commonly used words when we talk about taxation. In the field of tax, TDS stands for Tax Deducted at Source while TCS stands for Tax Collected at Source. When they sound almost identical, you must be wondering how they actually differ. Also, when the Government works on a self-assessment model of tax, why do TDS and TCS come into play?

In this content, we have tried putting light on some of the important aspects of TDS and TCS. So, let us walk through the same to answer the above questions.

TDS

For a speedy and efficient collection of taxes, the Income Tax Law has integrated a system of deduction of tax at the time of generation of income. This system is known as “Tax Deducted at Source”, generally called TDS. Under this mechanism, tax is deducted at the point of origination of income. The payer deducts tax, and the same is directly remitted to the Government by the payer on behalf of the payee. The concept of TDS was introduced to combat and reduce tax evasion.
 

TCS
The tax collected at the source, abbreviated as TCS, is another means of collecting tax at the very source of income by the Government. Under the TCS provisions, certain specified transactions require the seller to collect an additional amount as tax at the time of sale over and above the sale price and remit the same to the Central Government.

As per the TCS provisions of the Income Tax Act 1961, certain persons, being the sellers, must collect a specified percentage of tax at the time of debiting the amount payable by the purchaser to the account of the purchaser or at the time of receipt of the amount from the purchaser, whichever is earlier.
 

Types of TDS/TCS Return Forms
 

The tax deductor and tax collector are liable to deduct/collect tax, pay challan and file the TDS/TCS returns. There are various types of TCS and TDS Return Forms applicable for different scenarios based on the type of the transaction and the parties involved in such transaction. Below is the list of different types of TDS and TCS return filing forms:
 

Type of TDS&TCS Return FormMeaning

  • Form 24Q - Statement of deduction of tax at source from salary under section 192.

  • Form 26Q - Statement of deduction of tax at source on all payments other than salaries.

  • Form 27Q  - Statement of deduction of tax on payment of interest, dividends, or any other sum payable to non-residents.

  • Form 26QB - Challan-cum-statement in case tax has been deducted under section 194-IA. In this case, no statement shall be filed separately.

  • Form 26QC - Challan-cum-statement in case tax has been deducted under section 194-IB. In this case, no statement shall be filed separately.

  • Form 26QD - Challan-cum-statement in case tax has been deducted under section 194-M. In this case, no statement shall be filed separately.

  • Form 27EQ -  Statement of collection of tax at source to be filed quarterly with the Government.

  • Form 27D -  Statement of collection of tax at source issued to the buyer by the tax collector to the effect that tax has been collected.

 

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