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STATUTORY BACKGROUND:
Finance Act, 2003 amended section 206 of Income Tax Act, 1961 to make it mandatory for
corporate deductors to furnish their TDS returns in electronic form (e-TDS returns). The
scheme for furnishing TDS return in electronic form was notified by the Central Board of
Direct Taxes (CBDT) vide Notification No. 205/2003 dated August 26, 2003.
Finance Act, 2004, further amended section 206 of the Income Tax Act, 1961, making it
mandatory for government deductors also to furnish e-TDS returns from F.Y. 2004-05. E-TDS
returns are to be prepared in accordance with the data structure (file format) specified by
Income Tax Department (ITD).
Income Tax Department vide its notification no. 238/2007 dated August, 2007amended Rules
31A of the Income Tax Rules, 1962 to provide mandatoryelectronic filing of TDS return in
respect of following cases :
1. Deductors required to get accounts audited u.s. 44AB in the immediately preceding
financial year.
2. Deductors having number of deductee records in a quarterly return for any quarter of the
immediately preceding financial year more than or equal to 50.
FORMS & PERIODICITY
Following are returns for TDS and TCS which are to be filed quarterly.
CBDT has designated Director General of Income Tax (Systems) as e-filing administrator for
the purpose of administration of scheme of E-filing of TDS. CBDT has authorised National
Security Depository Ltd. (NSDL) to be e-TDS Intermediary. NSDL has established TIN
Facilitation Centres (TIN-FCs) across the country to facilitate deductors furnish their e-TDS
returns.
PREPARATION OF E TDS RETURN
e-TDS return has to be prepared in accordance with the file format prescribed by the Income
Tax Department. NSDL has provided free downloadable utilityat http://tin.nsdl.com for the
purpose of preparation of e-TDS return. Alternatively, various softwares are available for
preparation of TDS returns.
Following points should be noted while preparing E-TDS return :
1. Payment of TDS / TCS in Bank and Verification thereof
(i)
(ii)
(iii)
(Separate challans should be used to deposit tax deducted under different sections.
Correct code for nature of payment should be indicated in the relevant column in
the challan. (For example, 94C for payment to contractors and sub-contractors, 94I
(iv)
for rent).
Separate challans should be used to deposit tax deducted for different types of
(v)
(vi)
branch will give a counter foil as acknowledgement for the taxes paid. Ensure that
the bank has mentioned the Challan Identification Number (CIN) on the counter
foil. CIN has three parts : 7 digit BSR code of the bank branch where tax is
(vii)
PANINVALID - where deductee has provided PAN but it is structurally invalid. The
Deductee PAN field should contain a structurally valid PAN or PANAPPLIED or
PANNOTAVBL or PANINVALID only. If any other value is mentioned in this field
then the FVU will give an error during validation of the TDS return.
4. Deductee Type (Company/Non Company):
Deductee Type should be properly indicated.
5. Payment by Book Entry or Otherwise
If tax is deducted on the basis of provision made on the last day of the accounting year
then the option Paid by Book Entry has to be selected. This is necessary to ascertain the
correct due date of payment for such tax deduction.
6. Rate of TDS & Reason Code for non deduction or lower deduction:
The rate of tds should be correctly mentioned in the e-TDS return. If lower deduction / no
deduction is on account of a certificate under section 197, then this should be indicated by
writing A in the appropriate column. If lower deduction / no deduction is on account of
declaration under section 197A, then this should be indicated by writing B in the
appropriate column.
VALIDATION OF E TDS RETURN
File Validation Utility (FVU) has been developed by NSDL to help deductors ensure that the
e-TDS returns prepared by them conform to the prescribed file format. After preparing e-TDS
return in accordance with the file formats notified by ITD, a text file is generated with txt as
filename extension. This *.txt file should be validated using the latest FVU to ascertain
whether the return contains any format level error(s). In case the errors are found, these errors
should be rectified and the file should be validated once again. This procedure should be
repeated till an error free return is prepared. It should be noted that the FVU validates only the
format level accuracy of the e-TDS return.
After successful validation of input file, three files are generated: TDS Statement Statistics
Report, PAN statistics report and upload file. Eg. In caseof valid file for Form 26Q, the FVU
will generate three files as follows
ii)
iii)
physical form.
Each return is in one CD/floppy. It should not span across multiple floppies.
Return should be compressed, if required, only by using Winzip 8.1 or ZipItFast 3.0 (or
iv)
higher version) compression utility to ensure quick and smooth acceptance of the file.
Label mentioning TAN, name of deductor/collector, period to which return pertains
(quarter and F.Y.) and Form no. (24Q, 26Q, 27Q or 27EQ) is affixed on each
v)
vi)
TAN details (name, address, etc.,) of the deductor as provided in the quarterly e-TDS
return should be same as in the TAN database maintained by ITD (these details can be
verified on web-site www.incometaxindia.gov.in). If they are different, the deductor
will have to submit a TAN change request application to update the ITD TAN database
vii)
viii)
ix)
In case any of these requirements are not met, the e-TDS return will not beaccepted at TINFCs or NSDL website. In that case, Non Acceptance Memowill be issued by the TIN-FC.
ACCEPTANCE OF E-TDS RETURN
After deductor furnishes the e-TDS return to TIN-FC in the prescribed manner, TIN-FC will
carry out format level validations (these validations aresame as performed by latest FVU) and
other checks to validate the e-TDS return. In case e-TDS return is valid, TIN-FC will accept
the return and issue a Provisional Receipt to the deductor. The Provisional Receipt issued by
TIN-FC to deductor is deemed to be the proof of e-TDS returns furnished by the deductor.
Deductor will have to pay upload fees by demand draft or cash to the TIN-FC for every
accepted e-TDS return. Following are the charges for furnishing e-TDS return :
with the ITD through TIN FC. If the tds return is required to be revised at a later date, *.fvu
file is required for making the necessary corrections.
Status Verification Of E-Tds Return Furnished To Tin
This enquiry can be made by going to TAX PAYERS VIEW on website of NSDL.
Enter TAN and Provisional Receipt Number (PRN) of the return for which the status needs to
be verified.
These views are available only for e-TDS/TCS return for F.Y. 2005-06 and onwards.
You can verify the information without any other authentication. In this case no financial
information will be displayed.
Following enquiries can be made at this site.
o
o
o
o
Whether quarterly returns have been uploaded to TIN central system by TIN-FC.
Whether quarterly returns have been accepted by TIN central system.
Whether challans in returns have been matched with challans uploaded by banks.
Number of deductees whose PAN accounts have been booked. v. Line no. of
Deductors can file a return containing deductee records which meets the specified
threshold limit of PAN quoting, i.e., a deductor can file a return containing deductee
details who have provided valid PAN. It can subsequently file a correction return with
details of remaining deductees. E.g. as below:
Suppose a challan payment of Rs.1,00,000/- has been made for non-salary TDS against
100 deductees each with TDS of Rs.1,000/-. Under the existing procedure the deductor
will have to quote at least 85 PAN, failing which his return will be rejected.
If there are only 50 deductees whose PAN is available and the deductor attempts to file
a return with details of 100 deductees with PAN of only 50 deductees, the return will
automatically be rejected at present.
However, if he files a return with challan amount of Rs. 1,00,000/- and with details of
50 deductees with PAN, with deductee total of Rs.50,000/-, the return will be accepted.
It means the deductor can furnish the details relating to such deductees whose PANs
are available.
The deductor can later file correction returns with other details of remaining deductees
with the same challan details, i.e., the challan amount should be the amount deposited
(in this case Rs. 1,00,000/-).
The return will be accepted so long as the TDS total of incremental deducteesis less
than or equal to the balance of Rs.50,000/-.
Generation of Text File and Validation of the same
The procedure of generation and validation of text file for Correction Statement is similar to
that of original return
Submission of Correction Statement The CD / floppy containing correction statement
should be accompanied with the following documents:
1. Statement Statistics Report generated by FVU. In case of multiple batch correction
statement, a separate Statistics Report for each kind of batch within the multiple batch
correction statement will be generated by the FVU. In such cases, deductor shall submit all
Statistics Reports.
2. Form No. 27A
References : For complete information on E Filing of TDS returns , please refer to the
following documents available at http://tin.nsdl.com/ at Downloads e TDS Quarterly
Statements Regular / Correction 1. Deductors Manual for Quarterly e-TDS /TCS
Statements. 2. Deductors Manual for Quarterly e-TDS /TCS Correction Statements.