TDS filing: Dos and Don'ts

Posted In | Finance | Accounting Software | India Accounting Tax

Tax Deducted at Source (TDS) is an indirect method of collecting income tax by the Indian government as per the Income Tax Act, 1961. It is deducted at the origin of the income. TDS filing is the process of submitting the TDS returns to the Income Tax department. This article will guide you on the dos and don’ts for successful TDS filing.
 

Do’s of TDS filing
 

• Ensure Timely Payment: The deducted TDS should be deposited to the government within the stipulated time period. Delay in the payment can attract interest and penalties.
   
• Correct Details: Always provide accurate details such as PAN of the deductee, amount of TDS deducted, type of payment, etc. Mistakes can lead to mismatch in Form 26AS of the deductee and can cause unnecessary issues.
   
• File on Time: Late filing of TDS returns can also attract penalties. Hence, it’s essential to file the returns within the prescribed due dates.
   
• Verify Information: Cross-check all the information in the TDS return before filing to avoid any discrepancies.
   
• Use Correct Form: Different forms are provided for different categories of deductors. Ensure you select the correct form while filing your TDS return.
   

Don’ts of TDS filing
 

• Don't Ignore TDS filing: Ignoring TDS filing can lead to hefty penalties and prosecution under the Income Tax Act. Hence, it’s crucial to file TDS returns regularly.
   
• Don't Provide Inaccurate Information: Providing incorrect information in your TDS return can result in mismatch and complications.
   
• Don't Delay in Filing: Delay in filing the TDS return can attract late filing fees and interest. Therefore, it’s important to file the return within the stipulated time period.
   
• Don't Forget to Validate Returns: After filing the TDS return, it’s important to validate it using the File Validation Utility (FVU) provided by NSDL.
   

Understanding the dos and don'ts of TDS filing can help you avoid penalties and ensure compliance with the Income Tax Act. It's always advisable to stay updated with the latest rules and regulations related to TDS filing to avoid any legal complications.