TDS Compliance

Introduction

At Promunim, we understand the importance of TDS (Tax Deducted at Source) return compliance for businesses and individuals. Our TDS return compliance service is designed to streamline the process of filing TDS returns with the Income Tax Department, ensuring accuracy, timeliness, and adherence to regulatory requirements. Our comprehensive TDS return compliance service covers every aspect of the compliance process, from data collection to filing returns, allowing our clients to focus on their core business activities while we take care of their tax obligations.

Advantages of tax Deduct at Source (TDS) returns:

• TEnsures Timely Tax Collection:TDS ensures that taxes are deducted at the time of payment itself, ensuring timely collection of taxes by the government.
• Regular Cash Inflow for Government:TDS provides a steady stream of revenue for the government throughout the year, helping in the efficient management of public finances.
• Reduces Tax Evasion:TDS helps in curbing tax evasion by ensuring that taxes are deducted at the source before the income is received by the taxpayer.
• Simplifies Tax Compliance:TDS return filing simplifies tax compliance for both taxpayers and the government by providing a systematic and transparent mechanism for tax deduction and reporting.
• Facilitates Compliance Monitoring:TDS returns enable the government to monitor tax compliance effectively by providing details of TDS transactions, including deductors, deductees, and TDS amounts.
• Provides Transparency and Accountability:TDS returns promote transparency and accountability in tax collection by providing a clear record of tax deductions made by deductors and ensuring that taxes are remitted to the government.
• Contributes to Taxpayer Convenience:TDS reduces the burden of tax payment on taxpayers by spreading the tax liability over the income year, making it more manageable and convenient for taxpayers.
• Encourages Voluntary Compliance:TDS serves as a reminder for taxpayers to comply with their tax obligations, encouraging voluntary compliance with tax laws and regulations.

Types of TDS Deduction:

TDS (Tax Deducted at Source) is deducted from various types of payments made by taxpayers as per the Income Tax Act, 1961. Here are some common types of TDS:

• Salary TDS (Section 192):TDS is deducted by employers from salaries paid to employees based on their income tax slab rates.
• Interest TDS (Section 194A):TDS is deducted on interest payments exceeding specified thresholds made by banks, financial institutions, or individuals.
• Contractor and Professional TDS (Section 194C & Section 194J):TDS is deducted on payments made to contractors, sub-contractors, or professionals for services rendered.
• Rent TDS (Section 194I):TDS is deducted on rental payments exceeding specified thresholds made for the use of land, building, or machinery.
• Commission TDS (Section 194H):TDS is deducted on commission payments exceeding specified thresholds made for brokerage or agency services.
• Payment to Non-resident TDS (Section 195):TDS is deducted on payments made to non-residents for various types of income such as interest, royalties, or fees for technical services.
• Insurance Commission TDS (Section 194D):TDS is deducted on commission payments made to insurance agents or brokers exceeding specified thresholds.
• Sale of Property TDS (Section 194IA & Section 194IB):TDS is deducted on payments made for the sale of immovable property exceeding specified thresholds.

Process for filing TDS returns using the service provided by Promunim:

• Data Collection:Once registered, you'll need to provide Promunim with data related to TDS transactions conducted during the reporting period. This includes details of deductors, deductees, TDS amounts, and other relevant information.
• Data Verification:Promunim verifies the accuracy of the data provided to ensure compliance with TDS regulations. Any discrepancies or missing information will be communicated to you for correction.
• TDS Calculation and Reporting:Based on the verified data, our professionals calculates the TDS liabilities, prepares TDS return forms such as Form 24Q, Form 26Q, Form 27Q, or Form 27EQ, and generates comprehensive TDS reports for filing.
• Challan Generation and Payment:Compliance team generates TDS challans for the payment of TDS liabilities and facilitates the online payment process, ensuring compliance with payment deadlines.
• Return Preparation and Filing:our dedicated team prepares TDS return forms electronically as per the requirements of the Income Tax Department and files them on your behalf through the designated online portal.
• Acknowledgment and Confirmation:Upon successful submission of TDS returns, Promunim obtains acknowledgment from the Income Tax Department and provides confirmation of the filing process being completed.
• Compliance Monitoring and Updates:Compliance team monitors changes in TDS regulations and provides timely updates to ensure on-going compliance with regulatory requirements and deadlines.
• Support and Assistance:Throughout the process, ProMunim's team of experts is available to provide support and assistance, addressing any queries or concerns you may have regarding TDS return filing compliance.

Consequences:

• Penalties:The Income Tax Department may impose penalties for non-filing of TDS returns. The penalties can vary depending on factors such as the duration of non-compliance, the amount of tax deducted, and the type of TDS return.
• Interest Charges:In addition to penalties, the Income Tax Department may levy interest charges on the outstanding TDS liabilities for the period of non-compliance. The interest rates can be significant and can add up over time.
• Legal Action:Continued non-filing of TDS returns may result in legal action by the Income Tax Department. This can include legal notices, summonses, and even prosecution in severe cases of non-compliance.
• Disallowance of Expenses:The Income Tax Department may disallow expenses claimed by the taxpayer if TDS returns related to those expenses are not filed. This can result in higher taxable income and increased tax liability for the taxpayer.
• Reputation Damage:Non-filing of TDS returns can damage the reputation and credibility of the taxpayer. It may lead to negative perceptions among stakeholders, including business partners, creditors, and investors.
• Business Disruption:Legal proceedings and penalties resulting from non-filing of TDS returns can disrupt business operations and divert resources away from core activities. This can impact productivity, profitability, and overall business performance.
• Loss of Benefits:Taxpayers may lose certain benefits or privileges, such as timely tax refunds or eligibility for government contracts, if they fail to comply with TDS return filing obligations.
• Increased Scrutiny:Non-filing of TDS returns may attract increased scrutiny from tax authorities, leading to audits and investigations into other areas of tax compliance.

Frequently Asked Questions