TDS, TCS, Advance, Self assessment Tax FAQs

Income earned in the twelve months contained in the period from 1st April to 31st March (commonly called Financial Year [FY]) is taken into account for purposes of calculating Income Tax. Under the income tax Act this period is called a previous year.

Taxes are collected by three means: a) voluntary payment by persons into various designated Banks. For example, Advance Tax and Self-Assessment Tax. b) Taxes deducted at source [TDS] on your behalf from the payment receivable by you. c) Taxes collected at source [TCS] on your behalf at the time of spending. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly

TDS means ‘Tax Deducted at Source’. TDS is one of the modes of collection of taxes, by which a certain percentage of amount is deducted by a person at the time of making / crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government Account.

TDS

TDS or Tax Deducted at Source is a mechanism where the payer deducts a certain portion of the payment as tax of the receiver and deposits the same with the government. For example: A provides technical services to B for Rs. 50,000, B is liable to deduct TDS @ 10%, i.e Rs. 5,000 and A receives Rs. 45,000

TCS

TCS or Tax Collected at Source is a mechanism where the receiver extracts a certain amount as tax of the payer and deposits the same with the government For example is selling a Motor Car worth 12 Lakhs, A is liable to collect TCS @ 1% on the sale consideration and deposit the same with Govt.B pays 12.12 Lakhs (12 Lakhs + 1%)

Advance tax refers to paying a part of your taxes before the end of the financial year. Also called ‘pay-as-you-earn’ scheme, advance tax is the income tax payable if your tax liability is more than Rs. 10,000 in a financial year. It should be paid in the year in which the income is received.

For All Taxpayers

If you fail to pay or the amount you’ve paid is less than the mandated 15% of the total liability by the first deadline (15 June), you will need to pay an interest. This is computed @ 1% simple interest per month on the defaulted amount for three months.

The same interest penalty would apply if you failed to pay the second deadline (15 Sep). Failing to pay the third and last deadline (15 Dec and 15 March) would mean paying 1% simple interest on the defaulted amount for every month until the tax is fully paid

If the amount paid as advance tax is higher than the total tax liability, the assesse will receive the excess amount as a refund. Interest @ 6% per annum will be paid by the Income Tax department to the assesse on the excess amount if the amount is more than 10% of tax liability.

If advance tax is not paid or paid less the mandate amount then, interest shall be paid @ 1 per cent simple interest per month on the defaulted amount.

Although tax is deducted at source (TDS), and you're not liable to any more tax to the government, it is compulsory to file returns if your income exceeds the basic exemption limit. Tax returns act as a declaration to the government that you have derived income only from the source revealed by you, and no other. It's like getting a No Objection Certificate (NOC) from the library when you leave college, even if you never stepped into the library, to reveal to the authorities that you have no pending books to return.

It is mandatory to file your income tax return if your income is above the maximum exemption limit. Non-filing of income tax return attracts penalty of Rs 5000 and interest u/s 234A, 234B, and 234C accordingly. Further, if the original return not filed within the due date then an individual cannot file a revise return u/s 139(5) of the IT act. In addition, losses such as business loss, capital loss and loss in owning and maintenance of racehorse cannot be carried forward as per section 80 of the IT act.

No. You are required to have a separate Tax Deduction Account Number (TAN) by making an application in Form 49B with the TIN facilitation centre of NSDL.

Form 26AS, also called as Annual Statement, is a consolidated tax statement which has all tax related information (TDS, TCS, Refund etc.) associated with a PAN. It shows how much of your tax has been received by the government and is consolidated from multiple sources like your salary / pension / interest income etc. This form contains the annual tax statement under Section 203AA and Rule 31AB. This article explains Form 26AS in detail with images.

1. Form 26AS is generated annually, for a Financial Year.
2. Form 26AS will be generated whenever tax related transaction (TDS deducted, Advance tax paid) happens in relation to the taxpayer. It is a live document which is updated as the transactions are reported / processed for the given FY.
3. Only a registered PAN holder can view their Form 26AS on TRACES. You can view your Form 26AS in TRACES from AY 2009-10 onwards or from FY 2008-09 onwards
4. The address reflecting in Annual Tax Statement (Form 26AS) is picked up from Income Tax Department’s PAN database with the details of latest PAN card issued to you
5. The password for opening Form 26AS will be your Date of Birth (in DDMMYYYY format), e.g., if your date of birth is 01-Feb-1980, password will be 01021980.

PART I

Details of Tax Deducted at Source (All amount values are in Rs.)This section will show the TDS deducted from your salary / pension income and also TDS deducted by banks on your interest income. TDS deducted by each source is shown as a separate table

PART II

Details of Tax Deducted at Source for 15G / 15H: This section will show transaction in those financial institutions such as banks where the individual has submitted Form 15G / 15H. TDS in these cases would be zero (because you have submitted 15G/15H). This section enables you to keep a track of all the interest gain which has not been taxed.

PART III

Details of Transactions under Proviso to section 194B/First Proviso to sub-section (1) of section 194R/ Proviso to sub-section(1) of section 194S/Sub-section (2) of section 194BA

PART IV

Details of Tax Deducted at Source u/s 194IA/ 194IB / 194M/ 194S (For Seller/Landlord of Property/Contractors or Professionals/ Seller of Virtual Digital Asset)

PART V

Details of Transactions under Proviso to sub-section(1) of section 194S as per Form-26QE (For Seller of Virtual Digital Asset)

PART VI

Details of Tax Collected at Source: Tax Collected at Source (TCS) is collected by the seller from the buyer at the time of sale of specified category of goods (such as Alcoholic liquor for human consumption, Scrap, Parking lot, Toll plaza). The TCS Rate vary for each category of goods and the TCS is to be deposited with the govt. SimpleTaxIndia’s India Tax collection at source and tcs provisions discusses it in detail.

PART VII

Details of Paid Refund (For which source is CPC-TDS. For other details refer AIS at E-Filing Portal)

PART VIII

Details of Tax Deducted at Source u/s 194IA/ 194IB /194M/194S (For Buyer/Tenant of Property /Person making payment to contractors or Professionals / Buyer of Virtual Digital Asset).