What is tax deducted at source?

For a quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called as “Tax Deducted at Source”, commonly known as TDS. Under this system, the tax is deducted at the origin of the income. Tax is deducted by the payer and is remitted to the Government by the payer on behalf of the payee.
The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. In respect of payments to which the TDS provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him to the credit of the Government.

What is quarterly eTDS/eTCS Statement?

TDS/TCS returns filed in electronic form as per section 200(3)/206C, as amended by Finance Act, 2005, are quarterly TDS/TCS statements.

As per the Income Tax Act, these quarterly statements are required to be furnished from FY 2005-06 onwards. However, as advised by Income Tax Department, acceptance of e-TDS/TCS statements pertaining to Financial Years prior to 2007-08 has been discontinued at the TIN.

The forms used for quarterly e-TDS statements Forms are 24Q, 26Q and 27Q and for quarterly e-TCS statement is Form No. 27EQ. These statements filed in CD/Pen Drive should be accompanied by a signed verification in Form No. 27A in case of both, e-TDS/TCS statements.

What is TIN?

Tax Information Network (TIN) is an initiative by Income Tax Department of India (ITD) for the modernization of the current system for collection, processing, monitoring, and accounting of direct taxes using information technology. TIN is a repository of nationwide Tax related information and has been established by NSDL e-Governance Infrastructure Limited on behalf of ITD.

To know more about TIN visit https://www.tin-nsdl.com

Who is required to file eTDS/TCS statements?

As per Income Tax Act, 1961, all corporate and government deductors/collectors are compulsorily required to file their TDS/TCS statements in electronic form i.e. e-TDS/TCS returns. However, deductors/collectors other than corporate/government can file either in physical or in electronic form.

What are the duties of the person deducting tax at source?

Following are the basic duties of the person who is liable to deduct tax at source.
  • He shall obtain Tax Deduction Account Number and quote the same in all the documents pertaining to TDS.
  • He shall deduct the tax at source at the applicable rate.
  • He shall pay the tax deducted by him at the source to the credit of the Government (by the due date specified in this regard).
  • He shall file the periodic TDS statements, i.e., TDS return (by the due date specified in this regard).
  • He shall issue the TDS certificate to the payee in respect of tax deducted by him (by the due date specified in this regard).

Under what provision should e-TDS/TCS statement be filed?

An e-TDS statement should be filed under Section 206 of the Income Tax Act in accordance with the scheme dated August 26, 2003, for electronic filing of TDS statement notified by the Central Board of Direct Taxes (CBDT) for this purpose. CBDT Circular No. 8 dated September 19, 2003, may also be referred.

An e-TCS statement should be filed under Section 206C of the Income Tax Act in accordance with the scheme dated March 30, 2005, for electronic filing of TCS return notified by the CBDT for this purpose.

As per section 200(3)/206C, as amended by Finance Act 2005, deductors/collectors are required to file quarterly TDS/TCS statements from FY 2005-06 onwards.

Is PAN mandatory for deductors and employees/deductees?

PAN of the deductors has to be given by non-Government deductors. It is essential to quote PAN of all deductees.

Who is the e-Filing Administrator?

CBDT has appointed the Director General of Income Tax (Systems) as e-Filing Administrator for the purpose of electronic filing of TDS/TCS statement.

What is Form No. 27A?

Form No. 27A is a control chart of quarterly e-TDS/TCS statements to be filed in paper form by deductors/collectors along with quarterly statements. It is a summary of e-TDS/TCS returns which contains control totals of ‘amount paid’ and ‘income tax deducted at source’. The control totals of ‘amount paid’ and ‘income tax deducted at source’ mentioned on Form No. 27A should match with the corresponding control totals in e-TDS/TCS return. A separate Form No. 27A is to be filed for each e-TDS/TCS return.

Who is an e-TDS/TCS Intermediary?

CBDT has appointed NSDL e-Governance Infrastructure Limited, (NSDL e-Gov), Mumbai, as e-TDS/TCS Intermediary. NSDL e-Gov has established TIN Facilitation Centres (TIN-FCs) across the country to facilitate deductors/collectors file their e-TDS/TCS statement.

What is e-Return/electronic Format?

e-Return is a process where the data which was submitted through paper returns in the earlier procedure, is converted to a specified (by NSDL) Text format in the 1st Level (Deductor/Collector) itself. This data is directly (www.tin-nsdl.com) or Indirectly (TIN Facilitation Centers) Uploaded to NSDL.

What is File Validation Utility (FVU)?

FVU is a utility provided by NSDL to verify the e-Return (Text file) generated by the deductor, with the format prescribed. FVU takes an Input file and generates a report and *.FVU File.

What are errors?

FVU checks the text file with the format prescribed by NSDL. The deficiencies found in the file are known as errors. This may be due to invalid data provided or dates/amounts out of limits, etc

What FVU does if any errors found in the file?

If any errors found, *.FVU file will not be generated and report file contains the list of errors in the text file.

What FVU does if there are no errors in the file?

If File Validation is successful, FVU generates a report file with the statistics of the return and a *.FVU file with text file converted to a compatible format (With the addition of few more details) for the software in TIN FC (SAM [ Statement Acceptance Module].

What are Form 24, 26, 27 and 27E?

These forms are the respective formats prescribed by IT department for TDS/TCS returns. Form 24 is prescribed for Return of TDS details on Salary Payments, Form 26 for Return of TDS details on Other than Salary Payments (Domestic), Form 27 is also for Return of TDS details on Other than Salary Payments (NRI/Foreign) and Form 27E is for TCS returns.

What data is to be entered in Form 24Q of salaries as it is a quarterly return? Do we require to specify the quarterly amounts of investments, incomes, etc?

As per the clarification by NSDL/IT department, Form 24Q can contain only Deduction and challan details for 1st, 2nd and 3rd quarters. [I.e.: the Only amount of payment as per Payslip, TDS deducted with respective rates and the challan remittance details].
But Last quarter should compulsorily contain the annual amounts of Investments, Contributions, etc under Chapter VI A, Details of Salary, Perquisites and Any other incomes reported and his net tax liability. Last quarter should also contain the Deduction and challan details of the respective quarter.

What about the Salary Details, in case the employee has left the employment before 4th quarter?

Where an employee has worked with a deductor for part of the financial year only, the deductor should deduct TDS from his salary and report the same in the quarterly Form 24Q of the respective quarter(s) up to the date of employment with him.

Further, while submitting Form 24Q for the last quarter, the deductor should include particulars of that employee in Annexure II & III irrespective of the fact that the employee was not under his employment on the last day of the year.

Note that in this case Deductions and Challan amount may not be there for that employee in last quarter.

Can deductor file Form 26Q separately for contractors, professionals, interest etc.?

No. A single Form 26Q with separate annexure for each type of payment has to be filed for all payments made to residents. E-Return should comprise a single file with all the details of Form26Q.

What is Form 26AS?

The annual statement will be issued for all tax deducted and tax collected at source from F.Y 2005-06 onwards after the expiry of the financial year u/s 203AA. This statement is known as Form 26AS.

According to this, the PAN wise ledger account will be created after matching the information in the TDS/TCS returns filed by the deductor/ collector and the details of tax deposited in banks coming through OLTAS.

This further depends on accuracy in e-Return [TAN, PAN, challan number, etc] by the deductor.

What to do if the TDS credit is not reflected in Form 26AS?

​​​Non-reflection of TDS credit in Form 26AS can be due to several reasons like non-filing of TDS statement by the payer, quoting incorrect PAN of the deductee in the TDS statement filed by the payer. Thus, in case of non-reflection of TDS credit in Form 26AS, the payee has to contact the payer for ascertaining the correct reasons for non-reflection of the TDS credit in Form 26AS.​

What if a return doesn't contain deductee PAN?

In case PANs of some of the deductees are not mentioned in the e-TDS return, the Provisional Receipt will mention the count of missing PANs in the e-TDS return. eTDS return will be accepted even with missing PANs.

However, if PAN of deductees is not given in the TDS return, tax deducted from the payment made to him cannot be credited to his account i.e. Form 26AS.

What about the challan details entry for government deductors, as they remit the deductions with Book Adjustments/Book Entries/Treasury?

In such cases ITD allows the Deductors to mark Transfer voucher details in place of Challan details. The other fields Cheque details and Bank Code is optional in this case.

Which File is to be submitted for eTDS/TCS returns?

After Validation of the File, the *.FVU file is to be copied to a CD/Pen Drive and should be enclosed with a covering Letter (Form 27A) duly signed by the responsible person. Both together should be submitted to the TIN FC. TIN FC will upload the *.FVU file through SAM and generate an acknowledgment receipt on the Form 27A furnished.

What is form 26QA?

Section 206A of IT Act (Amended) mandates that any banking company or co-operative society or public company responsible for paying to residents any income by way of interest not exceeding five thousand rupees without deduction of tax shall file quarterly returns.
The Central Board of Direct Taxes has notified that the return in such cases shall be furnished in Form No. 206QA. The Form shall be furnished on or before the 31st July, the 31st October, the 31st January and the 30th June following the respective quarter of the financial year.

Where can the user get the detailed FAQs regarding eTDS from Income Tax department?

The user can avail the detailed FAQs from the link FAQ ON TDS – ITD

What is the difference between PAN and TAN?

PAN stands for Permanent Account Number and TAN stands for Tax Deduction Account Number.
TAN is to be obtained by the person responsible to deduct tax, i.e., the deductor. In all the documents relating to TDS and all the correspondence with the Income-tax Department relating to TDS, one has to quote his TAN.
PAN cannot be used for TAN, hence, the deductor has to obtain TAN, even if he holds PAN.
However, in case of TDS on purchase of land and building (as per section 194- IA), the deductor is not required to obtain TAN and can use PAN for remitting the TDS

Why Java Runtime Environment [JRE] is required in Saral TDS?

Basically, Saral TDS generates the text file as per the format prescribed. This text file is to be further checked by NSDL File Validation Utility for generation of *.FVU file.

As it is recommended to verify the Text file output of Saral TDS with the FVU provided by NSDL, Saral TDS is inbuilt with NSDL FVU. The FVU for 2005-06 (Quarterly Returns) is built in Java and the program requires JRE to be present in the User computer. So Saral TDS comes bundled with JRE and requires it to be installed for the purpose of validation.

What is Challan and deduction link?

All the Deductions made by a deductor should be shown with the respective Challan details. The process of linking the deductions entered in Deduction details to the challans entered in Challan details is called Challan and Deduction Link.

Why Challan and deduction link is required?

Prior to 2004-05 Financial Year, it was required only for the purpose of TDS/TCS certificate generation, where the linking was reflected. But 2005-06 Financial Year onwards (Quarterly Returns) the linking is also to be shown in the Quarterly TDS/TCS returns. Each and every deduction should contain a challan linked with it.

What is Part Payment?

If a single deduction is remitted to the bank with multiple challans (More than One challan), then such remittance is called as part payments.

What about the challan and Deduction Link in case of Part Payment?

In case of Part Payments, Deductions should be proportionally split up with respect to the payments made and shown on the return. This process is also internally taken care in SaralTDS.

E.g.: If a deduction of 1500/- is paid through two individual challans of 1000/- and 500/-, then the return should contain 2 individual deductions of 1000/- and 500/- with the same Date and Proportionate Amount of Payment. These deductions should also be linked with respective challan amounts.

What are TDS/TCS certificates?

As the details of TDS/TCS will be submitted to the department directly by the deductor, he should provide a certificate of deduction/collection to the Employee/Deductee/Colectee, which is required to be enclosed as proof of TDS/TCS made with his Annual Income Tax return.

Form 16 is prescribed for TDS certificate of TDS on Salary Payments (Form 24). Form 16A for TDS on other than Salary Payments (Form 26 and 27) and Form 27D as the TCS Certificate for TCS collection (Form 27E)

What is the position for an assessee who has not made any payment at all?

If there are no payments done under that particular form, it is not compulsory for the deductor to file eTDS returns for that form, unless intimated by IT Department.

What about Challan and deduction Link for Zero Deduction?

Zero Deduction should be linked to a paid challan in the Output file. The user can link any challan in Saral TDS for a Zero deduction.

How to transfer previous year master details to present year?

In the File Menu-> Create New from Existing, the user can select the last year file, specify a new name for the present year and say create. This process creates a new file for the present year in the Data directory with all the master details.

How to convert Professional version data to corporate version?

If the .RST [Professional version Data] file is available, the user can go to Start-> Programs-> Relyonsoft-> Conversion option where the user can select the RST file and create the RCS [Corporate version Data] file in the data directory specified.The conversion Utility can also be found in the installation path of the software by name Conversion05.exe.

What are Option settings in SaralTDS?

Option Settings is a preference utility provided for the user to set his preferences, such as Enabling/Disabling of TCS (Form 27E), Reference numbers, Rounding Off deductions, Default Quarters, etc.

What is Auto linking option?

This option Automatically makes the process of Challan and Deduction Link for the Challans and deductions which are not linked. This is dependent on the Dates and Amounts of Deductions and Challans. The Accuracy is observed to be more than 90% compared to Manual Linking.

Why clear special characters?

This option helps in clearing the Unprintable Characters (Defined in ASCII) from the Database. Note that, this option doesn’t clear the All the Symbols (E.g.: &, #, dot, double space, etc) present in the Data. In case of Employee name FVU doesn’t even accept Dot and Double Space in between. This should be either replaced/removed in the database or with CLREMP.EXE.

What is the Extension of Saral TDS Data file?

Saral TDS professional data file is followed by Extension RST [Relyon Saral TDS]
Saral TDS Corporate/Institutional data file is followed by Extension RCS [Relyon Corporate SaralTDS]

What about Form 26QA in SaralTDS?

Currently, the e-Format of Form 26QA is not yet notified by CBDT. As soon as NSDL provides the structure for e-returns of Form 26QA, the same will be included in SaralTDS.

Why FVU reports error as Invalid PAN, even though PAN is provided? OR What is Valid PAN Format checked by FVU?

Following are the points verified by FVU while checking PAN:

  • Length should be 10 Characters
  • The format should be 5 Alpha, 4 Numeric and 1 Alpha. E.g.: ABVPS1234A
  • The Fourth Character of the PAN allowed is P, H, C, J, F, A, T, B, L or G. Any other at the 4th character is invalid.
  • One more point that is unchecked by FVU is the Fifth character, which will be the First letter of the Assessee Surname or Company Name

Why FVU reports error as Invalid TAN, even though TAN is provided? OR What is Valid TAN Format checked by FVU?

Following are the points verified by FVU while checking TAN:

  • Length should be 10 Characters
  • The format should be 4 Alpha, 5 Numeric and 1 Alpha. E.g.: BLRS01234A
  • If the Mod-7 value of 5 numeric values is 0, 1, 2, 3, 4, 5 or 6, then Last (10th) character should be A, B, C, D, E, F or G, respectively.

I.e.: After dividing the number present in TAN by 7, it is checking the remainder value to be the specified combinations. [Eg: TVDS01113A, Here 01113/7 => reminder is 0. So the last character is A. Similarly TVDS23468E, After division reminder is 4, so the last character is E]

  • Two more points that are unchecked by FVU are the First 3 characters, which will be the short form of the Place where IT circle office is located and the Fourth character, which will be the First letter of the Deductor/Collector Surname or Company Name

What is the error message "Sum of TDS/TCS-Interest Amount + TDS/TCS-Others (amount) + Total Tax Deposit Amount as per deductee annexure is greater than Total of Deposit Amount as per Challan/Transfer Voucher number"?

In this case, the mentioned Challan is linked to the sum of deductions which total is greater than challan amount. TIN doesn’t accept the returns where the challan amount is less than the sum of deductions linked to that challan. The vice versa case is accepted.

While Validation Process, why the user should check the System Date?

The NSDL File Validation Utility refers system date for checking of dates in several fields [E.g.: Date of Bank Challan]. If the date mentioned in that field is greater than the system date, the FVU will report as Invalid Date. So it is advised for the user to check the system date, during Validation.

How to Identify error?

In this option, User can refer the Line numbers from Report file (generated by FVU) and identify the Record details. Referring those record details User can goto relevant record and correct the data.

The File is showing as Valid in SaralTDS, but when taken to TIN FC, they say invalid. Why?

The following may be the reason for non-acceptance:

  • The *.txt file is taken to TIN FC, where *.FVU is to be submitted.
  • The *.FVU file may be generated using an older version of FVU utility.
  • The designation of the employee might be containing any special character, which is validated by FVU but not by SAM.
  • There are also instances, where the problem was found with TIN FC system. In such case, the FC should be changed.

What are the solutions for problems (error messages) while importing, validating, Java related, etc?

In certain cases, the earlier versions of SaralTDS had problems in Importing, Validation, Exporting, etc. Please keep checking for the latest versions of the same, subject to changes/improvements in the software.

Software installation gives message There is no enough disk space available to install the program, even though the system has around 70 to 200MB of Disk Space left free. The Relyon system requirement specifies only 50 MB of Disk Space. Why?

Although the software requires only about Maximum 50MB of disk space the process of Installation requires around 300 MB free disk space. The user should leave at least 300MB of Free space and also ensure the Windows-> Temp folder completely Empty

Double clicking the Icon in the desktop and opening the software gives error message A fatal error… What is the resolution for this problem?

In such cases, User should right click and goto properties of the Shortcut icon and delete the complete Start In location. Then the user should say OK and start the program.

While opening a particular data file the software displays an error message Microsoft Jet Database engine cannot open the File xxxx, as the file may be opened exclusively by another user or you dont have sufficient permission to access the file. Why?

There are three instances. Either,

  • The attribute (Properties) of the file the user trying to open has been marked Read-Only. In this case, the properties of the data file should be verified.
  • The Folder where the file is located is accessed through a network and the sharing for that folder is marked Read-Only. It should be set to Full access.
  • The Folder where the file is located is accessed through a network and the sharing for that folder is marked Read-Only. It should be set to Full access.

What is the easiest way to check the full access in network?

To check the full access, User should access the Server folder from the Client system [Client System-> Network Neighborhood->Entire Network-> <Server Name>-> <Shared Folder>], Right click inside that folder and select New-> Text Document. If the text file gets created, then there is the Full access else it is not.

What is the way to send a data file to Relyon [support@relyonsoft.com]

The data file can be copied either directly from the data directory location through explorer or for the user following way can be suggested:

  • Open the software and goto File-> Open option
  • Right-click on the file, in which the problem persists and say Copy
  • Come to desktop and paste the file
  • Attach the file while emailing the details of the problem to support@relyonsoft.com