If you are making any payment or credit which attracts TDS as per the provisions of income tax act then you must follow the followings steps to comply with income tax provisions;
Get TAN
TAN stands for Tax Deduction Account Number. Every individual responsible for deducting tax at source must obtain a TAN before such deduction.
TAN is a ten digit alpha numeric number which has been provided to those persons who are responsible for deducting income tax from the payment made to the payee.
You can apply for a TAN by filling an application from 49B with any TIN facilitation center or any UTI approved center. You can also get it online by using the online services of NSDL.
TAN should be quoted by the person for all the correspondence related to TDS matters.
Deduct tax from the payment or income paid to payee
Income tax act specified 22 items from which tax has to be deducted at the time of payment or credit whichever is earlier. You need to deduct tax from these items at the rate specified for that payment or income.
Deposit TDS within the specified time limit
You need to deposit the tax deducted in step 2 with the income tax department before the specified date as specified for different persons. You can also deposit TDS online by using the online facility available at income tax site. Use challan number 281 for depositing Tax.
File statement of TDS within the specified time
After depositing the TDS amount you need to file quarterly statements with the income tax department within the specified time limit. You have to file these statements with the TIN facilitation center nearer to your office or location or in such other places. While filling your statement of TDS you need to use correct form. They are;
- Form 24Q for salaries
- Form 26Q for Non salaries
- Form 27A for control sheet
TDS certificate
You need to issue TDS certificate to the payer from whom you have deducted tax. For salary cases you have to issue form 16 and for non salary cases you need to issue form 16A.
Following person has to compulsorily file e-TDS
- Government offices/Departments
- Companies
- Persons whose accounts are auditable
- Persons whose TDS statements contain more than 50 deductees.
