Deducting tax from salary payments does not end the TDS compliance responsibilities of an employer. An employer has to file quarterly TDS returns for tax deducted from salaries. 

TDS Return is a statement that is submitted by the deductors to the income tax department on a quarterly basis. It summarises all TDS related transactions carried out in a quarter.

However, the filing process is not as easy as it seems. Any omission or misstatement of details can invite notice for businesses from the income tax authorities. 

Let’s discuss the ins and outs of TDS return filing for salary payments extensively and how Opfin is streamlining compliance requirements for SMEs. 

What is Form 24Q

A quarterly statement reflecting details of the salary paid to the employees and tax deducted on salaries has to be filed by the employer in Form 24Q. It is a form for preparing TDS returns for tax deducted from salary

Form 24Q consists of 2 annexures. 

  • Annexure 1 includes details of employer, employees, tax deducted and deposited in a quarter. Businesses have to submit Annexure 1 for all the four quarters of the financial year
  • Annexure 2 contains salary details of the employees. Annexure 2 has to be submitted in the 4th quarter of the financial year along with salary details for the entire year

How to file Form 24Q

You can submit Form 24Q both online and offline. However, filing TDS returns electronically is compulsory for following persons: 

  • Any company registered under the Companies Act, 1956 or the Companies Act, 2013
  • Businesses subjected to tax audit under the Income Tax Act
  • A deductor where the total number of deductees exceeds 20 in a particular quarter
  • A government deductor

Returns are prepared using NSDL e-TDS return preparation utility or using third-party software. 

Using NSDL e-TDS Return Preparation Utility

  • Visit the TIN-NSDL website and click on ‘e-TDS/e-TCS’ tab under the services tab 
  • Click on ‘e-TDS/e-TCS RPU’ and download e-TDS/TCS return preparation utility from the link provided  
  • Then, unzip return preparation utility file and run the file named TDS_RPU_3.3 
  • A pop-up window will appear showing prerequisites for JAVA RPU installation. Ensure all the prerequisites are installed and click ‘Ok’ 
  • Select Form no. ‘24Q’ and type of statement as ‘Regular’. Then, select ‘click to continue’

TDS Returns

  • Fill all the mandatory details in the ‘Form’ tab like TAN of the deductor, PAN of the deductor, address, GST number, etc

24Q Filing

  • In 2nd fold of the same page, provide particulars of the person responsible for deduction of tax. Generally, the person responsible for tax deduction is an Authorised Signatory. Also, furnish the token/receipt number of earlier TDS statement filed 

TDS Returns

  • After entering the details in the form tab, fill out Challan and Annexure-I (Deductee details) tab. Annexure-II (Salary details) will also be required in the fourth quarter of the financial year. Then, click on Save 

24Q Filing

         A confirmation message will appear on the screen. 

24Q Filing - TDS

  • Recheck all the details filled and click on ‘Create File’. A window will appear on the screen where the CSI file will be uploaded (Download CSI file using TIN-NSDL website)

24Q Filing

  • Once the CSI file is uploaded, click on ‘Validate’. If the file is successfully validated, an FVU file and Form 27A will be automatically saved in the selected folder 

TDS Return- 24Q Filing  

  • The FVU file generated has to be furnished to TIN-Facilitation Centres along with Form 27A signed by the authorised signatory
  • If all the details provided are correct while submitting the return, then a token number will be issued. This token number is considered as an acknowledgement, indicating that the return has been filed

Due dates for filing TDS returns (Form 24Q)

Quarter Due Date
April to June (Q1) 31st July of the same FY
July to September (Q2) 31st October of the same FY
October to December (Q3) 31st January of the same FY
January to March (Q4) 31st May of the next FY

Penalties for late filing of TDS returns

Particulars Minimum Penalty Maximum Penalty
Late filing of Form 24Q (Penalty under Section 234E) Rs 200 per day until TDS return is filed Penalty amount should not exceed tax deducted 
Non- filing of Form 24Q (Penalty under Section 271H) Rs 10,000 Rs 1,00,000

 

No penalty will be charged if 

  • The business deposits TDS to the government
  • Late filing fees and interest is paid 
  • Return is filed before completion of 1 year from the due date

Razorpay’s automated recipe 

The process of generating Form 24Q and filing TDS returns requires complex calculations. Thus, it becomes a tedious and labour-extensive task for businesses. It takes around 1-2 days to complete the entire filing process (depending on the number of employees) because of the steps involved. 

Introducing Opfin – A solution to ease this tiresome task

[Also read: Why Businesses Should Automate Employee Salaries]

Opfin takes care of end-to-end payroll processing as well as compliance. No more long hours on payroll calculations, no more spreadsheets, and no more errors. 

With Opfin, you don’t have to worry about TDS payments, return filings and Form 16/16A generation. Click To Tweet

Everything is automated! 

Plus, other statutory payments such as PF, ESI, and professional tax are also taken care of. 

Opfin gives more power to your employees by allowing them to claim their reimbursements and tax exemptions on their dashboard, based on which their monthly payroll is adjusted automatically. 

In addition to automating payroll and compliance for businesses, Opfin also provides group health insurance to employees at a very economical premium. 

Even if you have 7 employees or lower,  Opfin provides group medical cover to your employees, which include COVID-19, pre-existing diseases, and maternity cover from the very first day. 

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A Writer by Chance. Finance Wizard. If not working, you can find me binge-watching F.R.I.E.N.D.S!

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