written by Khatabook | July 1, 2021

Form 26Q: TDS Return Filing for Non-Salary Deductions

Form 26Q is a statement for TDS deducted on all payments except salaries. The deductor must deduct TDS (tax deducted at source) at the time of credit to the payee's account or at the time of payment, whichever is earlier. This form is applicable for TDS other than salary under Section 200(3) of the Income Tax Act, 1961.

Contents of Form 26Q

The following details are present in the TDS form 26Q

  • Details of Challan
  • Serial number
  • Amount of TDS
  • Amount of surcharge
  • BSR Code
  • Education cess
  • Interest amount
  • Total tax deposited
  • Demand draft/ cheque number (if applicable)
  • Collection code
  • Date of tax deposit
  • Details of payer
  • Name of the payer
  • Address of the payer
  • PAN
  • Contact details
  • Details of payee
  • Name of the payee
  • Email id
  • Address of the payee
  • PAN
  • Contact details

Also Read: How To Make TDS Payment Online?

Other Details of Form 26Q

Since the TDS is payable quarterly, the total amount payable will reflect in 26Q Form. It contains one annexure, unlike 24Q (for salaries). While submitting TDS form 26Q, the non-government deductor must submit their TAN (Tax Deduction Account Number) and PAN (Permanent Account Number). The government deductors must quote 'PANNOTREQD' in their form. Form no 26Q includes details of the deductor, details of deductee, BSR code,  date of payment, details of tax deducted and paid to the credit of Central Government, etc. 

Format of Form 26Q

You can get the format of Form 26Q at https://www.tin-nsdl.com/downloads/e-tds/download/26Q_04012018.pdf

Sections covered in the TDS Form 26Q

Sections Covered

Nature Of Payment

192A

Premature withdrawal from Employee Provident Fund where the payment or aggregate payment is Rs. 50000 or more.

193

Interest on Securities.

194

Dividend (including dividends on preference shares).

194A

Interest other than interest on securities.

194B

Winnings from any lottery, crossword puzzle or card game, or other game of any sort if the amount is Rs. 10000 or more.

194BB

Winnings from horse race if the amount is Rs. 10000 or more.

194C

Payments to Contractors

  • where the payment is more than Rs 30000 in case of a single contract, and
  • where the payment is more than Rs 100000 in case of contracts in a Financial Year.

194D

Insurance Commission where the payment exceeds Rs 15000 in a Financial year

194DA

Any sum under a Life Insurance Policy, whose aggregate amount of payment to a payee in a financial year is Rs 30000 or more.

194EE

Payment of deposit under National Savings Scheme when such payment is Rs 2500 or more in a financial year.

194F

Payments on account of repurchase of Units by UTI or Mutual Funds.

194G

Commission on sale of lottery tickets where such amount exceeds Rs 15000 in a financial year.

194H

Commission or brokerage for an amount exceeding Rs 15000 in a financial year.

194I

For rent, where such amount exceeds Rs 240000 in a year.

194-IA

Payment on transfer of certain immovable property other than agricultural land where the consideration for the transfer is Rs 50 lakhs or more.

194-IB

Payment of rent by certain individuals or HUF where the payment exceeds Rs 50000 for a month or part of a month.

194J

Fees for professional or technical services/ royalty/ non-compete fees/ director's remuneration where such fees are more than Rs 30000 in a financial year for each income category. This threshold limit does not apply to payments made to the director of a company.

194K

Income on units other than capital gains where such amount exceeds Rs 5000 in a financial year.

194LA

Compensation on acquiring certain immovable property other than agricultural land exceeds Rs 250000 in a financial year.

194LBA

Certain income in the form of interest units of a business trust to a residential unit holder.

194LBB

Certain income in the form of dividends from units of a business trust to a resident unit holder.

194LBC

Income in respect of investment in securitization trust.

194N

Cash withdrawals of more than Rs. 1 Crore.

194O

Payment of certain sums by the e-commerce operator to e-commerce participants.

Note that no TDS is charged if the payment made or expenditure incurred does not cross the threshold limits.

Due Date to file TDS Return 26Q

Quarter

Quarter Period

Quarter Ending

Due Date

1st Quarter

April - June

30 June

31st July of the financial year

2nd Quarter

July - September

30 September

31st October of the financial year

3rd Quarter

October - December

31 December

31st January of the financial year

4th Quarter

January - March

31 March

31st May of the financial year immediately following the financial year in which the deduction is made

26Q Due Date Extension 

The 26Q due date for the first and second quarter for the FY 2020-2021 is extended to 31st March 2021. From 14.05.2020 to 31.03.2021, the rates applicable will be 3/4th of the originally prescribed rates. Also, the due date to furnish the return for the fourth quarter is extended to 31st July 2021.

Requirements for Payment of TDS

Section 206AA requires furnishing of PAN by the deductee to the deductor, failing which the deductor has to deduct tax at the higher of the following rates:

  • at the rate specified in the relevant provision of the Income Tax Act, 1961; or
  • at the rate or rates in force; or
  • at the rate of 20% and in the case of Section 194-O, 5%.

Preparation of Form 26Q

The TDS form 26Q can be prepared and filed through the official website of NSDL from the facility of e-TDS return preparation utility (RPU). This RPU can be freely downloaded from the TIN-NSDL website. 

How to download Form 26Q?

To download the TDS form 26Q, you must follow the below steps:

  • Step 1 - Go to the official website of NSDL https://www.tin-nsdl.com/index.html
  • Step 2 - Then go to 'Downloads' and select e-TDS/ e-TCS from the list.
  • Step 3 - Select 'Quarterly Returns' from the list and Choose 'Regular'.
  • Step 4 - The website will open a page, select 26Q from the list of 'Forms'.
  • Step 5 - A new tab will open, and form 26Q will appear, and you can download it.

You must keep in mind some of the points given below before the submission of the return:

  1. All the PANs must be verified before the filing of form no 26Q.
  2. After PAN verification, verify the challans and match them through Online Tax Accounting System (OLTAS) or National Securities Depositories Limited (NSDL).
  3. You must also file signed Form 27-A with the TDS return 26Q.

Also Read: Form 24Q – TDS Return on Salary Payment

Deemed Assessee-in-default in case of failure to deduct or pay TDS

Any person, including the principal officer of a company:

  • who is required to deduct any sum as per the provisions of the Act; or
  • an employer paying tax on non-monetary perquisites (benefits) 

shall be deemed to be assessee-in-default if he does not deduct the whole or any part of the tax or after deducting fails to pay the tax.

Time Limit for Deeming a Person an Assessee-in-default for Failure to Deduct TDS

No order under Section 201(1), deeming a person to be an assessee-in-default for failure to deduct tax, shall be passed at any time after the expiry of:

  • seven years from the end of the financial year in which the payment is made or credit is given; or
  • two years from the end of the financial year in which the correction statement is delivered under section 200(3)

whichever is later.

If there is any delay while deducting TDS, the following will be chargeable:

  • Penalty
  • Late filing Fees
  • Interest

Penalty for Late Filing of Form 26Q

  • If the deductor did not file the TDS on time, then he will be required to pay the penalty under section 271H and interest.
  • If the deductor did not file the return within 1 year of the actual due date, then an additional penalty will be levied on the deductor.

The penalty amount under section 271H for failure to submit the required documents may range from Rs. 10000 to a maximum penalty of Rs. 100000.

Details of the Late Filing fee for Form 26Q

Any person who fails to file a TDS return or does not file the TDS return by the due dates must pay late filing fees under section 234E. The amount of late fees will be a sum of Rs. 200 every day until such failure continues. The amount of late fees shall not exceed the amount of TDS. This amount shall be treated as a late filing fee and not a penalty.

Example: If TDS of Rs 10000 was payable on May 14, but the deductor paid the amount on November 19, then the number of days from May 14 to November 19 becomes 190 days. The late filing fee becomes 200*190= 38000, which is more than the TDS amount. Therefore, the amount of the late fee will be Rs 10000. But, an amount of interest will be charged.

Rate of Interest for Late Filing of Form 26Q:

The government charges interest on the non-deduction or non-deposit of the TDS payment under section 201(1):

  • When TDS is not deducted, the government will charge 1% per month or part of the month from the due date of deduction to the actual payment date.
  • When TDS is deducted but not deposited the government will charge a rate of 1.5% per month or part of the month from the due date of payment to the actual payment date.

Example: If the TDS payable of an individual is Rs. 7500 and deducted on January 14, it was deposited on May 18. Then the interest chargeable shall be 7500* 1.5% per month * 5 months= Rs 562.50.

Revision of Return

If the deductor notices any discrepancy or mistake after submitting the TDS return, he must rectify the mistake or discrepancy. He must do so by filing the Revised Return. The deductor can revise the original return unlimited times, but the government will charge a fee each time. 

Thus, avoid any mistake while filing the return and re-check it more than once before the final submission.

The deductor can make the following adjustments during the computerized processing of the TDS statement or a correction statement:

  1. any arithmetical error in the statement; or
  2. an incorrect claim, if such a claim is evident.

Also Read: Time Limit To Deposit TDS And File TDS Return

Duties of The Person Deducting TDS

The duties of the tax deductor are summarised as follows:

  1. Obtain the Tax Deduction Account Number and quote it in all TDS documents.
  2. Deduct the tax at source at an applicable rate.
  3. Pay the tax as deducted to the credit of the Government.
  4. File the periodic TDS statements, that is, the TDS return
  5. Issue the TDS certificate in respect of the tax deducted.

Conclusion

The Form 26Q is only for the payments made or expenditure by the residents of India. So, this form is not applicable in the case of non-residents. Proper knowledge about the sections, due dates and threshold limits gives you an edge over others. In this way, you can avoid late fees, penalties, or interests and stay ahead in business. Confusions about tax payment may arise, especially in income tax, where there are many sections and limits. If you commit any mistake while filing the return, then it can always be revised. However, it must be revised within the time limit as stated above.

FAQs

Can any deduction entry be moved from Quarter 1 and Quarter 2?

Yes, you can move it, but you have to file a revised return for it.

Do I have to pay a fee for the correction of the e-TDS return?

Yes, a fee is required to be paid for the correction of the e-TDS return.

Can I change the section of a particular challan?

Yes, you can change the section of a challan by clicking on challan correction. Select the challan you want to edit and then edit it.

Is it possible to import the challan through an excel sheet?

Yes, it is possible.

Is there any software available for the preparation of TDS/TCS statement correction?

Yes, there are various softwares available to prepare the TDS statement correction. You can visit https://www.tin-nsdl.com/services/etds-etcs/etds-swproviders-etds.html to check the list of softwares available.

Is there a need to file Form 26Q separately for each category of a transaction?

No, you can file a single form for different categories of transactions.

At what intervals do I need to file TDS returns?

You are required to file the TDS quarterly.

Can I add a challan for each quarter?

Yes, you can add challan for every quarter.

Can I correct the TDS return after its submission?

Yes, through a revised return, you can rectify the mistakes in your return.

Can I re-generate a challan if I did not save it the first time?

Yes, you can re-generate a challan.

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