Salary TDS
An Overview of Form 24Q
What is Form 24Q?
Form 24Q is a statement of TDS (tax deducted at source) used to submit TDS deduction information from salaries and wages. Employers must file Form 24Q to the Income Tax Department every quarter. This form will also include the employee’s annual pay income details and tax computation details which are submitted along the 4th Quarter details of Form 24Q.
Purpose of Form 24Q
Form 24Q is specifically for TDS on salaries and must be filed in order to comply with tax regulations. Here are the main reasons for filing FORM 24Q:
- TDS Compliance:
- Employers are responsible for deducting TDS from their employees’ salary earnings according to the income tax slabs.
- FORM 24Q makes it easier to report and remit TDS deductions from salaries.
- Employee Documentation:
- FORM 24Q includes information regarding the TDS deducted and gives a detailed summary of an employee’s income and tax deductions.
- The TDS Certificate is an important document for employees when filing their income tax returns.
- Government Reporting:
- Filing FORM 24Q ensures that the government is informed of the TDS deducted from salary, helping with more efficient tax collection.
- Transparency and Accountability:
- It increases transparency among businesses, employees, and tax authorities by carefully documenting TDS details.
- Avoidance of Penalties:
- Noncompliance with TDS regulations, may result in penalties. Filing it on time and accurately will help you avoid such penalties.
- Year-end Tax Planning:
Filing FORM 24Q ensures that employees have an accurate record of their TDS, allowing them to effectively plan their taxes at the end of the financial year.
Who can deduct TDS from salaries?
Any person or business that pays salaries can deduct TDS (Tax Deducted at Source). Typically, employers are responsible for deducting TDS from their employees’ salary. The following are the main entities that can deduct TDS from salaries:
Employers:
Private firms, public companies, partnerships, and other organizations that employ persons must deduct TDS from their salaries.
Government Agencies:
Government departments and entities that hire people must also deduct TDS from their salaries.
Individuals and HUFs (Hindu Undivided Families):
Individuals and HUFs who have businesses or professions & who are subject to audit under Section 44AB of the Income Tax Act of 1961 may also be required to deduct TDS on employee salaries.
Entities Engaged in Specified Professions or Businesses:
Certain professions and businesses must deduct TDS, including employee salary, from all payments.
Remember that TDS should be deducted from salaries in accordance with the Income Tax Department’s income tax slabs and rates. Employers and other entities that deduct TDS must give employees Form 16, which provides information about the TDS deducted as well as other details.
Requirements for filing Form 24Q
In order to submit Form 24Q for TDS on salaries, employers must have:
- A valid TAN.
- A valid PAN.
- Correct employee information, including PAN, name, and address.
- A detailed wage breakdown for each employee.
- Accurate TDS computation based on current rates.
- The correct filing format as prescribed by the Income Tax Department.
- Verification and reconciliation of TDS information.
- Compliance with changes in tax regulations.
Employer should also ensure that the TDS deducted are deposited with the government within the due date and file the returns in the specified time.
How to File a TDS Return for Salary?
To file a TDS return for salary, please follow these steps:
- Obtain a TAN from the IT Department by applying online. This has to be completed at the start of the business.
- Then, calculate the TDS on Salary using each employee’s income, deductions, and exemptions. Saral can help you calculate and deduct TDS from your Salary.
- Use challan ITNS 281 to deposit the TDS amount in the government account. You can make payments both online and offline with authorized banks. Include your TAN, PAN, and any other essential details in the challan.
File a TDS return for salary tax using Form 24Q, which includes two annexures. Annexure I includes employer, employee, challan, and TDS information, whereas Annexure II comprises employee wage information for the complete financial year. Annexure II must be filed only during the 4th quarter return filing. - Create and check the TDS return file using the FVU tools accessible on the IT Department’s website.
- Enter your TAN and password to upload the TDS return file to the IT site. After uploading the file, you will receive a token number and a provisional receipt for your submission.
- To obtain a certificate of TDS deducted from salary, request and download Form 16 from the TRACES portal.
Format and validation of Form 24Q
Form 24Q is separated into many fields, and the following is a general format:
When filing an e-TDS/e-TCS return, follow the specified formats. The file should be in ASCII format with the extension ‘.txt’. Various applications, such as Saral PayPack / Saral TDS, can prepare this file. After you’ve created it in the permitted format, you need to validate it.
To validate Form 24Q, use the NSDL e-Gov platform’s File Validation Utility (FVU). If the file has any errors, the File Validation Utility (FVU) will provide a report explaining the errors. The FVU allows you to rectify problems and re-verify the file. The TIN-FC must receive an error-free produced file that has been validated using the File Validation Utility (FVU).
Annexure-I & Annexure-II
The following are the details of Annexures I and II:
Annexure-I
- The breakdown of TDS for each challan is shown in Annexure I, organized by deductee.
It must be presented for all four quarters of a financial year. It contains information such as the : - TAN,
- PAN,
- Name and address of the employer,
- BSR code,
- Date and amount of tax deposited,
- PAN,
- Name, and
- The amount of tax deducted for each employee and others.
Annexure-II
Annexure II of Form 24Q contains a full summary of an employee’s salary information for the entire financial year. It only has to be presented for the fourth quarter of the financial year.
This document contains important details such as gross salary, perquisite value, profits in lieu of salary, deductions under Chapter VI-A, rebate under Section 87A, standard deduction, net taxable income, and other relevant details that must be reported correctly.
How to submit Form 24Q
The Form 24Q is a quarterly tax statement for Indian employers. To submit, follow these steps:
- You can use any TDS return filing software on the market and enter the salary and TDS deduction details in the TDS section. TDS on Salary is automatically calculated in Saral PayPack.
- In Annexures I and II of Form 24Q, provide information on the deductor, deductees, challans, and salary TDS. Annexure II is only needed during the fourth quarter of the financial year.
- Save the information and generate a.txt file. Later, you can validate the file with the FVU tool which will generate the output (.fvu) file
- Log in to the IT portal with your TAN and password, then upload the returns.
- Enter the required information, including the financial year, the name of the form, the quarter, and the upload type. Click Upload after browsing, attaching the ZIP file.
- After that, use DSC or EVC to e-verify the submitted statement.
- After a successful upload, you will receive a confirmation and a token number for future reference. Then you can obtain the acknowledgement and provisional receipt for your submission.
Due dates of filing Form 24Q
Due dates for submitting Form 24Q (quarterly statement for TDS on salary) are as follows:
- Quarter ending June 30th, July 31st of the same year.
- September 30th to October 31st of the same year.
- December 31st on January 31st of the following year
- March 31st on May 31st of the following year
Penalty for a late submission
Form 24Q imposes a penalty under Section 234E of the Income Tax Act.
- If the deductor fails to submit the TDS return by the due date, a penalty of Rs. 200 per day would be charged for the delay. The penalty amount will be calculated from the day following the due date until the actual filing date.
- The maximum penalty amount is limited to the entire amount of TDS for which a TDS return is needed.
The penalty U/S 271H
- A penalty under Section 271H will be applied for returns that are delayed for an extended period of time, ranging from Rs. 10,000 to Rs. 1,00,000.
According to Section 271H, there are certain situations where penalties will not be imposed.
- If a TDS payment is made to the government.
- If the late filing fee and related interest have already been paid.
- If the TDS return is submitted within one year of its expiration date,
TDS Certificates for Employees
It is an important document that employees receive in order to comply with tax laws. Form 16 is given annually and details the employer’s salary and TDS deductions. It is an important document for employees who need to file income tax returns and precisely calculate their tax liability and claim credits. To comply with regulatory obligations and guarantee openness in TDS reporting, employers must issue Form 16 on time.
Form 16 has two parts:
- Part A (employer, employee, TDS, challan information) and
- Part B (salary, deductions, tax liability information)
Employer has to ensure that it is issued to each employee within the specified time limit which is 15 days from the date of return filing.
FAQs
1. What are the differences between Form 24Q and Form 26Q?
Ans : The following are the differences between Forms 24Q and 26Q:
|
Feature |
Form 24Q (TDS on Salary) |
Form 26Q (TDS on Non-Salary Payments) |
|
Purpose |
Reporting TDS on salaries. |
Reporting TDS on non-salary payments. |
|
Types of Payments Covered |
Salaries, including allowances, etc. |
Non-salary payments (interest, rent, etc.) |
|
Sections for TDS Deduction |
Section 192 for salary payments. |
Various sections are based on payment type. |
|
Frequency |
Quarterly filing. |
Quarterly filing. |
|
Details Reported |
Deductor, deductee, salary breakup, tax calculation. |
Deductor, deductee, nature of payment, TDS details. |
|
TDS Challan |
Challan ITNS 281 for deposit. |
Challan ITNS 281 for deposit. |
|
TDS Certificates Issued |
Form 16 for employees. |
Form 16A for non-salary TDS. |
|
Filing Platform |
ITDwebsite. |
ITD Website |
|
Common Aspects |
Requires TAN. Electronic filing. |
Requires TAN. Electronic filing. |
2. How does Form 24Q impact the employee tax filing process?
Ans : Form 24Q is a key document in the employee tax filing procedure. It serves as the foundation for Form 16, a TDS certificate that employer provide to employees. Form 16 is required for employees to file their income tax returns correctly.
3. Can employers correct errors or update information in Form 24Q after filing?
Ans : Yes, employers can correct or update Form 24Q after it has been filed. Employers can rectify errors online using the TRACES platform, ensuring accurate and compliant reporting.
