Hello, In this blog, you will see the following details of Form 24Q – TDS return on Salary.
What is Form 24Q?
Form 24Q is a statement for tax deducted at source (TDS). It is used to report TDS deducted details from salaries and wages. Employers are required to submit Form 24Q to the Income Tax Department on a quarterly basis. This form will also contain the annual salary income detials on the employee along with the tax computation details.
Purpose of Form 24Q
FORM 24Q is specifically related to TDS on salaries, and it is mandatory to file it to comply with tax regulations. Here are the key reasons for filing FORM 24Q:
- Employers are required to deduct TDS from the salaries of their employees as per the income tax slabs.
- FORM 24Q facilitates the reporting and remittance of TDS deducted on salaries.
- FORM 24Q contains details about the TDS deducted and provides a comprehensive overview of an employee’s tax deductions.
- It serves as a crucial document for employees while filing their income tax returns.
- Filing FORM 24Q ensures that the government is informed about the TDS deducted on salaries, helping in the efficient collection of taxes.
Transparency and Accountability:
- It promotes transparency between employers, employees, and the tax authorities by documenting the TDS details systematically.
Avoidance of Penalties:
- Non-compliance with TDS regulations, including filing FORM 24Q, may attract penalties. Filing it in a timely and accurate manner helps in avoiding such penalties.
Facilitates Refund Claims:
- For employees who are eligible for tax refunds, the information provided in FORM 24Q is essential for processing these claims.
Year-end Tax Planning:
Filing FORM 24Q ensures that employees have an accurate record of their TDS, enabling them to plan their taxes efficiently at the end of the financial year.
Who can deduct TDS from salaries?
TDS (Tax Deducted at Source) from salaries can be deducted by any person or entity that makes salary payments. Typically, employers are the ones responsible for deducting TDS from the salaries of their employees. Here are the key entities that can deduct TDS from salaries:
Private companies, public companies, partnerships, and other organisations that employ individuals are required to deduct TDS from the salaries they pay.
Government departments and agencies that employ individuals are also obligated to deduct TDS from the salaries paid to their employees.
Individuals and HUFs (Hindu Undivided Families):
Individuals and HUFs that are liable to audit under section 44AB of the Income Tax Act, 1961, and are engaged in businesses or professions may also be required to deduct TDS from salaries paid to employees.
Entities Engaged in Specified Professions or Businesses:
Certain specified professions and businesses are required to deduct TDS from the payments made, including salaries to employees.
It’s important to note that TDS from salaries should be deducted as per the income tax slabs and rates specified by the Income Tax Department. Employers and other entities deducting TDS are required to provide Form 16 to employees, which contains details of TDS deducted and other relevant information.
Requirements for filing Form 24Q
To file Form 24Q for TDS on salaries in India, employers need –
- Valid TAN.
- PAN of the deductor.
- Accurate employee details, including PAN, name, and address.
- Comprehensive salary breakdown for each employee.
- Quarterly filing adherence to specified due dates.
- Accurate TDS calculation based on prevailing rates.
- Timely TDS deposit to avoid penalties.
- Correct filing format as per Income Tax Department.
- Verification and reconciliation of TDS details.
- Compliance with changes in tax regulations.
How to File a TDS Return for Salary?
To file a TDS return for salary, you need to follow these steps:
- Obtain a TAN from the IT Department by applying online. This is required to be done at the start of the business.
- Then, compute the TDS on salary for each employee based on their income, deductions, and exemptions. To calculate and deduct TDS from your salary, you can use Saral.
- Deposit the TDS amount to the government account using challan ITNS 281. You can pay online or offline through authorised banks. You need to mention your TAN, PAN, and other details in the challan.
- File TDS return for salary tax using Form 24Q, which has two annexures. Annexure I contains employer, employee, challan, and TDS details, while Annexure II has employee’s salary details for the entire financial year. Annexure II is required to be filed only during the 4th Quarter return filing.
- Generate and validate the TDS return file using the FVU tools available on the IT Department website.
- Upload the TDS return file to the IT portal using your TAN and password. Uploading the file, you will receive a token number and a provisional receipt for your submission.
- To get the certificate of TDS deducted from salary, request & download Form 16 from the TRACES portal.
It has two parts:
Part A (employer, employee, TDS, challan) and
Part B (salary, deductions, tax liability)
issue Form 16 to each employee within the specified time limit.
Format for Form 24Q
The form is divided into various fields, and here is a general format for Form 24Q.
It is important to follow the specified formats when filing an e-TDS/e-TCS return. The file should be in an ASCII format and have the extension ‘.txt’. This can be prepared using various software like Saral PayPack, which are avaialble in the market. After creating the file according to the approved format, you need to validate it. To validate Form 24Q, use the File Validation Utility (FVU) found on the NSDL e-Gov platform. If the file contains any mistakes, the File Validation Utility (FVU) will provide a report with these mistakes. You can correct the errors and re-verify the file with the help of the FVU. It is important to submit an error-free generated file and validate it using the File Validation Utility (FVU) to the TIN-FC.
Annexure-I & Annexure-II
Following are the details of Annexure I & II –
The breakdown of TDS for each particular challan is displayed in Annexure I, organised by deductee.
It has to be submitted for all four quarters of a financial year. It contains information such as the –
- Name and address of the employer,
- BSR code,
- Date and amount of tax deposited,
- Name, and
- Amount of tax deducted for each employee, others.
Annexure II of Form 24Q provides a comprehensive summary of an employee’s salary details for the entire financial year. It only needs to be submitted for the 4th quarter of the financial year. This document contains important information such as gross salary, value of perquisites, profits in lieu of salary, deductions under Chapter VI-A, rebate under section 87A, standard deduction, net taxable income, and other relevant details that are required to be reported accurately.
How to submit Form 24Q
Form 24Q is a quarterly tax statement for Indian employers. To submit it, follow these steps –
- You can use any TDS return filing software available in the market and add the salary and TDS deduction details in the TDS corner of such software. In Saral PayPack, the TDS on Salary is automated with relevant calculations.
- Provide relevant details such as the deductor, the deductees, the challans, and the salary TDS in Annexure I & Annexure II of Form 24Q. Annexure II is only needed for the 4th quarter of the financial year.
- Save the details and create a file in the .txt format. Later, you can validate the file using the FVU tool.
- Login to the IT portal using your TAN and password and upload the returns
- Fill in the required information, such as the financial year, the form name, the quarter, and the upload type. Browse and attach the ZIP file and Click on Upload.
- Next, e-verify the uploaded statement through EVC or DSC.
- On successful uplaod, You will receive a confirmation and a token number for your reference. And then you can also download the acknowledgement and the provisional receipt of your submission.
Due dates of filing Form 24Q
The due dates for filing Form 24Q (quarterly statement for TDS on salary) are as follows:
- Quarter Ending June 30th on Jul 31st of the same year
- Sept 30th on Oct 31st of the same year
- Dec 31st on Jan 31st of the following year
- Mar 31st on May 31st of the following year
Penalty for a late submission
Form 24Q incurs a penalty as per Section 234E of the Income Tax Act.
- If the deductor fails to submit the TDS return on or before the due date, then a penalty of Rs. 200 per day will be charged for the delay period. This penalty amount will be calculated from the day immediately after the due date until the actual filing date.
- The maximum penalty amount cannot exceed the total amount of TDS for which a TDS return is required.
The penalty U/S 271H
- For return delayed for a longer period, a penalty Under Section 271H will be imposed ranging between Rs. 10,000 up to a maximum of Rs. 1,00,000.
According to Section 271H, there are certain situations where penalties will not be imposed.
- In case a TDS payment is made to the government.
- If the late filing charge and associated interest have already been paid.
- If the TDS return is submitted within one year from the expiration date,
TDS Certificates for Employees
It is an important document that is issued to employees for tax compliance. Form 16, which is provided annually, outlines salary details and TDS deductions made by the employer. It is a key document for employees filing their income tax returns and helping them accurately calculate their tax liability and claim credits. Here, employers are obligated to issue Form 16 in a timely manner to fulfill legal requirements and ensure transparency in TDS reporting.
What are the differences between Form 24Q and Form 26Q?
Following are the differences between Form 24Q and Form 26Q –
Form 24Q (TDS on Salary)
Form 26Q (TDS on Non-Salary Payments)
|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.
|Deductor, deductee, salary breakup, tax calculation.
|Deductor, deductee, nature of payment, TDS details.
|Challan ITNS 281 for deposit.
|Challan ITNS 281 for deposit.
|TDS Certificates Issued
|Form 16 for employees.
|Form 16A for non-salary TDS.
|Requires TAN. Electronic filing.
|Requires TAN. Electronic filing.
How does Form 24Q impact the employee tax filing process?
Form 24Q plays an important role in the employee tax filing process. It serves as the basis for generating Form 16, a TDS certificate employers issue to employees. Form 16 is essential for employees to file their income tax returns accurately.
Can employers correct errors or update information in Form 24Q after filing?
Yes, employers can make corrections or updates in Form 24Q after filing. Employers can rectify errors through online correction from the TRACES platform, ensuring accurate and compliant reporting.