Form 24Q: TDS Return on Salary Payment
Updated: Nov 6, 2024
When it comes to managing employee salaries, compliance with tax regulations is crucial for every employer. One of the key obligations is deducting Tax Deducted at Source (TDS) from employee salaries and reporting it to the Income Tax Department. This is where Form 24Q plays an essential role. Form 24Q is the quarterly statement filed by employers detailing the TDS deducted from salaries paid to employees. It not only ensures that the right amount of tax is deducted and credited to the government but also provides a clear record of employee earnings and deductions. In this blog, we’ll explore the purpose, structure, and filing process of Form 24Q, offering a complete guide for employers to stay compliant while processing salary payments.
Table of Content
What is Form 24Q?
Form 24Q is a quarterly TDS return form that employers submit to the Income Tax Department, reporting the TDS deducted from employee salaries. Filed under Section 192 of the Income Tax Act, it provides details about salary payments and TDS deductions. This includes information on the deductor (employer), deductee (employee), challans, and TDS calculations. The form is submitted in four quarters, with two main annexures:
Annexure I: Submitted in each of the four quarters.
Annexure II: Required only in the final quarter of the financial year.
Filing Form 24Q quarterly ensures that both the employer and employee remain compliant with tax regulations, reducing the risk of penalties.
Purpose of Form 24Q TDS
Form 24Q serves as a formal report of the TDS deducted on salaries under Section 192 of the Income Tax Act. Each quarter, employers are required to submit this form to provide details of salary payments and corresponding tax deductions.
Key Points About Form 24Q:
Required quarterly, summarizing TDS deducted from salaries.
Ensures transparency and accurate tax deductions for employees.
Mandates compliance for every employer without exemptions.
Form 24Q Annexures: Annexure I, Annexure II, Annexure III
Annexures I and II make up the two annexures that are included in 24Q. For the first three-quarters of an FY, Annexure II does not need to be submitted, but Annexure I must be submitted for each of the four quarters. Only the final quarter, from January to March, is required for Annexure II submission. According to the income tax slab, TDS must be withheld from salaries. If the employee submits documentation of their investments, the employer is required to take into account all of their deductions and investments.
Annexure I
Annexure I contains deductee-wise TDS break-up against each challan.
Details of challan(s):
BSR code of the branch
Challan serial number
Date of deposition of challan
Total Amount in Challan
TDS amount allocated among deductees
Interest amount allocated among deductees
Details of deductee(s):
Employee reference number (if available)
Name of the employee
PAN of the employee
Date of payment/ credit
TDS Section Code
Amount paid or credited
TDS amount
Education Cess
Furthermore, the employer must justify any non-deduction or reduced deduction of TDS if he does so or deducts it at a lower rate.
Annexure II
Annexure II provides a comprehensive breakdown of an employee's salary, details of any deductions claimed, income from other sources, and house property. It also includes the total tax liability computed for the individual.
Annexure III
Annexure III offers a detailed summary of pension and interest income paid or credited during the financial year. It also covers income from other sources, house property, and the overall tax liability calculated for the individual.
TDS Section Code in Form 24Q
The TDS Section Code indicates the salary type under which TDS is deducted:
These codes help the Income Tax Department to accurately classify employee salaries and ensure appropriate TDS deductions.
Due Dates for Submitting Form 24Q
The following table represents the time period for the submission of Form 24Q for different quarters during a year.
Form 24Q: Interest, Fees, and Penalties for Non-Compliance
Interest:
For non-deduction of TDS: Interest at the rate of 1% per month is levied, starting from the due date of deduction until the actual deduction is made.
For non-deposit of TDS: Interest at the rate of 1.5% per month is charged, from the date of deduction until the TDS amount is deposited.
Late Filing Fees: As per Section 234E, a fine of Rs. 200 per day is imposed until the TDS return is filed. This fine is applicable for each day until it reaches an amount equal to the total TDS due.
Penalty under Section 271H: Along with the late filing fees, the Assessing Officer may impose an additional penalty ranging from Rs. 10,000 to Rs. 1,00,000.
However, no penalty under Section 271H will be applied if:
The TDS has been deposited with the government.
Late filing fees and any applicable interest have been paid.
The return is filed within one year of the due date.
Online Submission of Form 24Q
The form may be downloaded and submitted online, together with the necessary paperwork, or it can be given in person at the business or organization. It must, however, be submitted online for some individuals. This comprises:
In case the deductor works for the government
If the principal officer of the corporation is the deductor
If Section 44AB of the Income Tax Act, 1961 mandates that the deductor's accounts for the previous year be audited
If a statement for any quarter of a specific fiscal year contains 20 or more records of deductees
Form 24Q Filing Requirements
For the deduction and filing of the form, one should have TAN, and another needs to fill the form 24Q as follows-
Challan details
Challan number- it is the unique identification number assigned to the challan that is used to deposit the TDS deducted to the government.
Challan date- The date on which TDS is deposited by the challan
Challan amount- The total amount of the TDS deposited through the use of challan
Employee details
Employee PAN- It is necessary for TDS filing
Amount paid or credited- The total amount credited to the employee
Employee reference number- It helps to identify the particular employee within the organization
TDS section code- The particular income tax section under which TDS is deducted from the employee’s salary.
Payment date- The date on which salary is credited to the employee’s account.
TDS amount- The amount of TDS deducted from an employee’s salary.
How to File TDS Return on Salary?
The following steps explain the process for filing a TDS return on salary:
Step 1: Visit the NSDL website to download the TDS utility. You must first log into the website before selecting the utility.
Step 2: You must first download and unzip the folder before selecting the TDS file.
Step 3: The utility must be opened, and you must select Form 24Q from the middle dropdown menu. The updated form hasn't been filed yet, so you'll need to select the standard icon and click "Continue."
Step 4: Form 24Q would then be directed by the server. Annexure II will only be available in the fourth quarter, thus you won't be able to select it during the first three.
Step 5: After that, the employer fills out the form window with the necessary data. These include the financial year, kind of deductor, employer details, TAN, and PAN. Fields marked with an asterisk are required. The form requires a mention of the details of the Form 24Q that was filed for the prior period at the end. The receipt number from the prior return contains the validation of the earlier file.
Step 6: The specifics of the tax amount paid are available on the challan tab. Crucial columns include the TDS amount, surcharge, interest, and fees. The BSR code is on the challan, which the employer can access. 200 should be chosen as the "minor head of challan." When creating challans, business owners should have a separate Excel form available. They would not have to consult each challan one at a time when producing the 24Q return.
Step 7: Complete Annexure I with the deductees' details, including the number of employees.
Step 8: The most crucial information in this return is the pay data in Annexure II. Start by adding the required number of rows, which should match the total number of workers.
Step 9: From the menu, choose "Create file" now.
Step 10: When all is said and done, click "Validate". After that, Form 27 A and the FVU file will be created. Once the employer has signed form 27 A, send it, together with the FVU file, to the TIN facilitator centre.
Tips for Filing TDS Return
You must remember the following tips and points when filing your TDS return:
Verify that all of the information you have provided is accurate, and if necessary, have the necessary paperwork to back it up.
Before submitting the PAN details, make sure you have verified all of them.
Remember that any error on the form could result in its cancellation.
On a case-by-case basis, the CBDT may extend the deadline for submitting the TDS Form 24Q for a specific financial year. These announcements are excellent opportunities for you to be informed about different information portals in case you haven't filed your taxes on time. Long-term, it will be advantageous to you. But since not all information portals can be trusted, please do your research and choose a reputable website.
Periodically, specific modifications are implemented in the Forms. You risk going in the incorrect direction if you don't stay updated about those.
Conclusion
With the given information, you should be able to complete Form 24Q accurately and with minimal mistakes. Whatever the case, it's critical to file a TDS return on time. It is your responsibility as a responsible citizen to pay your taxes on time if you wish to support India's growth and development.
FAQ
Q1. What is TDS on salary?
Before depositing the money in your account, employers take taxes out of your pay and submit it to the government on your behalf. TDS is the idea that taxes should be subtracted before payments are made.
Q2. What is the purpose of Form 24Q?
For the TDS deducted on salary under Section 192 of the Income Tax Act, 1961, Form 24Q is utilized to prepare eTDS returns. The deductor is required to submit it on a quarterly basis. It includes information about salaries paid and the amount of TDS that the business withholds from the employees.
Q3. What is the amount paid or credited in form 24Q?
You can view the total compensation paid to the deductee and the amount of TDS withheld from the employee's salary by referring to Form 24Q. No company is exempt from abiding by the guidelines and completing Form 24Q when needed.
Q4. What is the penalty for not filing form 24Q?
As per section 234E, till the return is filed, a fine of Rs. 200 per day must be paid. Until the total fine equals the TDS amount, this amount must be paid each day. As punishment under 271H, the AO may impose a penalty of at least Rs. 10,000 and a maximum of Rs. 1,00,000, in addition to the fees required under 234E.
Under 271H, there will be no fine if:
TDS is paid to the government, together with late filing penalties and any applicable interest.
The return is submitted before the one-year deadline expires.
Q5. What is the difference between 24Q and 26as?
Form 26Q is valid for domestic incomes other than salary, while Form 24Q is valid when the payee (receiver of payment) is an employee of the company.
Q6. What is a TDS refund?
When an amount is subtracted from the tax amount that exceeds the actual tax burden, the TDS refund is the result. Refunds for TDS on Interest or Excess Paid are available. Tax Deducted at Source, or TDS, is the amount of tax that is withheld from an employee's pay by their employer or another deductor and subsequently deposited to the IT Department.
Q7. Who can deduct TDS from salaries?
If salary exceeds the basic exemption limit, employers are required to deduct TDS. An individual, HUF, firm, or company can be an employer. Every quarter, the employer is required to submit a Form 24Q TDS return regarding the tax deduction on salaries.
Q8. How to calculate TDS on salary?
The amount of TDS that will be withheld is calculated by dividing the employee's projected tax due for the fiscal year by the total number of months he worked for that specific business. Nevertheless, TDS will be withheld at the rate of 20% plus 4% cess if the employee does not have a PAN.
Q9. What is the due date for filing Form 24Q?
The due date for filing Form 24Q is within the last day of the month following the end of each quarter. For example, the due date for the first quarter (April to June) is July 31st. Failure to file within the due date can result in penalties.
Q10. What happens if there are errors in Form 24Q?
If there are any errors in Form 24Q, such as incorrect PAN, incorrect details of TDS deducted, or any mismatch, a correction statement must be filed to rectify those errors. This can be done using the same software used for filing eTDS returns.
Q11. Can TDS on salary be adjusted against other deductions?
Yes, TDS on salary can be adjusted against other tax-saving deductions like investments under Section 80C, 80D, etc. Employers calculate the estimated tax payable after considering all eligible deductions and then deduct TDS accordingly.
Q12. How can an employee check the amount of TDS deducted from salary?
An employee can check the amount of TDS deducted from their salary by referring to Form 16, which is provided by the employer at the end of the financial year, or by logging into their account on the income tax portal and viewing their Form 26AS.
Q13. What are the consequences of not deducting TDS on salary?
If an employer fails to deduct TDS on salary, they may be liable to pay interest and penalties, and the employee's tax liability may not be fully settled. Additionally, non-deduction or non-payment of TDS can lead to legal proceedings for the employer.
Q14. What details are required in Form 24Q?
Form 24Q requires details like the total salary paid to employees, the TDS deducted, employees' PAN, and details of any allowances or deductions claimed by employees. The annexure also includes a summary of the total TDS deposited to the government.
Q15. What is the role of Form 16 in TDS on salary?
Form 16 is the certificate issued by an employer to an employee that contains details of the TDS deducted and deposited. It is essential for employees when filing their income tax returns as it serves as proof of TDS paid.
Q16. How can an employer rectify errors after filing Form 24Q?
If there are errors in Form 24Q, the employer can file a revised or corrected statement with the correct details. This is done through the e-filing portal by uploading a correction file in the prescribed format.
Q17. Is TDS applicable if an employee changes jobs mid-year?
Yes, TDS is still applicable even if an employee changes jobs mid-year. The new employer is required to deduct TDS based on the total income, which includes salary from the previous employer. Employees must declare their previous income to the new employer.
Q18. How does the government track TDS on salaries?
The government tracks TDS on salaries through the filing of Form 24Q by the employer and the submission of Form 26AS, which is updated based on the TDS deposited. This helps in ensuring that the correct amount of tax has been deducted and paid to the government.
Q19. What is Form 27A of income tax?
The TDS statements are filed by the deductors along with quarterly statements called form 27A of income tax. It includes control totals of the amount paid and income tax deducted at source along with the summary of TDS returns. For every TDS return, a separate form 27A is filed.
Q20. What is TDS return filing?
At the time of making the payment, tax needs to be deducted under the TDS scheme of the government. The income tax department is interested in the submission of a quarterly statement known as a TDS return. The submission of the return is necessary for the deductor. TDS return includes details of TDS deducted as well as of deposits.
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