Form 26Q: How to File TDS Return for Non Salary Deductions?
Updated: Oct 1
Form 26Q is an essential document for businesses and entities that deduct Tax Deducted at Source (TDS) on payments other than salaries. As per the Income Tax Act, 1961, TDS must be deducted on various transactions like interest, dividends, professional fees, and contractor payments. Form 26Q is specifically used to report these deductions on a quarterly basis. Filing TDS returns accurately is crucial to ensure compliance with tax regulations and avoid penalties. In this article, we will walk you through the process of filing TDS returns using Form 26Q, explaining the steps involved, important deadlines, and key sections to be mindful of.
Table of Contents:
What is Form 26Q?
Taxes are paid by taxpayers on all forms of income. In India, one kind of TDS (Tax Deducted at Source) return form is Form 26Q. Reporting TDS deductions on payments other than salary is the only application for it. The deductor, who is in charge of deducting TDS, files Form 26Q to give details regarding the TDS deductions taken from different resident payments. Reporting TDS deductions on payments made to residents for non-salary items such as rent, commission, professional fees, interest, and other expenses is the main objective of Form 26Q.
Payments Covered under Form 26Q
It is mandatory for all deductors who make specific types of payments to deduct TDS from the total amount received. The types of payments handled by this form are listed below.
Payments to contractors
Commissions or brokers
Payment of insurance commissions
Payment for life insurance policies
Rent on property
Dividends
Interest on securities
Payments other than interest on securities
Payments for professional or technical services
Prizes commissions on the sale of lottery tickets
Winning from horse races
Winning from games, puzzles, and lotteries
Compensation or commissions to directors of the company
Applicability of Form 26Q
Form 26Q determines its applicability in the context of TDS governed by Section 200(3) of the Income Tax Act. Its main purpose is to serve as the TDS declaration for all payments—except those classified as salary disbursements. To effectively submit this form, a deductor must provide their TAN (Tax Deduction and Collection Account Number). Government deductors have to enter "PANNOTREQD" n Form 26Q, while non-government deductors must submit their PAN.
Form 26Q Format
Form 26Q is divided into four parts and an appendix. The TAN, PAN, financial year and kind of deductor are requested in the first section. The information in the second and third parts must be completed by the deductor and the person in charge of the tax deduction.
Details to Fill Out in Form 26Q
The following details have to be filled in Form 26Q:
Challan details:
Serial number of the challan
BSR Code
TDS amount
Surcharge
Amount of interest
Education cess amount
The number of demand drafts or the cheque (if applicable)
Total tax deposit
Tax deposit date
Collection code
Method of TDS deposition
Payer Details:
Name
Address
Contact details
PAN Number
Payee Details:
Name
Full Address
Email ID
PAN Number
Telephone number
The deductor should mention the reason for not deducting TDS or deducting it, whichever is applicable.
Sections under Form 26Q
Form 26Q is applicable for the tax deducted at source (TDS) for all payments except salaries and payments to non-residents, as per Section 200(3) of the Income Tax Act, 1961. This form records the details of payments subject to TDS, and the law specifies limits for TDS applicability. Below are the relevant sections:
Section 192: Income tax is not deducted at source from salaries.
Limit: TDS is not applicable if net taxable income is below Rs. 2,50,000 for individuals, Rs. 3,00,000 for senior citizens (60 years or older), and Rs. 5,00,000 for super senior citizens (80 years or older).
Section 192A: No TDS on withdrawal from an employee's provident fund (EPF) under certain conditions.
Limit: No tax deduction if the amount is less than Rs. 50,000.
Section 193: TDS on interest on securities.
Exemption: Interest on debentures received by individuals and HUFs via an account payee cheque from a public limited company.
Limit: Exemption up to Rs. 5,000.
Section 193: TDS on interest on 8% savings bonds, 2003.
Limit: Exemption if the interest does not exceed Rs. 10,000.
Section 194: TDS on dividends.
Limit: No TDS if the dividend does not exceed Rs. 5,000.
Section 194A: TDS on interest other than securities (e.g., bank interest, co-operative societies, or post office).
Limit: Rs. 40,000 (Rs. 50,000 for senior citizens).
Section 194A: TDS on interest other than securities for non-bank entities.
Limit: Rs. 5,000.
Section 194A: No TDS on interest awarded by the Motor Accident Claims Tribunal.
Limit: Exemption up to Rs. 50,000.
Section 194B: TDS on winnings from lotteries, crossword puzzles.
Limit: No TDS if winnings are less than Rs. 10,000.
Section 194BB: TDS on winnings from horse races.
Limit: No TDS if winnings do not exceed Rs. 10,000.
Section 194C: TDS on payments to contractors and subcontractors.
Limit: No TDS if a single payment is up to Rs. 30,000 or aggregate payments during the year do not exceed Rs. 1,00,000.
Section 194D: TDS on insurance commission.
Limit: No TDS if the total commission does not exceed Rs. 15,000.
Section 194DA: TDS on sum received from life insurance policies.
Limit: No TDS if the amount does not exceed Rs. 1,00,000.
Section 194EE: TDS on payments from National Savings Scheme (NSS).
Limit: No TDS if the amount does not exceed Rs. 2,500.
Section 194F: TDS on payments for repurchase of mutual funds or UTI units.
No specific limit provided for exemption.
Section 194G: TDS on commission from sale of lottery tickets.
Limit: No TDS if the total commission does not exceed Rs. 15,000.
Section 194H: TDS on commission or brokerage.
Limit: No TDS if the total earnings are up to Rs. 15,000. BSNL and MTNL are also exempt from deducting TDS on commissions paid to PCO franchisees.
Section 194I(a): TDS on rent payments for machinery, plant, or equipment.
Limit: No TDS if rent does not exceed Rs. 2,40,000 per annum.
Section 194I(b): TDS on rent payments for land, building, furniture, or fittings.
Limit: No TDS if rent does not exceed Rs. 2,40,000 per annum.
Section 194-IA: TDS on transfer of immovable property (excluding agricultural land).
Limit: No TDS if the sale consideration is less than Rs. 50,00,000.
Section 194-IB: TDS on rent payments by individuals or HUF for land/building.
Limit: No TDS if the monthly rent is up to Rs. 50,000.
Section 194J: TDS on fees for professional or technical services, royalty, or directors’ remuneration.
Limit: No TDS if the amount paid does not exceed Rs. 30,000 per annum.
Section 194LA: TDS on payment of compensation for compulsory acquisition of immovable property (other than agricultural land).
Limit: No TDS if the payment does not exceed Rs. 2,50,000 per annum.
Section 194LBA: TDS on income from units of a business trust.
Section 194LBB: TDS on income in respect of units of investment funds.
Section 194LBC: TDS on income from investment in securitization trusts.
Section 194N: TDS on cash withdrawals from banks or post offices.
Limit: No TDS if withdrawals do not exceed Rs. 1,00,00,000 per annum for non-filers of ITR, and Rs. 20,00,000 for filers.
Section 194O: TDS on payments made by e-commerce operators to e-commerce participants.
Limit: No TDS if the payment does not exceed Rs. 5,00,000 in a financial year for individuals or HUF.
Section 194Q: TDS on the purchase of goods.
Limit: No TDS if the aggregate purchase value does not exceed Rs. 50,00,000 in a financial year.
Section 194R: TDS on benefits or perquisites arising from business or profession.
Limit: No specific limit provided.
Section 194S: TDS on the transfer of Virtual Digital Assets (VDAs).
Limit: No TDS if the value of the transaction does not exceed Rs. 50,000 for individuals/HUF or Rs. 10,000 for others.
Section 197A: Exemption from TDS for payments where the payee provides a declaration in Form 15G/15H, subject to certain conditions.
Due Date of Filing the Form 26Q
It is required of all taxpayers to promptly and consistently file the TDS return along with form 26Q. The following deadlines apply to the quarterly filing of form 26Q:
Quarter 1: 31st July
Quarter 2: 31st Oct
Quarter 3: 31st Jan
Quarter 4: 31st May
The payer is required to deduct the TDS amount at the appropriate rate at the time of payment. This money should be promptly deposited using the challan ITNS 281 to the credit of the government exchequer. It can also be submitted online using the TIN website. The penalty is assessed as follows if the deduction and deposition procedures are not completed on time. Additionally, according to section 197 of the Income Tax Act of 1961, the payee must get a lower deduction certificate if the TDS is withheld at a lower rate. Assume that the payee receives the lesser deduction certificate. The TDS is then subtracted according to the certificate's stated rate, which will appear in the form.
Late Fees & Penalties
Depending on the amount and the lateness of the returns, the taxpayer may be required to pay penalties if Form 26Q is not filed by the deadlines specified above. Form 26Q must be filed by the deadline, or else a late filing fee of Rs. 200 per day will be assessed in accordance with Section 234E until the penalty equals the amount of TDS.
Penalty for not filing:
Similarly, in accordance with section 271H, the penalty for failing to file Form 26Q within a year of the deadline and filing it incorrectly is at least Rs. 10,000 but not more than Rs. 1,00,000. Section 271H does not impose penalties if the following requirements are satisfied:
TDS is deposited to the government.
Interest and penalty for late filing are deposited.
The return was submitted earlier than the one-year deadline.
In addition, if TDS returns are not deducted or deposited, the government may impose interest. If the TDS is not deducted on schedule, interest is assessed at the rate of one percent (1% p.m.) for the day that passes between the deduction's actual date and its due date. A 1.5% interest rate is applied to the amount of time that passes between the actual date of deduction and the actual date of deposition if the TDS is not deposited on time.
How to Download Form 26Q?
The TDS Return Form has been divided into four categories. A taxpayer can easily get the 26Q by following the instructions indicated below:
Step 1: Visit the official NSDL website at https://www.tin-nsdl.com/.
Step 2: Click the "Downloads" tab and opt for E-TDS/E-TCS from the drop-down list.
Step 3: After selecting "Quarterly Returns," choose "Regular."
Step 4: You will be on a new page.
Step 5: Select Form 26Q to download from the "Form" section.
Revision of Form 26Q
The deductor may file a rectification statement if, after submitting the TDS returns, a mistake or inconsistency is discovered in the form. This is not a free procedure, of course. There will be fees associated with submitting a revised return for the deductor. However, submitting the corrected form is unlimited. Multiple Revised Returns may be filed by the deductor. It is best to avoid making many of the adjustments that are readily incorporated into the TDS returns that have already been filed. The fees assessed each time are a significant factor in the need to double-check all the information before submitting it.
Conclusion
In summary, people and organisations involved in financial transactions subject to TDS must understand the significance and goal of Form 26Q. Following the guidelines, getting the form correctly, and turning it in on time will help to guarantee a simple, trouble-free procedure that maintains you in conformity with tax laws.
FAQ
Q1. What is the TDS form for non-salary deduction?
A TDS Return or Statement, or Form 26Q, is a document that provides information about TDS withheld from non-salary payments. It must be turned in on time, on a quarterly basis, before the deadline. This form contains information about the payments made and the TDS that the deductor withheld from those payments.
Q2. What is the purpose of Form 26Q?
The paperwork used to report TDS information for payments other than salary is Form 26Q. This form gives details on the total amount paid in a given quarter together with the associated amount of TDS deducted. Quarterly submission of Form 26Q is required.
Q3. Who can file Form 26Q?
The deductor, who is in charge of withholding TDS, sends form 26Q to provide information about the TDS deductions made on resident payments. Form 26Q is primarily used to record TDS withholdings on different types of payments. It could cover things like commission, interest, professional fees, rent, and other non-salary payments given to local people or organisations.
Q4. What is the difference between 24Q and 26Q?
When the person receiving the payment (the deductee) is an employee of the business, Form 24Q is the valid form. Conversely, 26Q is applicable to other domestic incomes (but not salaries).
Q5. Can I move the deduction entry from Q1 and Q2?
Yes, you can do it, but you will have to file a revised return for Q1 before filing the return for Q2.
Q6. What are the consequences of late filing of Form 26Q?
If Form 26Q is not filed within the stipulated deadlines, the deductor may face penalties. Under Section 234E of the Income Tax Act, a fine of Rs. 200 per day is levied for every day of delay until the return is filed. Additionally, other penalties may be imposed, ranging from Rs. 10,000 to Rs. 1,00,000, for failure to submit the form.
Q7. Is there any fee for correcting errors in Form 26Q?
No, there is no fee for correcting errors in Form 26Q. However, if the return was initially filed late, the penalty for the late filing may still apply. You can submit a revised return to correct any mistakes or omissions.
Q8. Can Form 26Q be filed manually?
No, Form 26Q cannot be filed manually. It must be filed electronically through the government’s TIN (Tax Information Network) website or authorized e-filing portals. This ensures transparency and ease of processing for both taxpayers and the tax department.
Q9. How can I check the status of my Form 26Q filing?
To check the status of your Form 26Q filing, you can log in to the TRACES portal using your TAN (Tax Deduction and Collection Account Number). Once logged in, navigate to the 'Statement Status' section, where you can view the status of your filed returns and download the Form 26Q acknowledgment.
Q10. What are the due dates for filing Form 26Q?
The due dates for filing Form 26Q are as follows:
Q1 (April to June): July 31
Q2 (July to September): October 31
Q3 (October to December): January 31
Q4 (January to March): May 31
Missing these deadlines may result in penalties or fines.
Q11. Can Form 26Q be revised?
Yes, Form 26Q can be revised if there are any errors or omissions in the original filing. The deductor can file a revised return to rectify mistakes related to incorrect PANs, payment details, or other discrepancies.
Q12. What documents are required for filing Form 26Q?
To file Form 26Q, the deductor needs to gather details of payments made to deductees, TDS deducted, PAN of the deductees, and details of the challans for TDS payments made to the government. All this information must be accurately reported in the quarterly TDS return.
Q13. What is the role of the deductee in Form 26Q?
The deductee is the person or entity whose payment is subject to TDS. Their role is to ensure that their PAN is correctly provided to the deductor and that the correct amount of TDS is deducted. The deductee can verify the TDS deduction through their Form 26AS, which shows the TDS credit.
Q14. How can deductors correct errors after submitting Form 26Q?
Deductors can correct errors by filing a revised return through the TRACES portal. This includes correcting PAN details, updating TDS amounts, or making any other necessary adjustments to reflect accurate information.
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