The TDS software enables easy calculation of TDS payable and tax credits receivable by corporate/ individual during the previous year.
As per the Income Tax laws, every entity –be it a corporate or non-corporate- that makes payments to third parties are required to deduct Tax at source, called as TDS from the payments to be done and remit the amount so deducted to the Government. The payment can be done by depositing the monies at the branch of designated banks via challan.
The challan should accompany the TDS returns giving the details of the taxes deducted, the names of the deductee(s) and the bank where the amount is remitted. From the year 2003 onwards, the Government has
a) Made it mandatory for corporate assesses to furnish their TDS returns in electronic mode only, which is called the eTDS return.
b) However, this compulsion is not applicable to non-corporate assesses and hence they can file their returns in physical mode only.
c) Option is also given to non-corporate assesses to furnish their return via electronic mode by using the NSDL portal.
d) After filing the e-return, the details of the deductee(s) along with the challan has to be submitted to the Department. This serves as a control chart. The list can be furnished in a CD or a floppy diskette. The prescribed form is Form 27A which checks and balances the “Amount Paid” and Tax deducted at Source”.
In physical TDS era, the option was not available. Every assessee had to furnish their return in physical mode which ended up in manual errors and huge queues at the Department of Income Tax during the last date of filing. This mode used to increase the tension of default which directly affected the quality of returns being submitted. Even the scrutiny was difficult as some of the manual entries were erratic and unclear.
Due to the huge rush for filing, the persons acknowledging the receipt of TDS returns at Department level had no time to pre-scrutinise the returns, this led to filing of incomplete returns also. This gave scope for scrupulous assesses to evade tax by furnishing the erratic returns. By the time the Department scrutinizes the returns and initiates the proceedings, it would have taken years together, resulting in delayed justice. These kinds of loopholes encouraged more evasion of tax at the deductor’s level.
But after the year 2003, with the eTDS initiative, it saves not only the precious time of the tax return preparers, but also restricts incomplete returns being filed with the Department. The information furnished in Form 27A should match with the amounts mentioned in the eTDS return. These kinds of checks and balances were not available in the traditional TDS filing.
The click of a mouse is sufficient now with the TDS software in place. The software enables calculation of TDS percentages, generation of TDS statements, tracking of TDS certificates receivable and the like. Even the past data relating to TDS can also be retrieved using the TDS software.
