When making certain payments to a payee, the payer is required to deduct TDS (Tax Deducted at Source) for transactions other than salary. The payer must then file a TDS return using Form 26Q.
Form 26Q must be submitted quarterly, detailing the total amount paid and the TDS deducted during the quarter.
26Q TDS Return Explanation
Form 26Q is used to report TDS under Section 200(3) of the Income Tax Act, covering Sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194F, among others. This form is used for all TDS deductions on payments except for salaries.
To file Form 26Q, the deductor must provide their TAN (Tax Deduction and Collection Account Number). Non-government deductors are required to quote their PAN (Permanent Account Number), while government deductors must use "PANNOTREQD" on the form.
Sections Covered in Form 26Q
Form 26Q, as specified under Section 200(3) of the Income Tax Act, 1961, applies to TDS on all payments except for salaries. Each section under this law details when TDS should be deducted and the thresholds below which TDS is not applicable.
1. Section 192: No TDS if net taxable income is below:
- ₹2,50,000 for individuals
- ₹3,00,000 for senior citizens
- ₹5,00,000 for super senior citizens
No TDS on salaries at source
2. Section 192A: No TDS on PF account payments if the amount is less than ₹30,000.
3. Section 193: No TDS on interest from debentures if:
- Amount paid or payable is less than ₹5,000
- Amount paid on 8% savings bonds is less than ₹10,000
- Nominal value of bonds is not more than ₹10,000
4. Section 194: No TDS if the amount paid or payable is less than ₹2,500.
5. Section 194A: No TDS if the amount paid or payable is less than:
- ₹10,000 for general interest
- ₹5,000 for interest on other specified payments
- ₹50,000 for senior citizens
6. Section 194B: No TDS if the amount paid or payable is less than ₹10,000.
7. Section 194BB: No TDS if the amount paid or payable is less than ₹10,000.
8. Section 194C: No TDS if the amount paid to a contractor is:
- Less than ₹30,000 in a single payment
- Less than ₹1,00,000 in aggregate during the financial year
9. Section 194D: No TDS if the amount paid or payable is less than ₹15,000.
10. Section 194DA: No TDS if the amount paid or payable is less than ₹1 lakh.
11. Section 194EE: No TDS if the amount paid or payable is less than ₹2,500.
12. Section 194G: No TDS if the amount paid or payable is less than ₹15,000.
13. Section 194H: No TDS on commissions if the amount paid or payable is less than ₹15,000.
14. Section 194-I: No TDS on rent if the amount paid or payable is less than ₹1,80,000.
15. Section 194-IA: No TDS if the amount paid or payable is less than ₹50 lakhs.
16. Section 194-IB: No TDS on rent if the monthly rent is less than ₹50,000.
17. Section 194J: No TDS if the amount paid or payable is less than ₹30,000.
18. Section 194LA: No TDS if the amount paid or payable is less than ₹2.5 lakhs.
19. Section 206A: No TDS if the amount paid or payable is less than:
- ₹10,000 for payments from a co-operative society or banking company
- ₹5,000 in other cases
Information to Include in Form 26Q
Unlike Form 24Q, which has two annexures, Form 26Q contains only one. The form requires details such as the Challan details (BSR code, payment date, total amount, etc.), as well as information about the deductor and the deductees. Additionally, if TDS was not deducted or was deducted at a lower rate, the reasons must be provided in the form.
Penalties for Late Filing of Form 26Q
Late Filing Fees
Under Section 234E, a fine of ₹200 per day is imposed until the return is filed. This fee accrues daily until the total amount equals the TDS amount.
Penalty Under Section 271H
In addition to the late filing fee under Section 234E, the Assessing Officer may impose a penalty ranging from a minimum of ₹10,000 to a maximum of ₹1,00,000.
Avoiding Penalties Under Section 271H
No penalty will be charged under Section 271H if:
- TDS has been deposited to the government
- Late filing fees and any applicable interest are also paid
- The return is filed within one year from the due date
Important Points to Remember
- Verify all PAN numbers
- Cross-check the challans and match them through OLTAS or NSDL
- File a signed Form-27A along with the TDS return
FAQs
How to download Form 26Q?
To download Form 26Q, go to the 'Downloads' tab and select e-TCS or e-TDS from the drop-down menu. Choose the 'Quarterly Returns' option, click on 'Regular,' then select Form 26Q from the 'Form' section and click on download.
What is Form 26Q?
Form 26Q is a tax return form used for reporting TDS on all payments except salaries, filed quarterly.
What is the penalty for filing 26Q late?
Under Section 271H, there is a penalty ranging from Rs. 10,000 to Rs. 1,00,000, in addition to fees under Section 234E.
Is it mandatory to file Form 26Q?
Yes, it is mandatory to file Form 26Q quarterly by the due date.