The TDS, also known as Tax Deducted at Source, is a system that requires businesses to deduct a predetermined percentage of earnings and remit those deductions directly to the government. The TDS system helps curb tax evasion and optimally taxes individuals, trusts, partnerships and corporations by forcing them to pay their fair share of taxes. In simple words – any company that meets the criteria outlined in the article would need to register for TDS with the relevant authorities in their state. This is usually done through an accountant or a bookkeeping firm. They will also help you with submitting your quarterly payments online if you so choose to do it this way. Read on to know how you can submit your TDS payment online and other ways to do it.
What is TDS?
Tax Deducted at Source is a compulsory system where an organization (like a company) will deduct the applicable Income Tax before the employee is paid and transfer the amount to the government. It is a system that requires businesses to deduct a predetermined percentage of earnings and remit those deductions directly to the government. The TDS system helps curb tax evasion and optimally taxes individuals, trusts, partnerships and corporations by forcing them to pay their fair share of taxes.
How to register for TDS?
The first thing you need to do is find out whether you, as an employer, fall under the bracket of a “taxable person”. If you do, then you need to register for TDS. Deductions will be made from the payment of salaries, pensions or any other monetary benefits you pay to employees or contractors. It also applies to payments like rent, interest, and service fees. The registration process is fairly simple but is somewhat tedious. You need to fill out a TDS declaration form, which will be submitted to the authorities. This declaration is valid for a period of one year. Furthermore, you will also need to get a Tax Identification Number (TIN) from the same authorities and inform your employees/contractors about their TDS deductions.
When to submit your TDS payment online?
It is important to note that the due date for your first TDS payment will be a month after your registration date. Therefore, if you register for TDS on 1 June 2019, then you will be required to submit your first TDS payment by 30 July 2019. Moreover, you will need to submit your first TDS payment before 1 August 2019.
Steps to follow to submit your TDS payment online
Visit the official website of your state’s tax department and log in with your credentials. Select “Other Forms” in the drop-down menu and then click on “TDS”. Select the “Payment Cycle” and click on “Submit”. Provide your TIN, name of the payee, amount to be paid, and click “Submit”. The payment will be done online and the confirmation will be emailed to you.
Other ways to submit your TDS payment online
You can also submit your TDS payments online through an online TDS payment portal, which will make the process easier and quicker for you. It is generally advisable to use a portal that is verified by the government. However, it is a good idea to make a few phone calls to inquire about the services, rates, and terms and conditions that may come with the portals. There are a few portals that can make the TDS payment process a lot easier for you. Try out one or a combination of a few below to submit your TDS payment online.
The TDS system is a very important component of our tax system. The government has the right to collect taxes, but it also has an obligation to make sure that taxes are collected efficiently and fairly. It is important to note that any company that meets the criteria outlined in the article would need to register for TDS with the relevant authorities in their state. It is important to note that it is mandatory for any company/organization that pays you more than INR 50,000 in a financial year to deduct TDS.