Form 26Q: TDS Return filing for Non Salary Deductions

What is form 26Q?

A taxpayer pays taxes on every kind of income. When an income which is not the salary, is received by the payee, form 26Q is used to file the TDS returns. Form 26Q is used to mention the amount of income and the TDS deducted on that income.

---

Sections under form 26Q

Under section 200(3) of the Income Tax Act, 1961, form 26Q is applicable for the tax deducted at source for all the payments except salary. The sections under this law provide the details of when TDS and the amount limit under which it is not applicable.

Section 192 – Tax is not deducted at source from salaries

Limit: The net income or the taxable income is below the taxable limit which is 2.5 lakhs for individuals, 3 lakhs for citizens above 60 years and 5 lakhs for citizens above 80 years.

---

Section 192A – Tax is not deducted at source from an employee’s Provident Fund

Limit: The paid amount is below Rs. 30000

---

Section 193 – No tax is deducted at source from the interest on debentures from a company which holds the interest of a lot of public. This interest is rewarded to the HUF or the individual through an account payee cheque.

Limit: The amount should be lower than Rs. 5000.

---

Section 193 - No tax is deducted at source from the interest earned on 8% savings bonds 2003, which are taxable.

Limit: The amount, paid or to be paid, should be below Rs. 10,000.

---

Section 193 - No tax is deducted at source from the interest given to a resident individual on 6.5% Gold bonds (1977) or 7% Gold bonds (1980)

Limit: Only if it is declared that the minimal value of these bonds never exceeded rupees ten thousand at any time during the preceding year.

---

Section 194 – No TDS is deducted if the dividend paid to a resident is through the a/c payee cheque.

Limit: The amount of the dividend should be lower than Rs. 2500

---

Section 194A – No TDS is deducted on the interest rewarded by a cooperative bank or a banking entity. The interest paid should be on other than securities.

Limit: The amount of interest should be lower than Rs. 10,000

---

Section 194A – No Tax is deducted at source on the interest earned under the deposit made at the post office under Senior Citizens Saving Scheme Rules, 2004.

Limit: The amount of interest should be lower than Rs. 10,000

---

Section 194A – No TDS is deducted on interest earned on anything except securities

Limit: The amount of interest should be lower than Rs. 5000

---

Section 194A – No TDS is deducted on the interest awarded by Motor Accident Claims Tribunal

Limit: The amount of interest paid or to be paid should be lower than Rs. 50,000

---

Section 194B – No tax is deducted at source on the winnings of a crossword puzzle or a lottery

Limit: The amount earned should be below ten thousand rupees

---

Section 194BB – Tax is not deducted at source on the winnings of a horse race

Limit: The amount earned should be below Rs. 10,000

---

Section 194C – No TDS is deducted on the amount paid or payable in this financial year to a contractor

Limit: The amount already paid or to be paid in a single payment is less than Rs. 30,000. The amount paid or to be paid to the contractor is lesser than Rs. 1,00,000 in aggregation.

---

Section 194D – No tax is deducted at source on the commission on insurance paid during the fiscal year

Limit: The amount has to be less than Rs. 15,000

---

Section 194DA – No tax is deducted at source on the amount payable under the life insurance policy to the individual. It includes the bonus too.

Limit: The amount payable should be below Rs. 1,00,000

---

Section 194EE – No TDS is deducted on the payments made under NSS deposits

Limit: The amount should be below Rs. 2500

---

Section 194G – No tax is deducted at source on the commission earned from lottery tickets

Limit: The amount of commission earned should be lower than Rs. 15,000

---

Section 194H – No tax is deducted at source on the commission or brokerage earned.

Limit: The amount earned should be below Rs. 15,000. Also, no TDS is to be subtracted on commission paid to the PCO franchisee by MTNL / BSNL.

---

Section 194-I – No tax is deducted at source on the rent paid on furniture and fittings, machinery and plant, land and buildings.

Limit: The amount of rent paid during the fiscal year should be lower than Rs. 1,80,000

---

Section 194-IA – No TDS is deducted on the amount to be paid for consideration for the acquisition of immovable property. The rule is not applicable to agricultural land.

Limit: The amount of interest paid or to be paid should be lower than Rs. 50,000

---

Section 194-IB – No tax is deducted at source on the rent paid by an individual or HUF to an individual for building or land or both. The books of both the parties should not be required for audit below section 44AB.

Limit: The amount of rent to be paid per month or a part of a month should be below Rs. 50,000

---

Section 194J – No TDS on payment of technical fees, professional fees, royalty or remuneration to the director.

Limit: The amount paid or to be paid should be lower than Rs. 30,000

---

Section 194LA – No tax is deducted at source on the payment of reimbursement made for compulsory procurement of land other than the agricultural land.

Limit: The amount paid or to be paid in the fiscal year should be less than Rs. 2,50,000

---

Section 206A – No tax is deducted at source if the interest is paid on quarterly return to the individual. Interest on securities is not included.

Limit: The amount of interest paid or to be paid is less than Rs. 10,000 where the payer is a bank or a co-operative society. The limit becomes Rs. 5000 in any other case.

---

Details to be filled in the form 26Q

The form 26Q only contains one annexure where the details are to be filled. These details are as follows:

• Challan details
  1. The serial number of challan
  2. TDS amount
  3. Surcharge amount
  4. BSR Code
  5. Education cess amount
  6. Amount of interest
  7. The total of tax deposit
  8. The number of demand draft or the cheque (if applicable)
  9. The collection code
  10. The tax deposit date
  11. Method of TDS deposition
• Payer Details
  1. Name
  2. Address
  3. PAN Number
  4. Contact details
• Payee Details
  1. Name of the payee
  2. Email ID
  3. Full Address
  4. Contact number
  5. PAN Number
  6. Telephone number

The deductor also has to mention the reason for not deducting TDS or deducting it at a lower case, whichever applicable.

---

Filing the form 26Q

All the taxpayers are supposed to file the TDS return with form 26Q in a timely manner and regularly. The form 26Q is filed on a quarterly basis and the last dates for doing that are as follows:

• Quarter 1 31st July
• Quarter 2 31st Oct
• Quarter 3 31st Jan
• Quarter 4 31st May

While making the payment, the payer needs to deduct the TDS amount according to the rate applicable. This deducted amount should be deposited to the credit of government exchequer through the challan ITNS 281 on time. It can also be filed online on the website of TIN. If the deduction and deposition process is not done on time, the penalty is levied as mentioned below.

Also, if the TDS is deducted at a lower rate, then the payee needs to get a certificate of lower deduction as per section 197 of the Income Tax Act, 1961. If the payee obtains the certificate of lower deduction, then the TDS is deducted according to the rate mentioned in the certificate and it will be reflected in the filing of TDS via the form 26Q.

Late filing fees

If the form 26Q is not filed according to the due dates mentioned above, the taxpayer is liable to pay some penalties depending on the amount and how late the returns are filed. According to Section 234E, if the form 26Q is not filed by the due date then a late filing fee of Rs. 200 per day is charged until the amount of the penalty becomes equal to the TDS amount.

Non-filing penalty

Similarly, if the form 26Q is not filed, then the penalty for failure of submitting the required documents is Rs. 10,000 to a maximum penalty amount of Rs. 1,00,000 according to section 271H.

If the following conditions are met, no penalty will be levied under section 271H:

• The TDS is deposited to the government.
• The interest and penalty for late filing have also been deposited.
• The return has been filed before the completion of 1 year from the due date.

Interest charged on late deduction and deposition

On top of that, the government may also charge interest for non-deduction and non-deposition of TDS returns. If the TDS is not deducted on time, then an interest of 1% per month is charged on the days spent between the due date of deduction and the actual date of TDS deduction.

Now, if the TDS is not deposited on time then an interest of 1.5% per month is levied on the time period spent between the actual date of deduction and the actual date of deposition.

---

Preparing the form 26Q

The form 26Q and the TDS return can be prepared and filed by using NSDL e-Gov eTDS/TCS Return Preparation Utility (RPU). The RPU can be downloaded from the website of TIN free of cost. The return has to be submitted to any of the TIN-FCs established by NSDL e-Gov. after filing the return, its status can be checked on the website by putting in the token number or the provisional receipt number and the TAN on NSDL website.

---

How to download the form 26Q?

To download the form 26Q, follow the given steps:

• Go to the official NSDL website - https://www.tin-nsdl.com/
• Click on the downloads tab and from the menu choose E-TDS/E-TCS.
• On this page, click on ‘quarterly returns’ and then select 'regular'.
• Once you do that you will be transferred to a new web page.
• This page will contain a section ‘form’ under which there will be form 26Q. Click on that.

---

Points to remember

While filing TDS returns through form 26Q, always remember to verify the PAN number, all the challans, and their respective challan numbers and also try to match these challans with the OLTAS or NSDL. One more point to verify is Form 27A. While filing TDS return, along with form 26Q, you should also have form 27A.

---

Revision of the form 26Q

In any case, if a mistake or discrepancy is noticed in the form after submitting the TDS returns, then the deductor can file a correction statement. Of course, this process is not free. The deductor will need to pay charges for filing a Revised Return. But there is no limit to filing the correction form. The deductor can submit multiple Revised Returns.

Many changes can be incorporated easily on the already filed TDs returns but it is better to avoid those. The charges levied every time are certainly an important reason why all the details should be checked for mistakes before you hit the submit button.