A TDS deduction is made by an employer when paying an employee's salary by Section 192 of the Income Tax Act of 1961. Form 24Q, which has to be filed every quarter, is the form an employer must use to file a pay TDS return.

Form 24Q must include information on the salaries paid to the workers and the TDS subtracted from the payment. Form 24Q is, in other words, the quarterly statement of the employee's paycheck and the TDS withheld by the deductor. In this post, we take a close look at TDS Form 24Q.

The business will make TDS deductions by Section 192 when paying an employee's monthly salary. To demonstrate the TDS for the compensation, the company must submit Form 24Q every quarter of the fiscal year.

You may see the total compensation paid to the deductee and the TDS taken from the employee's pay on Form 24Q. No company must deviate from the rules for filling out Form 24Q when necessary.

The company (deductor) deducts TDS by Section 192 when giving an employee (deductee) their monthly allowance. To indicate TDS for compensation, the company must file Form 24Q per quarter of the fiscal year.

The total compensation paid to the deductee and the TDS taken from the employee's wage are both shown on Form 24Q. No company is exempt from following the rules and submitting Form 24Q when necessary.

The following are the essential ideas to remember while using the 24Q Format and filling it out:

• For online upload, the file must be created in ASCII format with the "txt" filename extension.
• Every record that follows the previous record must start on a new line and terminate with a new line character. "0D" and "0A" are included in the hex values.
• Record Type and Upload Type are two examples of constant values that must only be written in BLOCK letters. File Header shall be denoted as 'FH' rather than 'FH' in the case of 'Record Type'.
• To a precision of two digits, decimal values must be entered in all quantity fields. Examples are 900.70 or 9878.00. It should be noted that the number must have a decimal point followed by two zeros in cases where fractional portions of amounts are prohibited. For example, the value 2345 will not be permitted, while the value 2345.00 would.
• The decimal must have a precision value of 4 when entering the rate at which tax is deducted (DD). For instance, the rate must be 7.0000 if it is 7.
• Any mention of M or O denotes that the field must be filled out, whereas O denotes that filling out the area is optional.
• All dates should be entered using the following format: "DDMMYYYY." There shouldn't be a date in the future among the dates.
• Nil challans and transfer vouchers must have deductee records with a flag of "A" or "B" that must be filled up in the notes section in the event of a lower or non-deduction.
• Additional forms, Annexures I and II, must be submitted with this one. It is required to complete Annexure I for each of the year's four quarters.
• Only Annexure II must be submitted for the last quarter of the year.

Two annexures, referred to as Annexures I and II, are part of Form 24Q.

Annexure I
Details on the deductor, challans, and deductees are included in Annexure I. Details about salaries are not included in this appendix. The annexure must be filed and submitted for each fiscal year’s four quarters.
Challan information is included in Annexure I.
• Code for the branch's BSR
• Date of the challan's deposit
• Serial number for a challan
• Amount total in Challan
• Distributing the TDS money among the deductees
• Divide the interest amount among the deductees.

Details on the deductee are provided in Annexure I
• Employee identification number (if available)
• PAN of the worker
• Identifier of the worker
• Section Code TDS
• Date of credit/payment
• Amount credited or paid
• TDS quantity
• An education taxes

Annexure II
Along with the employee's compensation information for the whole fiscal year, Annexure II also includes salary information for the fourth quarter of each fiscal year, which is the only quarter for which it is required to be reported. This annexe consists of all necessary employee deductions, additional income, real estate owned, and the estimated tax burden.

Income tax brackets must withhold TDS on salaries. The employer must consider all of the employee's deductions and investments.

Form 16 and Form 24Q modifications recently published by the CBDT will take effect on May 12, 2022.

1. Earnings reported by employees under Section 10:
In the previous arrangement, employers may provide combined wage data, leaving room for interpretation. The tax agency demands a wage breakdown under the new structure, and Section 10 lists all exemptions.

Employees are excluded from Section 10's exemptions for the following: house rent allowances, child care expenses, hostel expenses, gratuities, leave travel expenses, commuted value of pension, go encashment salary, and more. If an employee requests more than $1 lakh in HRA benefits, the landlord's information (Name & PAN number) must be provided.

2. Section 16(IA) Standard Deduction:
It was integrated (this is a new provision applicable from FY-18-19 onwards). The standard deduction is permitted for calculating income taxable under head wages under the newly added section 16(IA). The normal deduction amount is Rs. 40,000, or the lesser of your income or pension. Section 16 also exempts professional tax (16 iii) and entertainment allowance (16ii).

3. Pay cut from prior employment.
Separate salary breakdown from prior employment must be displayed (earlier, this was one consolidated value).

4. Section 87A rebate
Individual taxpayers with yearly incomes up to Rs. 5 lakhs are eligible for complete tax relief. The income threshold that qualifies for tax relief under section 87A has increased from Rs 3.5 lakh to Rs 5 lakh. This indicates that the 2022 Budget raised the section 87A tax refund maximum from Rs. 2500 to Rs. 12,500.

The Tax Deduction Account Number, or TAN, is required for TDS deduction and completing Form 24Q. There are also the following requirements for filing Form 24Q:

1. Challan specifics
• Invoice Number
• Schedule Date
• Challan Number

2. Employer Specifics
• PAN of the worker
• Other income information

You must do the following actions as listed below:

1. The return must be submitted electronically if the deductor is:
It is required for certain persons to file their quarterly returns online. If this is the deductor:
• Government employee
• A company's chief executive
• The taxpayer is obliged by Section 44AB of the Income Tax Act of 1961 to have its accounts audited for the prior year.
• If the statement for any fiscal year quarter has 20 or more deductee records. Annexure-I must be completed for each year’s four quarters, while Annexure-II must be submitted for the final quarter.

2. Boundary Limit
There is no need to withhold tax at source if the amount spent or paid throughout the year is below the threshold level. Net taxable income that is less than the maximum amount exempted from tax.
• For one person, Rs. 2,50,000
• For Senior Citizens, Rs. 30,000
• For Super Senior Citizens, Rs. 5,000

3. Interest rates
If TDS is not deducted, 1% interest is charged from the due date of deduction to the date of determination. If TDS is not deposited, the appeal of 1.5% is charged each month from the date of removal to the date of payment.

4. Fees that must be paid when filing
If the actual filing date is later than the deadline, Section 234E imposes a fine. Until the return is filed, there is a fine of Rs 200 daily. The penalty sum may match the total TDS amount, but it will never go beyond it. The Assessing Officer may impose an extra fine between Rs 10,000 and Rs 1,000,000 per Section 271H.

It is crucial to remember that under Section 201A, interest is charged at rates of 1% and 1.5% per month for non-deduction and non-payment of TDS. When taxes are not paid on time, this provision does not apply.

5. Deadlines
• April through June - July 31
• July through September - October 31.
• October through December - January 31.
• January through March - May 31

6. Online Filing Procedures
The Employer has two options for completing Form 24Q: online or offline. Online submission of the quarterly return is required for certain people. These include companies like -
• Public authorities. (Either state or federal).
• The chief executive of a firm.
• Whose accounts were subject to a tax examination under Section 44AB of the Income Tax Act for the most recent year?
• If there are more than 20 workers at any moment throughout the fiscal year.

You may submit your returns online (RPU) through the Return Preparation Utility. There are several third-party programmes available for filing returns. Additionally, they are referenced on the NSDL website.

1. The TDS software should be downloaded first from the NSDL website. First, go onto their website and choose the utility below in circles.
2. Download the folder, then unzip it. Choose the TDS RPU.bat file next. If the Java program is not already installed, you may download it from the internet and install it.
3. Open the utility and choose Form 24Q from the centre drop-down menu. Select the usual icon next since the amended form hasn't been submitted. Press "click to continue" after that.
4. At that point, the server will direct to form 24Q. Since Annexure II will only be available for the fourth quarter, you won't be able to pick it for the first three quarters.
5. Afterwards, the employer enters the essential information in the form window. These include the TAN, PAN, financial year, kind of deductor, and employer information. Fields marked with an asterisk (*) are required fields. The form demands that the specifics of Form 24Q submitted for the prior period be included at the conclusion. The validation of the initial filing is included in the previous return's receipt number.
6. Step 6
• The amount of tax paid is included on the challan tab. It's essential to pay attention to the TDS amount, surcharge, interest, and fees columns. The challan contains the BSR code, which the employer may get there. Select 200 for the "minor head of challan."
• It is recommended that company owners have a separate Excel form on hand when creating challans. It would assist them in preparing the 24Q return without referring to each challan one at a time.

7. Add the deductees' information, including the number of workers, to Annexure I.
• Start by adding the rows. There will be an equal number of rows as workers. Choose the relevant part under "section under which payment made" in the dialogue box. While sections 92 A and 92 B are for government personnel, section 92 B is for non-government employees.
• Employers often run across issues with the employee code. This is the unique employee code for the business. The serial number might be used in its place if the firm lacks a similar principle.
• The employee's PAN number is the most crucial column. It has to be accurate.
• The specifics of the gross salary paid, not the TDS amount, are the date and amount of payment.
• TDS is often deducted on the day when workers' salaries are credited to their bank accounts. Therefore, the date might be the same in both columns.
• The employer might mention the certificate number in a separate column. Only fill it out if there is no deduction or a little deduction.
• Under section 197, the assessing officer often issues a certificate. Here, he says that the employer will withhold less tax or none. Take the information from any employees who may have such a certificate.

8. The wage information in Annexure II is essential to this return. Add the necessary number of rows at the beginning, which should be the same as the number of workers.

• Next, provide basic information such as name, PAN number, employee type, and length of employment. Fill in the information about the compensation you earned from different jobs in column 9. This is relevant in particular to new employees.
• The current or chosen employer will withhold tax from the total amount of compensation at the source (including salary received from the previous or other employers). The "Chosen employer" may be chosen by the employee.
• Mention the employee's reported residential property income in column number 15.
• If the amount of HRA claimed exceeds Rs 1,00,000, it is shown in column 33. Provide the landlord's PAN number if it exceeds Rs. 1,00,000.

9. At this point, choose "create the file." A dialogue window will then pop up, as seen below.
• The dialogue box requests that you upload the challan's CSI file. The NSDL site makes it simple to obtain this document. To get the challan file, use the NSDL OLTAS application in your browser. Mention the TAN number and period once the site displays. Download the file next.

10. At the conclusion, press the "Validate" button. The FVU file and Form 27 A will then be produced. Please send the completed form 27 A and FVU file to the TIN facilitator centre once the employer signs it.

The Income Tax Act's sections 15, 16, and 17 are used by the employee to calculate his salary income. The scope of this head is defined in Section 15, along with the revenues that fall within this head's purview. Deductions from income taxable under the head pay are permitted under Section 16.

The terms "salary," "perquisites," and "profits instead of pay" are defined in Section 17. It's also crucial to remember that an income cannot be taxed under the heading "salary" unless there is an employer-employee relationship. The relationship between the parts is shown in the table below.

To avoid deducting too much TDS, the employer must be informed of the deductions the employee has requested. The employee must provide the employer with the information they need to complete Form 24Q. These specifics are:
• Proof of the Employee's Investment: It is given by the employee at the start of the fiscal year. The amount of tax savings invested may differ from what is estimated. After the fiscal year, the employee may provide documentation and proof of such investments.
• Loss of Household Property: By section 24, an employee may deduct interest payments made. The sections, however, cap the loss amount at Rs. 2,000,000. To get the benefit, the employee must inform the employer about any damages to residential property.
• Income from Other Sources: The employee may still claim the benefit when completing their income tax return, even if they omit to disclose their income from other sources.
• Deductions: The employee must inform the employer of any deductions they intend to claim under the various provisions of Chapter VIA.

• Make sure all of the information you provide is accurate, and if necessary, have the necessary supporting paperwork.
• Before presenting the PAN information, make careful to double-check them all.
• Remember that any error on the form might result in cancellation.
• On a case-by-case basis, the CBDT often extends the deadline for submitting the TDS Form 24Q for a financial year. If you haven't submitted your returns on time, you might take advantage of these notifications as excellent chances to monitor numerous information portals. Long-term, it will be advantageous to you. However, not all information portals are trustworthy. Therefore, choosing wisely and searching for a dedicated website is essential.
• The Forms undergo a variety of alterations from time to time. You must stay educated about them if you don't want to go off course.

The difference between Forms 24Q and 26Q is that the former is used to declare TDS from income from salaries, while the latter is used to claim TDS from other sources other than salaries. 192A - Salary paid to government workers who are not unionised, 192B - Salary paid to non-government employees, and 192C - Salary paid to unionised government employees are among the TDS Sections covered by 24Q.

You are required by income tax legislation to submit Form 24Q, TDS return. In contrast to GST, where tax payment and return filing are made concurrently, there is a distinct distinction. Taxes are due every month, with quarterly reports coming after.

With this structure, the tax authorities can access sufficient data to close gaps and stop tax evasion. Employers should set up routine excel sheets so they may readily fill in the information. Only when the employer keeps accurate records of the transactions is this feasible.