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TDS Non Compliance- Here is what you should know

TDS stands for Tax deducted at source, and as the name specifies, under TDS, every person who is responsible for making specific payments like interest, rest, salary etc. must deduct a certain amount as tax before making such payment in full to any person.

Basic provisions of TDS:

  • Every person responsible for deducting or collecting the tax is required to obtain TAN (Tax Deduction Account Number
  • It is mandatory to quote TAN in all TDS returns.
  • Tax shall be deducted or collected at source at the applicable rate of TDS.
  • Amount of TDS received shall be deposited to the credit of the Government.
  • Returns of TDS shall be filed periodically.
  • The person deducting TDS shall issue TDS certificate in respect of tax deducted by him.

TDS rules:

The Income Tax Act explains some rules that must be followed by the person deducting TDS and non-compliance of these rules will attract specific interest and penalty to be paid by the particular person.

  • Deduction of tax:

Tax must be deducted by the person responsible for making any eligible payment at the time of payment getting due or actual payment whichever is earlier. In case of delay in deduction of tax, as per the provisions of Section 271C of the Income Tax Act, interest at the rate of 1% per month of the TDS amount and any such amount as may be specified by the Joint Commissioner, will be required to be paid by the person responsible for deducting tax until the tax is deducted. However, the said amount cannot exceed the maximum amount of TDS.

  • TDS to be paid to the credit of Government:

The amount of TDS deducted by the person liable to deduct TDS is to be paid to the credit of government by 7th day of the succeeding month in which the tax was deducted and as per section 201 of the Income Tax Act, in case of non-payment or late payment of TDS, interest @ 1.5% per month of TDS amount subject to maximum amount of TDS is to be paid until the tax is not deposited. Also, if the person required to pay amount of TDS to the Government fails to do so, then as per section 221 of IT act, he will be liable to pay the amount as directed by the assessing officer in the form of penalty for failure to pay TDS amount subject to the maximum of total amount of tax in arrears.

Apart from interest and penalty, the person can be punished with imprisonment for a term of three months to seven years.

In the above cases, the amount of TDS deducted and paid to the credit of Government can be claimed as expenditure while computing taxable income under the head profits and gains from business and profession and deduction under section 80 can be availed. But in case of failure to deduct TDS or after deducting not paid to the Government, then the assessing officer has the power to disallow whole of such expenditure as per section 40 of the IT Act.

  • Returns of TDS:

Returns related to TDS must be filed as per the due date in the last month of the related quarter i.e. on the 31st day of July, October, January, and April during a financial year. If the return of TDS is not filed or is filed after the due date, then no interest is levied but a penalty of rupees 200 per day as per section 234E of IT act will be levied until the return is actually filed. However, the total amount of penalty shall not exceed the amount of tax. The same will be applicable in case of incorrect filing of TDS return.

In all the above cases, a reasonable opportunity of being heard will be given to the person before levying of the penalty.

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All you need to know about filing GSTR-10


GSTR-10 is a final return form, furnished by the taxable Individual whose GST registration is cancelled or surrendered. GSTR-10 contains details about all the stock that is held by the registered dealer till the date of cancellation of registration.

Due date for GSTR-10:
An Individual whose registration is cancelled and but has to file GSTR 10 must file it electronically within three months of the date of cancellation or date of cancellation order whichever is later.

Who should file GSTR-10?
GSTR 10 is to be filed only by such persons whose registration is cancelled or surrendered under GST. Other persons registered under GST are not required to file this return. Input service distributors, non-resident taxable persons, composition taxpayers, and persons required to deduct or collect TDS and TCS are also exempted from filing GSTR 10.

Difference between Final Return and Annual Return?
Taxpayers often confuse between GSTR 9 (annual return) and GSTR 10 (final return).
However, there are 2 main differences between GSTR 9 and GSTR 10:

  1. Annual return is mandatorily required to be filed by every registered person paying tax as a normal taxpayer under GST whereas, the Final return should be filed only by such persons registered under GST law who opts for cancellation of GST registration.
  2. Annual return, as the name represents, is to be filed by the person once in a year only in form GSTR 9, whereas, GSTR-10 is a one-time statement.

Penalty for not filing GSTR 10 on time
First of all, a notice will be sent to the registered person as a warning and 15 days time will be given to file the GST return 10 with all the documents required. If the person still does not file GSTR-10, the tax officer passes the order for cancellation of GST registration and tax payable along with any interest or penalty.

Details to be provided in GSTR-10:
Various details must be provided in GSTR 10 some of which are auto-populated at the time of system login while some details are needed to be furnished by the person. The details that are auto-populated while filing GSTR 10 includes GSTIN, Legal Name of the person, and Name and address of the business. Sections that need to be furnished include Application Reference Number, Effective Date of Surrender/Cancellation of GST registration, the Unique ID of Cancellation order provided by the authorities, Date of Cancellation Order and Particulars of Closing Stock.

Procedure to file GSTR10

Login to GST portal and click on services option and then on returns. In the column that appears, click on Final return option.  A window will appear mentioning 2 options, prepare online and prepare offline. Taxpayers with less than 500 records per table usually make use of prepare online facility while others may use prepare offline facility.

Final Return Dashboard
File Return Dashboard

After clicking on the Final Return option, the window would appear as follows:

Final Return Option
Final Return Option

Enter, the details on the 8A, 8B & 8C – Goods Details With Invoices column.

Good Details
Good Details

Click on the ‘Add Details’ Button

Add Details Page
Add Details Page

Select the Supplier’s registration and select from he dropdown list

Supplier Registration
Supplier Registration

Taxpayer would then be taken to the GSTR-10 dashboard page and the 8A,8B and 8C- Goods Details with Invoice column, 8D- Goods Details Without Invoices box in Form GSTR-10 will show all the records and value of goods.

GSTR -10 Details Page
GSTR -10 Details Page

After entering all the details, click PREVIEW DRAFT GSTR-10 button. This button will download the draft Summary page of Form GSTR-10 for review.

Draft GSTR -10
Draft GSTR -10 

Then Click on PROCEED TO FILE tab

File Tab
File Tab

After the status of GSTR-10 is ready to file, other tabs such as 9 & 10, amount of tax payable and paid tiles get enabled.

Tab 9 &10
Tab 9 &10 

File form GSTR – 10 with DSC/EVC

File 10
File 10 

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TDS/TCS provisions under GST to come into effect from 1st October 2018


The Government has directed the E-commerce companies to start collecting up to 1 percent Tax Collected at Source or TCS in the course of making any payment to suppliers under GST. Also, the other notified entities, that is, Public Sector Undertakings and the Government companies are directed to collect TDS at one percent on the payments done to the suppliers of Goods or services suppliers in excess of Rs 2.5 lakh.

What it means for e-commerce companies?

The Tax deducted at source (TDS) and Tax collected at source (TCS) provisions would be mandatory applicable from 1st of October under the GST law. Further, States too can levy up to 1 percent TDS under State GST (SGST) law. According to the Central GST act, the E-commerce companies like Flipkart and Amazon etc. for TCS and the other notified entities i.e PSU’s and the Government companies for TDS are directed to get their ERP’s updated soon to comply with these provisions by 1st October. This will not affect the consumers too much, but suppliers selling through E-commerce platforms would be greatly affected. The industries now actually require gearing up to get everything updated in their systems by the date notified.
It is expected that the idea of TCS and TDS would help the tax department to penetrate more in the Economic system and would prove to put a curb on tax evasion -both direct and indirect now.


Earlier, when GST came into practice from 1st July 2017, TDS and TCS provisions of GST were kept aside in order to make the GST tax collection simpler for businesses and to avoid the apprehensions against GST. Also, the reverse charge mechanism stands deferred till September end. Further, the GST Implementation Council (GIC) in its meeting postponed the related provisions firstly till June 30 and later till September 30, 2018. Now, from 1st October 2018, it would be implemented in all its capacity.

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How to import and view Form 26AS ?

Form 26AS is the tax credit statement which is a very useful document, required for filing the tax. The information of Form 26 AS can be imported directly, while filing the Income Tax Returns. Let us understand about the Form 26 AS and how to download it.

What is Form 26 AS?

It is the details of tax collected by the collectors

Self-assessment of tax payment

It contains the details of the high value transaction related to shares, mutual funds and so on.

Details of advance tax paid by the taxpayer

Refund received by the tax payer during the financial year

It is also important to understand different parts of the Form 26AS. The form usually consists of seven broad categories. These categories are:

Part A – Details of TDS

Part B – Tax collected at source

Part C – Tax Paid

Part D – Details of Paid Refund

Part E – AIR transactions

Part F – Tax deducted on sale of immovable property  under section  194 IA

Part G – TDS default

Process of downloading the Form 26 AS

26 AS Home Page

26 AS Home Page

  • After logging in, enter PAN number, password and date of birth/ date of incorporation in the DD/MM/YY format. It would prompt for Captcha code. Enter the code and login. Thereafter, enter PAN e filing website.

 Form 26AS Pan Page

Form 26AS Pan Page

  • On the next up screen, go to My account. Click on view 26AS in the drop down and view form 26 AS.

26 AS My Account Page

26 AS My Account Page

  • Click the ‘confirm’ tab after which you would be directed to the TRACES website. TRACES website would look like this.

 Form 26 AS Traces page

Form 26 AS Traces page

  • On the TRACES website, select the box on the screen and click Proceed which would migrate you to the TRACES TDS-CPC website.

Form 26 AS Traces Page

Form 26 AS Traces Page

  • On the TRACES website, click the link given below the page which reads ‘ Click View tax Credit to view Form 26AS.

Form 26 AS Tax Credit Page

Form 26 AS Tax Credit Page

  • Select the assessment year in addition to the format which you find suitable to see the Form 26 A-S. In case you want to see the form online, leave the format as HTML. For those who want to keep the manual form can download it in PDF format. Once the choice has been made, enter the ‘Verification code’ and press the ‘View/Download’. Button

26 AS PDF Page

26 AS PDF Page

  • For opening the document, one needs to enter the password. Password for Form 26AS would be the date of birth in DDMMYY.

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