Process to generate TDS Return (Salary / Non Salary / Non Resident / TCS)

Process to generate TDS Return (Salary / Non Salary / Non Resident / TCS)

TDS, or Tax Deducted at Source, is a mechanism established under the Income Tax Act to ensure a steady collection of taxes from various income sources. In this system, any company or individual making a payment is mandated to deduct a certain percentage of tax at the source if the payment surpasses specific threshold limits. The rates at which TDS is to be deducted are stipulated by the tax department.
This deduction process serves as a form of advance tax, requiring periodic deposits with the government. The responsibility for timely and accurate deduction lies with the Deductor, who is typically the entity making the payment. For the Deductee, the individual or entity receiving the payment, the TDS amount deducted can be claimed as a tax refund when filing their income tax return.
The company or person that initiates the payment after deducting TDS assumes the role of a "Deductor" while the entity or individual receiving the payment is termed the "Deductee" It is crucial for the Deductor to adhere to the prescribed TDS rates, deduct the applicable amount before making the payment, and subsequently deposit the deducted sum with the government.
In essence, TDS acts as a preventive measure against tax evasion, ensuring that the government receives a portion of taxes upfront. This system not only streamlines the tax collection process but also promotes financial discipline among taxpayers.

To start with , below is the flow for TDS software: 

Deductor Master

To Create Deductor Master Please follow the steps : Deductor's Master Creation

Deductee/Employee Master

Navigate to the "Master" section → Click on "Deductee/Employee Master"
Deductee:      Go to "Master" → Click on "Deductee/Employee Master" → Select "Deductee"
Employee:      Go to "Master" → Click on "Deductee/Employee Master" → Select "Employee"


Deductee/Employee Detail:      Enter the necessary details for Deductee/Employee:
  1. Provide Client Name (Deductee Name).
  2. Input PAN No. of the deductee. Use codes 1, 2, or 3 if PAN is not available.
  3. Enter PAN Ref. No.
  4. Enter Identification number.
  5. Select Status (TDS rates differ according to status).
  6. Choose Residential Status as Resident or Non-resident.
  7. Provide Aadhaar No., Email Address, Mobile No.
  8. Provide TIN (if applicable for Form 27Q).
  9. Enter Date of Birth (DOB) for employees.
  10. Indicate if the individual is a Sr. Citizen or Very Sr. Citizen.
Address:      Enter the address details:
  1. Flat No./Block no.
  2. Building Name, Road/Street, and Area locality.
  3. Town/City/District, PIN/ZIP, and Post Office.
  4. State Name and Country.
Ensure all mandatory details are entered and save the information.

PAN Verification:

After creates Employee/Deductee master, you need to verify the PAN number using the PAN verification option. To do so, please follow the process:  Bulk PAN Verification

Challan Entry:

A Challan is an official document, functioning as a receipt, typically used for various official transactions. In the context of your system, follow these steps:
Path: Navigate to "Challans" → Choose the appropriate return form for the preparation of the Challan (24Q, 26Q, 27Q, or 27EQ).


Press the "Add New Challan" button to enter the required data.


Challan Detail: Now, let's break down the details you need to fill in:
  1. Enter Challan/Voucher No.
  2. Input the date of deposit (Challan deposit date into the bank).
  3. Fill in the Cheque/DD No.
  4. Enter the BSR Code. (Select from the BSR code saved in the Master menu. Click on "Add BSR code" to find the BSR code, as described in the Master menu item. Not applicable for Government Deductor; it should be a 7-digit number.)
  5. Select whether the Challan was deposited by Book Entry ("Yes" or "No"). (Applicable in Government Deductor Only)
  6. Enter the Receipt No. 24G (It's a 5-digit number assigned/given by the bank).
  7. Select the Minor Head of Challan (200, 400, or 100 as per applicability).

Amount Detail: Now, let's move on to the amount details:
  1. Enter the TDS Amount (Challan deposit amount).
  2. Input Surcharge amount.
  3. Input Health & Education Cess.
  4. Input Interest amount.
  5. Input Fee.
  6. Input Penalty/Other amount, if any.
  7. The system will display the Total Tax Amount.
Once all the mandatory details are filled, click on the Save Button to complete the Challan Entry.

Import Challan from Govt. Portal:

If you have already paid the Challan and want to avoid manual data entry, you can import the Challan directly from the Government website.
Follow these steps to do so: Import Challan from Govt. Portal

Challan Payment:

If you haven't made the Challan payment and wish to do so, follow these clear steps: Challan Payment

Bulk Challan Verification Process:

After entering the Challan, if the client desires to verify the details, kindly follow these comprehensive steps: Bulk Challan Verification Process

Deductee Entry:

The next menu option is "Deductee Entry" where adjustments are made for the entered challans, whether they are for 24Q, 26Q, 27Q, or 27EQ, with the respective Deductee details.

Entering details by Form:

Path: Deductee Transaction → Form 24Q (Salary u/s 192)

Section 192:
TDS Deduction: Deduct TDS on salary if, in the financial year, the employee's salary exceeds the non-taxable limit.
Annual Tax Liability: Calculate the employee's annual tax liability.
Calculation Steps: Use the "Salary Details" option for calculating tax liability under section 192. Record other income details of the employee in a signed written format.
Monthly Deduction: Deduct tax in 12 monthly installments from the salary. Adjust accordingly if the employment period is less than 12 months.
Deposit and Return: Deposit the deducted tax by the prescribed date. Submit a quarterly return in Form 24Q by the due date. Provide additional details about annual salary in the fourth quarterly return.

Entering Details:
  1. Click "Add" to start.
  2. Deductee: Select from the list (created in "Master → Employee Mater").
  3. Select Voucher No., Challan amount, and challan date from the drop-down menu.  →  Choose the challan against which you want to adjust the employee. (Even if no challan is entered in "Challan Entry," you can enter employee/deductee data and create a challan later through "Mapping")
  4. Date of payment/credit: Enter the salary payment or credit date.
  5. Amount paid/credited: Enter the salary amount.
  6. Gross amount (TDS): Enter the TDS, and other tax-related details will be calculated automatically.
  7. Date of deduction: Defaults to "Date of Payment/Credited" as salary is paid/credited after deducting tax.
  8. Date of furnishing certificate: Enter the date when Form 16 (TDS certificate) is furnished.
  9. Reason: Enter the selection/form number for a lower deduction reason.
Click "Save" to save the entered data.
Click "Cancel" to cancel/modify and reset data before saving.

Adjust Deductee's TDS against the salary challan (challan u/s 192).
Alternatively, map deductee/deductees using the mapping option and select a challan (if already created in Challan Entry) or create a new challan under "Mapping"

Delete: Select deductee, click "Delete."
Modify: Double-click on the deductee entry, make necessary corrections, then click "Update"

Path: Deductee Transaction → Form  26Q(Non-Salary)

To enter the details for TDS adjustment against deductee entries, follow these steps:
  1. Click on the "Add" button to initiate the data entry process.
  2. Select the section for which TDS has been deposited.
  3. Choose the challan and voucher number from the dropdown menu. → A screen will appear on the right side, providing details of the selected challan. You can observe the available amount in the challan that can be adjusted against deductees.
  4. Click on the text box under "Deductees." The list of deductees will be displayed (ensure relevant deductees have been added in "Masters"). → Select the deductee from the displayed table. If you select the wrong deductee, you can change it by clicking on the deductee's name.
  5. Enter the amount paid or credited to the selected deductee.
  6. Input the date of payment in DD/MM/YY format.
  7. Enter the rate of tax. The default rate is given, but you can overwrite it with the desired rate.
  8. The amount of tax will be auto-displayed based on the entered rate.
  9. If applicable, enter the surcharge percentage. The default rate is provided, but you can modify it.
  10. If applicable, enter the education cess percentage. The default rate is given, but you can change it.
  11. Enter the sec. and higher education cess. The total tax deducted will be auto-displayed.
  12. The total tax deposited will also be auto-displayed.
  13. The date of deduction will be auto-displayed, indicating when the tax was deducted from the payment to the deductee. It is usually the same day or the day/days after the date of payment.
  14. Select the reason for lower deduction by choosing option ‘A’ or ‘B’ for a lower rate of deduction or other reasons as per TDS rules.
Click on the "Save" button to save the entries.
Repeat the same procedure to adjust the challan with other entries if the challan is deposited for more than one deductee.

Path : Deductee Transaction → Form 27Q(Non-Resident)

Here only the difference would be for Section selection for 27Q, the other procedure could be the same as that of Form wise entry Non- Salary- 26Q.
  1. Select proper Sections applicalble to the Forms like 194E, 195, 196A, 196B, etc.

Path : Deductee Transaction → Form 27EQ(TCS)

Here only the difference would be for Section selection for 27EQ, the other procedure could be the same as that of Form wise entry Non- Salary- 26Q.
  1. Select proper Sections applicalble to the Forms like 6CA, 6CB, 6CC, 6CD, etc.

Salary Details (Annexure II):

To fill Salary Details (Annexure II), Please follow the steps :  How to fill Annexure II (Salary) details

Excel export and Import Procedure:

For this please follow the steps : Excel export/import Procedure

Procedure for Mapping Deductee Entry → Salary and Non-Salary:

To Map Deductee Entry Details (Salary or Non-Salary), Please follow the steps :  Procedure for Mapping Deductee Entry → Salary and Non-Salary

Return Generation:

The generation of the FVU file is facilitated by the quarterly return.

Quarterly Return FVU File:      The File Validation Utility (FVU) is a Java-based tool used for validating e-TDS/TCS returns prepared for FY 2007-08 and onwards, specifically for Forms 24Q, 26Q, 27Q, and 27EQ.
This menu allows the preparation of the original submission file, as well as the generation of e-Forms for 24Q, 26Q, 27Q, and 27EQ. Additionally, hard copy reports can be created using this menu.
The fundamental process for generating the FVU file is outlined below:

E-Filing 24Q Salary:      This option enables the preparation of the FVU file and Form 27A generated through the FVU utility, meeting the requirements of the TDS department.

CSI File Download process

To Download CSI file, Please follow the steps : CSI Download

Download CSI from IT Portal

To Download CSI file from Income tax Portal, Please follow the steps : Download CSI from ITD Portal

  1. Specify the file creation date.
  2. TDS/TCS file name with Path: Designate the location to save the generated FVU file and other utility-generated files.
  3. Challan input name with file path: Download the CSI file, browse, and provide the Challan input name with the file path.
  4. Click the e-filing button to prepare the FVU file and Form 27A.
  5. In case of errors/mistakes in deductee, challan, or deductor entries, an error file will be generated. Rectify the errors and click the button again.
  6. If no errors are found, a file with an FVU extension will be generated.
Upon generating the FVU file, the software will redirect to the location where the FVU file and Form 27A are stored, such as "C:\KDK Data\Zen TDS\AssessmentYear\ClientCode\Quarter\Form24\Original."
Similar processes are followed for Form 26Q, 27Q, and 27EQ. Other menu options are available for generating hard copies of respective forms.

Return Upload

To upload the TDS Return, Please follow the steps : Retrun Upload Process

Hope this process will facilitate a seamless end-to-end journey, starting from return preparation to the final upload.

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