Computerization of TDS returns (E-TDS/TCS Returns) has been carried out to fulfil the following objectives :

• To cut down the compliance cost for deductors

• To correlate deduction of taxes made by deductors with the deposited taxes, and

• To correlate the deduction of taxes with the corresponding credits claimed by the deductees.

E-TDS/TCS Return is a return of TDS/TCS under sections 206 and 206C respectively prepared in electronic form as per the data structure prescribed by the Income Tax Department.

• Corporate Deductors and Government Deductors (Mandatory)

• Persons required to get their accounts audited u/s 44AB in the immediately preceding financial year. (Mandatory w.e.f. quarter ended 30th September, 2007)

• Persons having more than 50 deductee/ collectee records in a quarterly statement for any quarter of the immediately preceding financial year. (Mandatory w.e.f. quarter ended 30th September, 2007)

For all other categories of assessees, filing of E-TDS/TCS Return is optional. Hence they can still file their returns in physical form.

While preparing the E-return, the following issues have to be kept in mind.

• E-TDS/TCS return has to be prepared in the data format issued by the Director General of Income Tax (Systems) i.e the E-Filing Administrator appointed by the CBDT.
  This is available in the following websites – www.incometaxindia.gov.in and www.tin-nsdl.com.

• It is compulsory to quote TAN on all TDS returns, which consists of 10 digit alphanumeric code. Without the TAN, the return will not be accepted. To obtain a TAN, one can apply in Form No. 49B. If TAN is available in old format, the reformatted TAN can be searched from the website www.incometaxindia.gov.in.

• Particulars relating to deposit of TDS/TCS in the bank should be correctly and properly filled. However no bank challan or copy of TDS certificate is to be furnished along with E-TDS/TCS return file.

• Each E-TDS/TCS return file (Form 24Q, 26Q, 27Q or 27EQ) is to be furnished in a separate CD/floppy along with duly filled and signed Form 27A in physical form. Form 27A is the control chart containing a summary of the details in the E-TDS/TCS return file (Form 24Q, 26Q, 27Q or 27EQ).

• If one E-TDS/TCS return cannot be stored in one floppy, it should be stored in a CD. It can also be compressed using WINZIP 8.1 or ZIP IT FAST 3.0 (or higher version compression utility only), so as to ensure quick and smooth acceptance of the file.

• For the purpose of identification, affix a label on CD/floppy containing the details of deductor like name, TAN, form number and period to which the return pertains.

• Each branch of a deductor has to furnish separate E-TDS/TCS return quoting separate TAN issued to each branch respectively.

• FVU is a programme developed by NSDL which is used to ascertain whether the E-TDS/TCS return file contains any format level errors. When a return is passed through FVU, it generates an ‘error response file’. If there are no errors, the ‘error response file’ will display the control totals. These control totals are the same as the control totals in Form 27A.

• If there are errors, the ‘error response file’ will display the error location and error code along with the description. After rectification of the errors, the return is again passed through the FVU till an error free file is generated.

• After preparing and validating the E-TDS/TCS return, deductor can file the same at any TIN-FCs managed by NSDL.

• E-TDS/TCS return can also be filed online under digital signature.

• TIN-FCs will issue a provisional receipt to the deductor which is the proof of E-TDS/TCS return furnished by deductor.

• Deductor has to pay the following as upload fees (plus applicable service tax)

No. of Records	Upload Fee
Up to 100 deductee records	Rs. 25
101 to 1000 deductee records	Rs. 150
More than 1000 deductee records	Rs. 500

• For the quarter ended 30th September 2007 and 31st December, 2007 Form 24Q with less than 90% of PAN data of deductees would not be accepted. Thereafter the threshold limit for quoting PAN without which the return will not be accepted has increased to 95% for all returns filed on or after 1-4-2008.

• Similarly for the quarter ended 30th September 2007 and 31st December, 2007 Forms 26Q & 27EQ with less than 70% of PAN data of deductees would not be accepted. Thereafter the threshold limit for quoting PAN without which the return will not be accepted has increased to 85% for all returns filed on or after 1-4-2008.