NIL TDS Return – Filing declaration of NIL TDS Statement
Table of Contents
What is TDS Return / TDS Statements?
TDS return is a statement filed by the deductor (person making payment and deducting tax) declaring TDS of deductee (recipient of income). TDS return contains the amount of tax collected and deposit of such tax with government. Filing NIL TDS Return.
This process helps to claim a tax credit by deductee.
What is filing NIL TDS Return?
In case, no TDS return is filed by a TAN holder. Then, it is difficult for the tax department to understand whether it is a case of non-compliances in the filing of TDS return or no TDS applicable during the quarter. It is not mandatory to file a TDS return where no TDS is applicable.
Filing declaration of NIL TDS helps the tax department to understand TDS return is not applicable due to neither any payment made nor any amount credit where TDS is applicable.
Steps to file NIL TDS statement
Step-1: Login to the TRACES portal
Step-2: Go to the tab ‘Statement / Payment’ and select ‘Declaration for non-filing of TDS Statements’
Step-3: Click on ‘Add Statements’. Fill up the detail relating to the Financial year, Quarter for the concerned financial year (Q1 / Q2 / Q3 / Q4), Form Type (24Q, 26Q, 27Q, 27EQ)
Step-4: Select the reasons for non-filing of TDS Return from the following list and Click ‘Add Statement Details’
- Not liable to deduct for the selected statement period
- No payment made/credited to Deductee
- Temporarily business closed
- Permanently business closed
- Payment below the threshold to the deductee
- Branch shifted
- Any other reasons
Step-5: Select ‘Proceed’ and file declaration as ‘I Agree’. Notification will be sent once the filing is complete.
Is it mandatory to file a TDS Return / TDS Statement?
Section 200(3) of the Income Tax Act read with Rule 31A mandates the responsibility deduction of tax and filing quarterly statement for tax deducted and deposited.
Rule 31A of Income Tax Rules
Every person responsible for deduction of tax under Chapter XVII-B, shall, following the provisions of sub-section (3) of section 200, deliver, or cause to be delivered, the following quarterly statements to the Director-General of Income-tax (Systems) or the person authorized by the Director-General of Income-tax (Systems), namely:
- Statement of deduction of tax under section 192 in Form No. 24Q – TDS on Salary;
- Statement of deduction of tax under sections 193 to 196D in-
- Form No. 27Q in respect of the deductee who is a non-resident, not being a company or a foreign company or resident but not ordinarily resident; and
- Form No. 26Q in respect of all other deductees.
- Form No. 27EQ in respect of Tax collected at Sources.
Section 200(3) of the Income Tax Act
Section 200(3) of the Income Tax Act mentions the following:
(3) Any person deducting any sum on or after the 1st day of April 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorized by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:
Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority.
Implications of Non/ Late filing of TDS Statements:
The implication for Tax Deductors:
In case of late filing of TDS Statements, a fee shall be levied on the deductor u/s 234E of the Act, which reads as under:
Where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
Implication for Taxpayers:
Non/ Late filing of TDS statements results in the TDS Credit not being available to the deductees. They, therefore, will not be able to claim the credit for tax already deducted from the payments made to them. Please note that TDS Certificates will not be available until the TDS Statements are duly filed.
Is it mandatory to file NIL TDS Return?
If there is no tax deducted, then it is not mandatory to file a TDS statement. But, the declaration of the NIL TDS statement helps the deductor to avoid any notice from the tax department.
Can a NIL TDS return be revised or amended?
NIL TDS return once filed, then only one reversal of NIL return is allowed
Can we file the NIL TDS statement if the TDS statement has already been filed?
No. NIL TDS cannot be filed if the TDS statement has already been filed.
I have no transactions during the quarter. Shall we file TDS Statement?
Declaration of NIL TDS statement should be filed to intimate the tax department that there is no TDS case applicable.
Can we file the NIL statement on the TRACES portal?
Yes. There is a feature on TRACES to declare the NIL TDS Statement for the quarter.
Also read TDS RATE CHART FOR FY 2021-22 and TDS NIL RETURN THROUGH TRACES
