Entities (both corporate and non-corporate deductors) making payments (specified under Income Tax Act) to third parties (deductees) are required to deduct tax at source (Tax Deducted at Source -TDS) from these payments and deposit the same at any of the designated branches of banks authorised to collect taxes on behalf of Government of India. They should also furnish TDS returns containing details of deductee(s) and challan details relating to deposit of tax to ITD.

As a part of automation of collection, compilation and processing of TDS returns ITD has notified an Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003". It is applicable to all deductors furnishing their TDS return in electronic form. As per this scheme:

• It is mandatory (w.e.f. June 1, 2003) for corporate deductors to furnish their TDS returns in electronic form (eTDS return).
• From F.Y. 2004-2005 onwards furnishing TDS returns in electronic form is also mandatory for government deductors in addition to corporate deductors.
• Deductors (other than government and corporates) may file TDS return in electronic or physical form.
• National Securities Depository Ltd. (NSDL) as the e- TDS Intermediary (appointed by ITD) receives, on behalf of ITD, the eTDS returns from the deductors.

Deductors can submit eTDS returns through TIN-Facilitation Centres (TIN-FC) established by NSDL or directly upload through NSDL web-site.

E-TCS

TCS means collection of tax at source by the seller (collector) from the buyer (collectee/payee) of the goods (specified u/s 206C of Income-tax Act, 1961, like timber obtained under forest lease, scrap, any other forest produce not being timber or tendu leaves etc.,). For e.g. if purchase value of goods is Rs.10,000/-, the buyer will pay an amount of Rs.10,000/- + X (X being the value of TCS as prescribed under Income-tax Act, 1961) to the seller. The seller will deposit the tax collected at source (TCS) at any of the designated branches of the authorized banks.

Following the automation of TDS returns in 2003, ITD has now notified an "Electronic Filing of Returns of Tax Collected at Source Scheme, 2005 . It is applicable to all deductors furnishing their TCS return in electronic form. As per this scheme:

• It is mandatory for corporate and government deductors to furnish their TCS returns in electronic form (e-TCS return) from F.Y. 2004-2005 onwards.
• Deductors (other than government and corporates) may file TCS return in electronic or physical form.
• NSDL as the e-TCS Intermediary (appointed by ITD) receives, on behalf of ITD, the e-TCS returns from the deductors.

Control Chart

Deductors furnishing eTDS/ e-TCS returns are required to furnish a control chart - Form 27A/ 27B in physical form along with the eTDS/e-TCS return furnished in CD/floppy.

Form 27A is a summary of TDS return (Form 24, 26 or 27), which contains control totals of 'Amount Paid' and 'Income tax deducted at source'. Form 27B is a summary of e-TCS return (Form 27E) which contains 'Amount Paid' and 'Income Tax Collected at Source'. The control totals mentioned on Form 27A/ 27B should match with the corresponding control totals in eTDS/e-TCS return file. Form 27A is required to be furnished separately for each TDS return (Form 24, 26 or 27). Form 27B is required to be furnished separately for each TCS return (Form 27E)