How to e-File TCS Returns in India?

Are you getting stressed about how to e-file TCS returns? Do not worry! You are not alone. Various businesses and sellers find this process challenging while managing to fill it within the strict deadline and set rules by the Income Tax Department.

While e-filing might sound technical and tricky, it has become way easier through the online portal provided by the department. Whether you are a beginner or just want to refresh your learning to file TCS returns, this step-by-step guide will help you to understand this process easily.

Now, let’s dig into the details and understand what e-File TCS returns are and how you can easily file TCS Returns.

What is e-File TCS Returns, and Why is it Important?

TCS is a tax collected at source, a tax amount paid by a buyer to a seller on certain items such as minerals, toll plazas, liquor, etc. It is collected from the buyers during the purchase and deposited to the government by the 7th of the following month. Additionally, TCS is required to file returns every quarter to report the details of the collected and deposited amount of tax.

The process is called e-filing TCS Return, which is entirely done through online portals provided by the Income Tax Department.

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E-Filing is crucial to ensure that the collected tax is accurate and up to date. Moreover, the buyer can also claim credit for the paid amount, as not paying tax on time or providing wrong details can lead to penalties and legal actions.

Suggested Read: TDS vs TCS: Key Differences Every Business Must Know

Step-by-Step Guide to e-File TCS Returns

Step 1: Preparation of TCS Return File

• Start by exploring the website, Tax Information Network of the Income Tax Department (TIN Website).
• Download the Return Preparation Utility (RPU) tool for free.
• Open the tool and select Form 27EQ, used to file the TCS return.
• Fill in the required details such as your TAN, PAN, buyer’s PAN, collected amount, and chalan details.
• Save the file in .txt format.

Step 2: Validation through File Validation Utility (FVU)

• Download the File Validation Utility tool from the same website to ensure its accuracy.
• Upload the saved file in the FVU tool to check if there is any mistake.
• If the tool shows any errors, you need to go to the previous tool and fix them as suggested.
• Once you have corrected all the mistakes, the tool will give you a final .fvu format file to upload.

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Step 3: Log in to the Income Tax Website

• Go to the Income Tax website.
• If you have an existing account, you can log in with your TAN and password.
• If not, you can register first and then log in.

Step 4: Upload the File

• After logging in, go to e-File – Income Tax Form – e-Pay Tax.
• Select Form 27EQ and the correct quarter.
• Upload the file you got in .fvu format.
• Additionally, verify the upload in either way. Use a Digital Signature Certificate (DSC) or use the Electronic Verification Code (EVC) sent to your phone and email

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Step 5: Download the Acknowledgement

• After successfully uploading the file, you will get a receipt or acknowledgement.
• Download it and keep it safe for proof of your TCS return.

Suggested Read: Top Income Tax Filing Software to Simplify Compliance

Common Mistakes to Avoid While e-Filing TCS Return

1. Entering the Wrong PAN or TAN: Sometimes, people enter the wrong PAN and TAN numbers. This is very basic, but the most crucial factor that can cause rejection. Therefore, double-check the information before saving the file.
2. Filing the Wrong Form: The form to file the TCS return is 27EQ. However, many people get confused and use the wrong form, which leads to rejection. Hence, make sure to choose the right form.
3. Incorrect Challan Details: When entering Challan details, you may enter incorrect information such as BSR code, date, amount, or Challan number. Thus, it is vital to ensure that you are entering correct information.
4. Filing after the Due Date: Filing the TCS return before the deadline is another important thing. If you failed to file it before the time, you may face penalties or interest on the tax collected. Thus, make sure to file it every quarter, usually before the 15th of every month.
5. Not Verifying the Return: In step 4, forgetting to verify your return through DSC or EVC will be marked as an incomplete TCS return process. So, ensure that after you upload the .fvu file on the website, you need to verify your return through any of the ways.

Suggested Read: Quarterly Compliance Calendar for Indian Businesses

Penalties for Non-Compliance in e-Filing TCS Returns

Failing to file your TCS return or filing it late can lead you to pay late fees and penalties under the Income Tax Act. Let’s discuss some penalties for non-compliance and what you must know:

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• Late Filing Fee: You need to pay ₹200 per day of delay under section 234E. The maximum amount of the late fee cannot exceed the TCS payable. For example, the tax payable is ₹2,000, and you are late in filing a return for 20 days, then the late filing fee would be ₹200 × 20 days = ₹4,000. Since the fee cannot exceed the TCS payable amount, you only have to pay ₹2,000.
• Penalties for Incorrect or Non-Filing: If you have provided wrong information or did not file the return within the due date, you must pay a penalty under 271H. In this case, the minimum penalty will be ₹10,000 and the maximum would be ₹1,00,000. This penalty is in addition to the late fee.
• Interest on Late Deposit: You will get charged 1% per month or part of a month from the date of collection to the date it is actually paid to the government under section 206C(7). Besides, it is separate from the late fee or penalties.

Due Dates for Filing TCS Returns

Tax Collected at Source (TCS) is important to fill out every quarter using the Form 27EQ to avoid late fees and penalties. Even if there is no TCS amount collected by the seller, a Nil Return still needs to be filed.

Quarter	Period Covered	Due Date for Filing TCS Return (Form 27EQ)
Q1	April 1 – June 30	July 15, 2024
Q2	July 1 – September 30	October 15, 2024
Q3	October 1 – December 31	January 15, 2025
Q4	January 1 – March 31	May 15, 2025

Techjockey’s Verdict

Filing TCS Return on your own might seem like a complicated activity at first, but once you are familiar with the process, it becomes easy to perform. The only condition is to provide correct information and the right documents while filing a return using Form 27EQ.

Using reliable income tax software can significantly streamline this process by automating data validation and ensuring accurate submission. These tools often come with built-in checks for common errors and make it easier to manage PAN & TAN details, Challan numbers, and other important data.

If you miss the due dates or submit incorrect information, you may incur penalties and late fees. Therefore, it is essential to stay organized and keep your checklist handy. Make sure to double-check PAN & TAN numbers, Challan number, and other documents before submitting the application.

This practice will help you ensure your business remains aligned with tax laws. Nevertheless, you can always consult a professional to understand the TCS Return process or to help you select the right incometax software for your needs.