Tax Compliance Essentials

📢 Complete Guide to TDS Returns, Filings & Monthly Payment Due Dates (India) Tax Deducted at Source (TDS) is one of the most important compliance responsibilities for businesses, employers, and professionals. Proper deduction, timely payment, and accurate filing of TDS returns help organizations avoid penalties, interest, and legal complications. This detailed guide explains everything you need to know about TDS payment, return filing, due dates, forms, penalties, and best practices in a simple and practical way. ✅ What is TDS? TDS (Tax Deducted at Source) is a system introduced by the Income Tax Department where tax is deducted at the time of making specified payments such as: • Salary • Contractor payments • Professional fees • Rent • Commission • Interest payments The deductor collects tax on behalf of the government and deposits it within the prescribed time. 🎯 Why TDS Compliance is Important Proper TDS compliance ensures: ✔ Avoidance of heavy penalties ✔ Smooth audits & assessments ✔ Claim of expenses allowed under Income Tax ✔ Transparency in financial reporting ✔ Proper credit reflected in Form 26AS 📑 Types of TDS Return Forms Different TDS forms are applicable depending on the nature of payment. FormPurpose24Q Salary Payments26QNon-Salary Payments27Q Payments to Non-Residents27E QTCS Returns ⚠️ Interest & Penalties for Non-Compliance Failure to comply leads to financial consequences: Interest on Late Deduction • 1% per month — If TDS not deducted on time Interest on Late Payment • 1.5% per month — If deducted but not deposited Late Filing Penalty ₹200 per day until return is filed (max up to TDS amount) Additional Penalty ₹10,000 – ₹1,00,000 for serious non-compliance 📈 Step-by-Step TDS Compliance Process 1️⃣ Deduct TDS at applicable rate 2️⃣ Deposit TDS before due date 3️⃣ File quarterly TDS return 4️⃣ Issue TDS certificates (Form 16/16A) 5️⃣ Reconcile with Form 26Q & 26AS 💡 Best Practices for Businesses ✔ Maintain monthly compliance checklist ✔ Use accounting software for auto TDS calculation ✔ Reconcile books with TRACES regularly ✔ Avoid last-minute filing ✔ Keep vendor PAN records updated 🚨 Common Mistakes to Avoid ❌ Wrong PAN of deductee ❌ Incorrect section selection ❌ Late deposit of TDS ❌ Mismatch in return & payment challan ❌ Missing quarterly filings 📌 Pro Tip: Set calendar reminders for the 7th of every month and quarterly filing deadlines to avoid last-minute stress

I am glad to share my latest column in Mint on a subject that impacts almost every taxpayer during the return filing season, the increasing reliance on pre-filled Income Tax Returns (ITR) and the Annual Information Statement (AIS). While these tools have undoubtedly made compliance easier, they are intended to assist taxpayers, not replace their responsibility to verify the correctness and completeness of the information reported. The final responsibility for the return continues to rest with the taxpayer. In the column, I have discussed some of the areas that deserve closer scrutiny before filing a return, including salary and TDS reporting, bank interest, capital gains, and transactions that may not fully appear in AIS. I have also highlighted that AIS should be treated as a useful reconciliation tool rather than a conclusive statement of taxable income. Blind acceptance of pre-filled data can lead to reporting errors, tax notices, and avoidable disputes at a later stage. As tax administration becomes increasingly data-driven, technology will continue to play a larger role in compliance. However, informed review and professional judgment remain equally important. A few extra minutes spent reconciling AIS, evaluating the appropriate tax regime, and verifying deductions can prevent months of correspondence with the tax authorities. 𝗠𝘆 𝗸𝗲𝘆 𝗺𝗲𝘀𝘀𝗮𝗴𝗲 𝗶𝘀 𝘀𝗶𝗺𝗽𝗹𝗲: 𝗿𝗲𝘃𝗶𝗲𝘄 𝗳𝗶𝗿𝘀𝘁, 𝗿𝗲𝗰𝗼𝗻𝗰𝗶𝗹𝗲 𝗰𝗮𝗿𝗲𝗳𝘂𝗹𝗹𝘆, 𝗮𝗻𝗱 𝗼𝗻𝗹𝘆 𝘁𝗵𝗲𝗻 𝗰𝗹𝗶𝗰𝗸 “𝗦𝘂𝗯𝗺𝗶𝘁”. The column is attached for ready reference. #IncomeTax #ITRFiling #AIS #TaxCompliance #DirectTax #TaxAdvisory #CapitalGains #TDS #PersonalFinance #TaxAwareness #Mint

Sometimes Income Tax compliance looks like a very simple question. But the real challenge begins when the answer is not simple. On paper, the law may say one thing. Then comes a notification. Then a circular. Then a High Court judgment. Then a Supreme Court interpretation. Then a portal utility issue. Then a validation error. Then a dropdown that does not match the legal position. Then a text box with character limits. Then an attachment size limit. And finally, the taxpayer asks: “Sir, correct option kaunsa hai?” This is the real difficulty of tax practice. Income Tax is not only about reading the Act. A practical tax professional has to reconcile multiple layers at the same time: The Act gives the legal foundation. Notifications modify or operationalise the law. Circulars explain the department’s interpretation. Court orders clarify, expand, restrict, or sometimes completely change the understanding. The Income Tax Portal adds its own practical challenges. And the software/utility provider has its own validation rules, formats, restrictions, and technical behaviour. So many times, the real issue is not whether the professional knows the law. The real issue is: How to convert the correct legal position into a portal-acceptable response. How to protect the taxpayer’s position without over-explaining. How to draft a reply that works today before the AO, and also survives tomorrow before CIT(A), ITAT, or High Court. How to handle a situation where the law allows something, but the portal does not easily accept it. This is why tax compliance and tax litigation require more than copy-paste drafting. It requires legal reading, practical experience, portal understanding, and strategic drafting. Because in tax practice, the question may look simple. But the answer is often hidden between law, interpretation, technology, and procedure. Simple question. Complex ecosystem. That is the reality of modern Income Tax practice.

📌 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐄𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧 ≠ 𝐅𝐢𝐥𝐢𝐧𝐠 𝐄𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧 — 𝐋𝐞𝐭’𝐬 𝐅𝐢𝐱 𝐓𝐡𝐢𝐬 💡 One of the most common misconceptions in the Nigerian tax space is this:“𝑰𝒇 𝒎𝒚 𝒄𝒐𝒎𝒑𝒂𝒏𝒚 𝒊𝒔 𝒆𝒙𝒆𝒎𝒑𝒕 𝒇𝒓𝒐𝒎 𝒊𝒏𝒄𝒐𝒎𝒆 𝒕𝒂𝒙, 𝑰 𝒅𝒐𝒏’𝒕 𝒏𝒆𝒆𝒅 𝒕𝒐 𝒇𝒊𝒍𝒆 𝒓𝒆𝒕𝒖𝒓𝒏𝒔.” That assumption is wrong and the Nigeria Tax Administration Act says so clearly. ⚠️ The Misconception Many small businesses and other entities enjoying income tax exemption (for example, not-for-profit organisations) believe that exemption automatically removes their compliance obligations. In practice, this often leads to a complete failure to file annual returns or prepare financial statements for tax purposes. 📖 “𝐖𝐡𝐚𝐭 𝐭𝐡𝐞 𝐋𝐚𝐰 𝐀𝐜𝐭𝐮𝐚𝐥𝐥𝐲 𝐒𝐚𝐲𝐬 Section 11 of the Nigeria Tax Administration Act is unambiguous: Every company whether taxable or not must file a self-assessment return at least once every year, with or without notice from the Service. This means that income tax exemption does not excuse you from filing. The obligation to file exists independently of whether tax is payable. 🧾 What Must Be Filed The law goes further to specify what the return should contain: 👉A completed self-assessment form 👉Financial statements (audited, or attested statements, (simple statement of affairs) for small companies) 👉Tax and capital allowance computations 👉Evidence of tax payment (where applicable) 👉Effective tax rate computation (if applicable) 👉A formal attestation signed by a principal officer In short, the filing requirement is comprehensive, not optional. ⏳ When Should the Filing Be Done? The Act also prescribes clear timelines for filing: For an existing company that has been in business for more than 18 months: not later than six months after the end of its accounting year For a newly incorporated company: within 18 months from incorporation or not later than six months after the end of its first accounting period, whichever comes earlier This timeline is critical, and companies should track it closely to avoid late filing penalties. 🚨 Why This Matters Failure to file even where no tax is due exposes companies to penalties, regulatory scrutiny, and unnecessary disputes with the tax authority. Compliance is not just about paying tax; it is about meeting statutory obligations in full. 🎯 Final Thought Being exempt from income tax is a relief, but it is not a free pass from compliance. If your business falls into this category, the real question is simple: Are you filing your returns as required l or relying on a misconception? I will continue to address more practical issues in subsequent posts. Feel free to share or drop your comments. 🙏 Stay connected. Reshare, follow, and connect with Olamide Olaniran ACA for more insights. 🛡 Disclaimer: These write-ups reflect my personal views and do not constitute professional advice. Please seek tailored advice for your specific circumstances.

𝗜𝘁’𝘀 𝘁𝗵𝗮𝘁 𝘁𝗶𝗺𝗲 𝗼𝗳 𝘁𝗵𝗲 𝘆𝗲𝗮𝗿 𝗮𝗴𝗮𝗶𝗻 𝗳𝗼𝗿 𝘆𝗼𝘂 𝘁𝗼 𝗳𝗶𝗹𝗲 𝘆𝗼𝘂𝗿 𝗜𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗧𝗮𝘅 𝗥𝗲𝘁𝘂𝗿𝗻, 𝗮𝗻𝗱 𝗶𝘁'𝘀 𝗻𝗼𝘁 𝗼𝗽𝘁𝗶𝗼𝗻𝗮𝗹.⚠️ Part 1/4 ✅ 𝗪𝗵𝗼'𝘀 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗱 𝘁𝗼 𝗳𝗶𝗹𝗲? If you're an individual who earned income in Nigeria in 2025, the Nigeria Tax Administration Act mandates you to file an annual income tax return. ▪️Not just business owners. ▪️Not just high earners. ▪️Not just persons with tax to pay.... but everyone who earned income in the past year. ✅ 𝗪𝗵𝗮𝘁 𝗮𝗯𝗼𝘂𝘁 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀? Here's what many get wrong 👇 “My employer already deducted PAYE tax from my salary, so I’m fine.” No, you're not❌ Your individual tax return is your own separate obligation. ✅ 𝗙𝗮𝗶𝗹𝘂𝗿𝗲 𝘁𝗼 𝗳𝗶𝗹𝗲 This attracts a general penalty of: 🚨 ▪️ ₦100,000 — for the first month of default ▪️ ₦50,000 — for each subsequent month you fail to file ✅ 𝗙𝗼𝗿𝗺𝗮𝘁 𝗮𝗻𝗱 𝗖𝗼𝗻𝘁𝗲𝗻𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗿𝗲𝘁𝘂𝗿𝗻? While the format is determined by each tax authority, the content generally includes the following: ✔️ Self-assessment form/e-form (as determined by each tax authorities) ✔️ Details of Income from all sources ✔️ Evidences of Reliefs claimable ✔️ Tax computation (when there are other income sources apart from employment) ✔️ Financial reports (For individuals into businesses) ✔️ Evidence of tax payment ✅ 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆 Engage a Tax Professional if you need guidance, especially if you earned business income. #Tax #Taxation #TaxInsightSeries #TaxCompliance #IndividualTax #TaxReturns

4 Major Tasks to Prioritise as business owners and accountants this January - NG For business managers ans accountants, January is an important month for ensuring compliance with a couple of regulatory requirements. To keep this short, I have highlighted 4 key tasks to prioritise before the month ends: 1. PAYE Returns Filing and Additional Payments 📌 Ensure your PAYE returns are filed by 31st January 2025 to avoid penalties under the Personal Income Tax Act. Currently, the penalty is ₦500,000 for corporate bodies, and ₦50,000 for individuals and enterprises. 📌 Pay any outstanding business premises levy and development levy, depending on your state’s requirements. 📌 Keep all return task remittance schedules handy, as they might be required for uploading during PAYE returns filing. 2. VAT Reconciliation (VAT Throughput) 📌 Verify that you have remitted the correct amount of VAT for the financial year ended December 2024. 📌 For service-based businesses, remember: Input VAT claims are not allowed. You done have to charge VAT on reimbursable cost that form part of your sales invoice. 📌 For manufacturers/other businesses claiming input VAT, review your VAT balances: Ensure you’ve settled all VAT liabilities for the year to avoid penalties and interest during audits. Only VAT due for December should be payable in January 2025. If not, do a throughput for the FY and remit the balance this January. 3. Withholding Tax (WHT) Checks 📌 Conduct a thorough ledger review and perform sample checks: You can apply specific rates on ledgers to sample the expected withholding tax payable vs paid. If discrepancies are found, review critically to avoid exposure during tax audits. 📌 Confirm that all transactions are accurately posted. 📌 Consolidate non-business-related expenses for the year into one place. This will simplify treatment during tax calculations, as scattered entries can complicate allocation. 4. Corporate Income Tax Preparation 📌 Ensure your books are clean, accurate, and ready for corporate income tax filing. I encourage companies to act on the above points promptly to avoid penalties and interest from delays or oversights. Of course, there a lot to be done, but by prioritising these tasks, you position your business for compliance and reduce risks of penalties during audits. Don’t wait—get started now! I remain your brother, Richard. Feel free to share with us how you’ve position your company to meet all the above. Also what are the other areas companies should watch out for? Let’s have it.

FTA Requests Post-Filing Clarifications on Corporate Tax Returns The Federal Tax Authority (FTA) has started issuing clarification requests after Corporate Tax return submissions, seeking additional details and supporting documents to verify the accuracy of filed information. Recent FTA requests have included: 🔹 Corporate structure showing all branches and locations 🔹 Justification for unaudited financial statements or missing comparative figures 🔹 Full trial balance (with opening, movement & closing balances) 🔹 Detailed account ledgers reconciling with the trial balance 🔹 Employee list with names, salaries, and benefits (with proof) 🔹 Sales reports by project with cost and profit margins 🔹 Bank statements for the relevant year 🔹 Connected person disclosure 💡 Key takeaway: Submitting your Corporate Tax return is not the end of compliance — it’s just the beginning. Be prepared to: ✅ Maintain organized, reconciled, and auditable records ✅ Ensure financial statements and ledgers align with filed returns ✅ Keep supporting schedules and justifications ready for review ✅ Respond promptly and accurately to any FTA request The FTA’s recent actions reinforce the importance of continuous compliance, robust internal controls, and detailed record-keeping beyond filing deadlines. Now is the time for businesses to: 🔸 Strengthen documentation practices 🔸 Review internal accounting processes 🔸 Ensure readiness for any post-filing FTA clarification Compliance is not a one-time task — it’s an ongoing commitment to transparency and accuracy. Kiritharan Shanmugarajah #UAE #CorporateTax #FTA #TaxCompliance #TaxAudit #FinanceUAE #TaxUpdate #CorporateGovernance #TaxConsulting #CorporateTaxUAE