How to Use Sandbox TDS APIs to manage TDS Compliance?
Sandbox has Two sets of APIs related to TDS: namely — TDS Business APIs, and TDS Compliance APIs. Using both of these APIs, businesses can manage their end-to-end TDS Compliance. So let’s look at how these APIs work together and how you can integrate them into your workflow.
This blog is divided into three sections:
- Section 1 — introduces the compliance requirements under TDS.
- Section 2— discusses the common TDS compliance workflow that Sandbox clients constantly use.
- Section 3— we deep dive into the TDS APIs, understanding the API requirements and responses.
Section 1 — TDS Compliance Requirement
If you are already aware of TDS requirements, feel free to skip the first section.
What is TDS?
TDS or Tax Deducted at Source is levied on transactions related to payments of income. For example transactions such as payment of a commission, payments to contractors, professional fees, salary, rent, etc can come under the TDS levy.
In such transactions, the person receiving the income receives the income with the TDS deducted and is called the deductee. Similarly, the person paying the income withholds the TDS tax and is called the deductor.
Who should deduct TDS?
The deductor is liable to withhold TDS on applicable transactions and is also liable to deposit the TDS with the Income Tax Department.
However, the above rule is not applicable if the deductor is an individual or HUF and if their books are not required to be audited by the Income Tax Department. An exception to the previously mentioned rule is if the Individual or HUG pays rent greater than 50 thousand INR.
What after deducting TDS?
Importantly, The TDS withheld by the deductor must be deposited to the ITD by the 7th of the subsequent month. This is done using Challan ITNS-281 on the ITD portal.
Another requirement is that every deductor who has withheld TDS must file TDS Returns in a quarterly fashion. The TDS return provides information regarding the transactions on which TDS was applicable.
Section 2 — Managing TDS using Sandbox
As we discussed above, the deductors have to make sure that they:
- deduct TDS correctly,
- collect information on such transactions,
- deposit the withheld TDS to the government, and
- file TDS returns in a quarterly manner.
Now the question is how does one manage all the four steps?! Sandbox TDS APIs are therefore here to help you with it all.
How to use Sandbox’s TDS API to automate TDS Compliance?
The Sandbox — TDS Business and Compliance APIs can be used together to create an end-to-end TDS compliance workflow. Here is a step by step process of how to do so:
Step -1 | Manage TDS Data
The TDS Business API manages all your transactions and deductee details. It is a connection to your Quicko TDS account. Using the Business APIs you can store information related to Deductor, Deductee, Payments, Challans, and Salary Details. The information collected is crucial for the Deductor to understand and manage their TDS Compliance requirements.
Step -2 | Generate TDS Returns (TXT)
The data collected in Step 1 using Business API allows the user to generate accurate TDS Returns. The user, on a quarterly basis, can then download TXT file for Form 24Q, Form 26Q, and Form 27Q.
Step -2 | Generate TDS Return (FVU)
Once the TXT file is ready, the user needs to use the “Income Tax Department’s TDS Utility” to then convert the file into an FVU file. It is important to note that only the ITD utility has the authority to create this FVU file. Again, as only the ITD utility has the ability to create the FVU file, Quicko or Sandbox does not interfere with this process.
Step-4 | eFile TDS Return
Once you have generated the FVU file you can then feed it to the Sandbox TDS Returns API and it will upload, in other words, eFile the TDS return for you.
Step 5 | eFile TDS Confirmation
Once the user has eFiled the TDS using Sandbox APIs, he can always confirm the status of the filing using Sandbox eFile Status API. This step helps the user to make sure on any given date, the status of his TDS filings.
Contact us to get started!
Section 3 — TDS API deep dive
In the previous section, we discussed the workflow. In this section, lets deep-dived into the individual Sandbox TDS APIs. So as to illustrate the input parameters and response structures of these APIs.
TDS APIs are grouped into Business and Compliance APIs. Let’s look at what these APIs have to offer:
3.1 Sandbox TDS Business APIs
TDS Business APIs allow you access to your Quicko TDS Account where you can manage the data related to your business and transactions.
The information that you input using these Business APIs is necessary to manage your TDS requirements.
You can manage the data in the following manner:
- First, the deductor details can be managed using the Payer API.
- Second, deductee details can be managed using Payee API.
- Similarly, challans and payment details can be managed using the Challans API and Payments API, respectively.
- TDS is also applicable on Salary Payments. Therefore, the Salary details API is used to manage the TDS aspect of such transactions.
Once the information is fed in, using the Business Analytics API, you can
- Calculate monthly challans,
- Download txt file for Form 24Q, Form 26Q, and Form 27Q for all 4 quarters
3.2 Sandbox TDS Compliance APIs
There are two main TDS Compliance APIs: Search TAN API and TDS Return API. Look at how they work below:
3.2.1 Search TAN API
Sandbox’s Search TAN API to provide detailed information on specific TAN. The input would be the TAN number and the response would provide you with:
- Category like “Company/Firms/AOP/BOI/AJP/AOP(Trust) and Branches”,
- Name of TAN entity,
- Address of the TAN entity,
- PAN number connected to the TAN
- Status: whether Active or Not.
- Email of TAN entity.
3.2.2 Returns API (AKA “TIN FC API”)
Using the Sandbox Returns API the user can :
1) Efile TDS
The E-File TDS API accepts quarter-wise FVU files for Form 24Q, Form 26Q, and Form 27Q. And using TIN Facilitation Centre the Sandbox API e-files your TDS return is e-filed.
Note: FVU File is obtained from the ITD Utility by providing the text file and CSI file of the TDS return.
2) Get eFile Status
You can call Get eFile Status API to check the TDS Return eFiling status. It could return that the filing was successful, queued, or failed.
3) e-Verify TDS Return
This endpoint allows you to e-verify your TDS Return by providing the scanned Form27A. It takes E-File job id as an input along with the PDF of Form27A. Similar to E-File, it queues a JOB and returns a new job id for the same.
4) Get the e-verify status of the TDS Return.
Accepts a job id (generated during the e-Verify job) and returns the current execution status for that particular job.
Conclusion
The Sandbox TDS APIs enable TDS Compliance and provides the flexibility to create workflows most meaningful for individual businesses.
In addition to TDS — GST, ITR, and MCA APIs can greatly enhance the compliance workflows for our customers.
You can pick and choose the APIs that interest you the most. This is the reason why all our APIs are accessible once you subscribe to Sandbox!
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