Overview
Tax Deducted at Source (TDS) is a system introduced by the Income Tax Department of India to ensure tax collection at the source of income generation. It requires the payer (deductor) to deduct a specified percentage of tax before making payments such as salary, rent, commission, professional fees or interest and deposit it with the government.
TDS return filing is the process by which deductors report the details of TDS collected and deposited. Filing TDS returns ensures compliance, smooth credit of TDS to the recipient and prevents penalties.
Why File TDS Returns?
- Legal Obligation: Mandatory for all deductors under the Income Tax Act, 1961.
- Avoid Penalties: Non-filing attracts penalties and interest.
- Transparency: Helps the government track income and taxes paid.
- Seamless Credit: Beneficiaries can claim TDS credit in their ITR.
- Compliance Record: Builds trust and credibility with stakeholders.
Process of TDS Return Filing
- Collect Required Information: Deductor gathers details of deductee, amount paid and tax deducted.
- Deposit TDS: Payment must be made to the government within prescribed deadlines.
- Prepare TDS Return: Using Form 24Q, 26Q, 27Q or 27EQ depending on the type of payment.
- Validate File: Use File Validation Utility (FVU) provided by NSDL.
- Submit Return: Upload the validated file on the TIN-NSDL portal or through authorized intermediaries.
- Generate Acknowledgement: TRACES portal provides Form 16/16A to deductees.
Types of TDS Returns
- Form 24Q – TDS on salary.
- Form 26Q – TDS on all payments (except salary and non-resident payments).
- Form 27Q – TDS on the payments made to non-residents.
- Form 27EQ – TCS (Tax Collected at Source) return.
Documents Required for TDS Return Filing
- TAN (Tax Deduction and Collection Account Number) of the deductor.
- PAN details of deductor and deductees.
- Details of TDS challans (BSR code, date of deposit, challan serial number and amount).
- Details of payment made and tax deducted.
- Form 16/16A (TDS certificates).
Benefits of Filing TDS Returns
- Legal compliance with tax regulations.
- Avoid penalties and late fees.
- Ensures deductees get credit for tax deducted.
- Smooth business operations with no legal hurdles.
- Transparency and trust with employees, vendors and stakeholders.
Timeline for TDS Return Filing
TDS returns are filed quarterly, but the exact due dates differ depending on the form (24Q/26Q/27Q) and official notifications. Below is the commonly accepted schedule for FY 2025–26:
| Quarter | Period | Due Date for Form 24Q (Salary) | Due Date for Form 26Q/27Q (Other Payments) |
| Q1 | April – June | 31 July | 15 July |
| Q2 | July – September | 31 October | 15 October |
| Q3 | October – December | 31 January | 15 January |
| Q4 | January – March | 31 May (for Form 24Q) | 15 May (for Form 26Q/27Q) |
Note: Always check the official Income Tax Department calendar or TRACES portal, as the deadlines are subject to government notifications.
Fee and Penalty for Late Filing
- Late Fee (Section 234E): ₹200 per day until return is filed (not exceeding TDS amount).
- Penalty (Section 271H): ₹10,000 to ₹1,00,000 for non-filing, incorrect details or delay.
- Interest: Applicable for delay in TDS payment (generally 1% per month for late deduction and 1.5% per month for late deposit).
FAQs
Non-deposit of TDS is considered a serious default. The deductor may face interest, penalties, disallowance of expenses and even prosecution under the Income Tax Act.
No. PAN of the deductee is mandatory. If PAN is not provided, TDS must be deducted at a higher rate (20%) under Section 206AA.
BIN is generated when TDS is deposited through book adjustment (mainly for government deductors) and must be quoted in TDS returns.
Yes. Individuals and HUFs not liable for a tax audit under the Income Tax Act are generally not required to deduct TDS, except in specific cases (e.g., rent above ₹50,000 per month under Section 194-IB or contractual payments above limits under Section 194M).
Yes. Deductors can request challan corrections online via TRACES to rectify errors in BSR codes, challan numbers, dates or amounts.
Deductees can log in to the Income Tax e-filing portal and view Form 26AS or Annual Information Statement (AIS) to confirm TDS credit.
Yes. TDS is deducted only if the payment exceeds specified limits. For example: -
- Salary – taxable income above basic exemption limit
- Professional fees – ₹30,000 per financial year (Sec. 194J)
- Rent – ₹2,40,000 per financial year (Sec. 194I)
- Rent by individuals/HUFs (not under audit) – ₹50,000 per month (Sec. 194-IB)
(Thresholds are subject to amendments under the Finance Act, so always check the latest limits.)
- TDS (Tax Deducted at Source): Deducted by the payer at the time of making certain payments (salary, interest, rent, etc.).
- TCS (Tax Collected at Source): Collected by the seller at the time of receiving specified payments (e.g., sale of scrap, liquor or foreign remittances).
No. Validation through File Validation Utility (FVU) is mandatory before uploading TDS returns on the portal. It ensures accuracy and compliance with prescribed formats.
Yes. Payments to Non-Resident Indians (NRIs) are reported in Form 27Q. Higher rates may apply unless reduced by a Double Taxation Avoidance Agreement (DTAA), provided the NRI submits valid documents (like Tax Residency Certificate).
.jpg)
.jpg)
.webp)
