TDS Return Filing

TDS Return Filing: complete guide

Introduction

Tax Deducted at Source, or TDS, is a system under which the person making certain payments deducts income tax from the payment itself and deposits it with the government on behalf of the person receiving it. Salaries, contractor payments, professional and technical fees, rent, commission, interest, payments for the purchase of property and many other payments are covered. The recipient later claims credit for the tax deducted when filing their own income tax return. TDS spreads tax collection across the year and gives the Income Tax Department a detailed trail of income paid across the economy.

Deducting and depositing the tax is only half of the obligation. Every deductor must also file a quarterly TDS return, a statement that reports each deduction made during the quarter, the PAN of each deductee, the amount paid, the section under which tax was deducted, the rate applied and the challan through which it was deposited. The data in these returns flows into each deductee's annual tax statement, which is how employees, contractors, landlords and professionals get credit for the tax deducted from their income. If a return is late or wrong, the deductee may not see their credit, and the deductor may face late fees, interest, penalties and demands.

Separate return forms are used for different payments. Under the Income-tax Act, 1961, Form 24Q covers TDS on salaries, Form 26Q covers TDS on payments other than salary to residents, Form 27Q covers payments to non-residents, and Form 27EQ covers tax collected at source. From 1 April 2026, the Income-tax Act, 2025 has replaced the 1961 Act for payments made on or after that date, with TDS provisions renumbered and consolidated and the statement forms revised under the new rules. Returns for quarters up to March 2026 continue under the old law and forms. Deductors filing in the current year therefore need to apply the correct law and form to each period.

Professional help matters because TDS returns are data-heavy and unforgiving. A single wrong PAN, a challan matched to the wrong section, a missing lower deduction certificate or a rate applied incorrectly can produce a default notice, a short deduction demand or a deductee complaint. Our team reviews your deductions each quarter, checks rates and sections, matches challans, prepares and validates the return, files it before the due date, issues TDS certificates and handles correction statements and default notices on the department's TDS reconciliation portal. This page explains who needs this service, the legal requirements, the process, the documents, the timeline, our fee and what follows after each filing.

Who Needs It

Every person who is required to deduct tax at source and holds a Tax Deduction and Collection Account Number, known as TAN, must file TDS returns. This commonly includes:

• Companies and LLPs. All companies and LLPs that pay salaries, contractor fees, professional fees, rent, interest, commission or other covered payments.
• Partnership firms. Firms making payments covered by the TDS provisions, including salaries to employees and fees to contractors.
• Proprietors and individuals liable to tax audit. Individuals and Hindu Undivided Families whose business or profession was subject to tax audit in the previous year must deduct TDS on many business payments.
• Employers of any kind. Any employer paying salary above the exemption level must deduct TDS on salary and file the salary return each quarter.
• Trusts, societies and educational institutions. Non-profit bodies that pay salaries or make other covered payments.
• Government offices and public sector bodies. These deductors have specific procedures, including book adjustment for some deposits.
• Businesses paying non-residents. Any person paying interest, royalty, fees for technical services or other sums chargeable to tax to a non-resident must deduct tax and file the non-resident return.
• Sellers collecting TCS. Businesses that collect tax at source on specified sales, such as scrap, certain minerals, motor vehicles above the limit or overseas remittances, must file the TCS return.

Individuals who are not liable to tax audit but deduct TDS on specific transactions, such as purchase of immovable property or high-value rent, generally use a simpler challan-cum-statement and do not need a TAN. We check which reporting route applies to you.

Key Benefits

• Avoiding late fees and penalties. Filing on time avoids the late fee charged for each day of delay and the penalty that can be levied for not filing or filing incorrect returns.
• Correct credit for deductees. Employees, contractors and landlords see their TDS in their annual tax statement only after the return is processed. Accurate filing prevents complaints and disputes.
• Allowance of expenses. Under the income tax law, part or all of certain expenses can be disallowed if TDS was not deducted or, after deduction, was not paid within the time allowed. Proper compliance protects these deductions.
• Fewer default notices. Careful validation of PANs, sections, rates and challans reduces short deduction, short payment and interest demands from the TDS processing centre.
• Timely TDS certificates. Correct returns allow you to download and issue Form 16 to employees and Form 16A to other deductees within the due dates.
• Clean records for audits. Tax auditors, statutory auditors and investors review TDS compliance. Complete quarterly records reduce audit qualifications.
• One partner for all forms. We handle salary, non-salary, non-resident and TCS returns together, so your compliance is consistent.

How a quarter works in practice. During each month, you deduct TDS while paying or crediting the amount, whichever is earlier, and deposit it by the seventh of the following month, with tax deducted in March allowed until 30 April. At the end of the quarter, the deductions and challans are compiled into the return, which is validated through the department's file validation utility and filed online. The TDS processing centre then matches every entry with the challans and PAN database, and issues a processing statement showing any defaults. Certificates are downloaded from the reconciliation portal and issued to deductees.

Old law and new law. For payments made up to 31 March 2026, deduction, deposit and reporting follow the Income-tax Act, 1961 and its rules. For payments made from 1 April 2026, the Income-tax Act, 2025 applies, with new section references, a tax year in place of the previous year and assessment year, and revised forms. The basic concepts of deduction, deposit, quarterly reporting and certificates continue. We map your payment categories to the correct provisions under each law.

Eligibility and Legal Requirements

The key legal requirements for TDS returns are:

• TAN. Every person required to deduct or collect tax at source must obtain a TAN and quote it in every challan, return and certificate. Deductors without a TAN cannot file regular TDS returns.
• Deduction at the correct rate. Tax must be deducted at the rate prescribed for each type of payment, subject to thresholds. Where the deductee does not furnish a valid PAN, a higher rate generally applies. Where the deductee holds a lower or nil deduction certificate, the rate in the certificate applies.
• Deposit within time. TDS must be deposited by the seventh of the following month, except for March, where the date is 30 April, with special rules for government deductors.
• Quarterly returns. Returns must be filed for each quarter, generally by 31 July for April to June, 31 October for July to September, 31 January for October to December, and 31 May for January to March. These dates may be changed by notification, and we check the current dates each year.
• Return forms. Salary payments, payments to residents, payments to non-residents and tax collected at source are reported in separate forms, as prescribed under the applicable law.
• Interest for default. Interest is payable for failure to deduct, at a monthly rate from the date the tax was deductible to the date of deduction, and at a higher monthly rate for failure to deposit after deduction, from the date of deduction to the date of deposit.
• Late fee. A late fee is charged for each day of delay in filing the return, subject to a cap equal to the amount of TDS, and must be paid before the return is filed.
• Penalty. A penalty can be levied for failure to file the return or for filing incorrect information, within the range set by law. Penalty may not be levied if the tax, interest and late fee are paid and the return is filed within one year from the due date, subject to conditions.
• TDS certificates. Form 16 for salary must be issued annually by the due date after the year end, and Form 16A for other payments must be issued quarterly within fifteen days of the due date of the return. The new law prescribes corresponding certificates for later periods.
• Correction statements. Errors can be corrected by filing a correction statement online, within the time allowed by the rules.
• Non-resident payments. Payments to non-residents may also require certificates from an accountant and online forms under the rules before the remittance, in addition to the TDS return.

TDS rates, thresholds, forms and due dates change frequently through the Finance Act, the new Income-tax Act, 2025 and notifications. We check the current position at the time of each filing.

Step-by-Step Guide

1. Initial onboarding. We understand your business, the types of payments you make, the number of employees and vendors, your TAN and the returns you have filed so far. We also check for any pending defaults or notices.
2. Mapping payments to sections. We map each type of payment, such as salary, contract work, professional fees, rent, commission and interest, to the correct TDS provision, rate and threshold under the applicable law.
3. Monthly deposit support. Where included in your engagement, we review the monthly deduction working and help you prepare the challan so tax is deposited by the due date.
4. Collecting quarterly data. At the end of each quarter, we collect payment details, deductee PANs, challan details and any lower deduction certificates or declarations from deductees.
5. PAN and challan validation. We verify deductee PANs, check that challans are correctly matched to sections and amounts, and confirm that the challan status is available in the department's records.
6. Preparing the return. We prepare the return in the prescribed format for each form required, such as salary, non-salary residents, non-residents or TCS.
7. Validation and filing. The return is validated through the department's file validation utility, and any errors are fixed. We then file the return online with your digital signature or electronic verification, or through an authorised channel.
8. Processing statement review. Once the return is processed, we download the processing statement and check for defaults such as short deduction, short payment, late payment interest or late filing fee.
9. Issuing certificates. We download Form 16A each quarter and Form 16 annually, or the corresponding certificates under the new law, and share them for issue to deductees.
10. Corrections and notices. Where defaults are reported or a deductee's PAN or amount was wrong, we prepare and file correction statements and help you pay any interest or fee due, so the default is closed.

Documents Checklist

The exact list depends on your deductions. Our team will confirm what applies before each filing.

Deductor details:

• TAN and PAN of the deductor
• Name, address and contact details of the deductor and the person responsible for deduction
• Login details for the income tax portal and the TDS reconciliation portal, or details to create them
• Digital Signature Certificate of the responsible person, where used for filing

For salary returns:

• List of employees with PAN, designation and date of joining or leaving
• Monthly salary details and TDS deducted for each employee
• Employee declarations of investments and deductions, where the old tax regime is chosen
• Details of perquisites, allowances and exemptions
• Previous employer salary details for new joiners, where provided

For non-salary returns:

• List of vendors, contractors, professionals and landlords with PAN and address
• Invoices or payment details with the date of payment or credit
• Nature of payment and section applied
• Lower or nil deduction certificates issued by the department, where applicable
• Declarations from deductees for non-deduction, where permitted

For non-resident returns:

• Details of non-resident payees with PAN or alternative details allowed under the rules
• Tax residency certificates and declarations, where treaty rates are applied
• Accountant certificates and online remittance forms, where required

Challan details:

• Challan identification numbers, date of deposit, amount and bank details for each payment
• Details of interest and late fee paid

How Long It Takes

A regular quarterly TDS return is usually prepared and filed within 3 to 5 working days from the date we receive complete data. The timeline depends on:

• Data collection and review: one to two working days, depending on the number of deductees and the quality of payment records.
• PAN and challan validation: usually one working day, longer if PANs are invalid or challans need correction with the bank or the department.
• Preparation and filing: usually one working day once data is final.
• Processing by the department: returns are usually processed within a few weeks, after which defaults, if any, are shown in the processing statement.
• Certificates: Form 16A can be downloaded once the return is processed, and Form 16 after the fourth quarter return is processed.
• Correction statements: usually filed within a few working days of identifying the error, followed by fresh processing.

We recommend sharing data soon after each quarter ends, so the return is filed well before the due date.

Pricing

Our professional fee for TDS Return Filing is ₹2,999/qtr.

This fee covers, for each quarter:

• Review of deductions and mapping of payments to sections and rates
• Validation of deductee PANs and challan details
• Preparation and validation of the TDS return for one TAN
• Filing of the return within the due date, once complete data is received
• Review of the processing statement and an explanation of any defaults
• Download and sharing of TDS certificates for the quarter

TDS itself, along with any interest and late fee, is payable to the government at actual and is not part of our professional fee. Additional return forms for the same quarter, a high number of deductees, monthly deposit support, correction statements for earlier periods, lower deduction certificate applications and responses to notices are quoted separately where needed.

Common Mistakes to Avoid

• Wrong or missing PAN. An invalid PAN can lead to a demand at a higher rate and prevents the deductee from getting credit. We verify every PAN before filing.
• Wrong section or rate. Treating professional fees as contract payments, or applying the wrong rate, leads to short deduction demands.
• Challan mismatches. Depositing tax under the wrong section code, assessment year or tax year, or wrong minor head can cause the return to show short payment.
• Late deposit. Tax deducted but deposited late attracts interest at a higher rate and may lead to disallowance of the expense.
• Ignoring thresholds and aggregation. Some TDS provisions apply when payments to one person cross a limit in a year. Tracking only single payments can miss the point at which deduction becomes due.
• Not using lower deduction certificates correctly. Applying a lower rate without a valid certificate, or after its limit has been exhausted, causes defaults.
• Filing late. The late fee runs daily until the return is filed. Even a short delay adds up.
• Not checking processing statements. Defaults remain open until corrected. Ignoring them can lead to recovery from bank accounts or adjustment against refunds.
• Mixing old and new law references. Payments made after 1 April 2026 must be reported under the new law's provisions and forms, while earlier periods follow the old law.

What Happens After

Once a quarterly return is filed, several steps follow:

• Processing statement. The TDS processing centre processes the return and issues a statement. If defaults appear, we review them and advise on payment or correction.
• Issue of certificates. Form 16A must be issued to non-salary deductees within the time allowed after each quarter, and Form 16 to employees after the year end, or the corresponding certificates under the new law.
• Deductee credit. Deductees see the TDS in their annual tax statement once the return is processed, which they use when filing their own income tax returns.
• Correction statements. If you find an error later, such as a wrong PAN or amount, a correction statement can be filed within the time allowed.
• Default notices. If the department issues a notice for short deduction, short payment, interest or late fee, it should be responded to promptly. We help you pay or contest the demand with the right explanation.
• Tax audit reporting. Where your accounts are audited, TDS compliance is reported in the tax audit report, so quarterly accuracy helps the audit.
• Monitoring changes. TDS rates, thresholds and forms may change at the start of each tax year or through notifications, and your payroll and accounts payable systems should be updated.

Our team can provide year-round TDS support, including monthly deposit reminders, quarterly returns, certificates and notice handling, along with your income tax and GST compliance.

FAQs

Who has to file TDS returns?

Every person who is required to deduct or collect tax at source and holds a TAN must file quarterly returns. This includes companies, firms, LLPs, employers, trusts and individuals whose accounts were subject to tax audit in the previous year.

What are the due dates for TDS returns?

Generally, returns are due by 31 July, 31 October, 31 January and 31 May for the four quarters respectively. These dates may change by notification, so we confirm them each year.

What happens if I file a TDS return late?

A late fee is charged for each day of delay, up to the amount of TDS, and must be paid before filing. A penalty may also be levied in some cases, and deductees may not get timely credit.

Can I file a TDS return without depositing the tax?

The return must include details of challans through which the tax was deposited. If tax has not been deposited, it should be deposited with interest before filing, or the return will show a short payment.

What is the difference between Form 24Q and Form 26Q?

Under the 1961 Act, Form 24Q is used for TDS on salaries, while Form 26Q is used for TDS on other payments to residents, such as contractor fees, professional fees, rent and interest. The new law prescribes corresponding forms for later periods.

How do I correct a mistake in a filed TDS return?

You can file a correction statement through the department's systems, using the details of the original return. Common corrections include PAN errors, challan mismatches and wrong amounts. We prepare and file corrections for you.

What is a lower deduction certificate?

A deductee whose actual tax liability is lower than the TDS rate can apply to the department for a certificate allowing deduction at a lower or nil rate. The deductor must apply the certificate within its validity and limits.

Do I need to issue Form 16 and Form 16A?

Yes. Employers must issue Form 16 for salary annually, and other deductors must issue Form 16A each quarter, both downloaded from the TDS reconciliation portal. Corresponding certificates apply under the new law for later periods.

What is TCS and does it need a separate return?

Tax Collected at Source is collected by sellers on specified sales and remittances. It is reported in a separate quarterly return, which we can file along with your TDS returns.

What changes with the Income-tax Act, 2025?

For payments made from 1 April 2026, TDS is governed by the Income-tax Act, 2025, with renumbered provisions, a tax year concept and revised forms. Earlier periods continue under the 1961 Act. We apply the correct law to each period.

Does the fee cover all forms for a quarter?

Our listed fee covers one TDS return for one TAN for one quarter. If you need several forms in the same quarter, such as salary and non-salary returns, or have a large number of deductees, we quote the extra work separately.

What if I received a default notice for an old quarter?

Share the notice and the processing statement with us. We check whether the default is genuine, prepare a correction statement where it arose from an error, or help you pay the amount due to close it.

Is a nil TDS return required?

Requirements for nil statements have varied over time. Where no tax was deducted in a quarter, you may need to submit a declaration rather than a full return. We check the current requirement for your case.

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