Overview
Tax deducted at source means the person making certain payments deducts tax before paying and deposits it with the government. The deductor then files a quarterly statement showing who was paid, how much was deducted and the challan details.
The statement is the basis for the tax credit that shows in each recipient's Form 26AS and AIS. If it is wrong or late, the recipient does not get their credit and the deductor can face fees and interest.
Which form applies depends on the type of payment. Salary has its own form, other payments to residents use another, and payments to non-residents use a third.
Who has to file TDS returns?
Anyone who deducts or collects tax at source and holds a TAN.
Usually a good fit if
- You pay salaries above the exemption limits and deduct tax.
- You pay rent, professional or contractor fees, commission, interest or similar amounts above the thresholds.
- You make payments to non-residents that attract withholding.
- You have missed a quarter and need to regularise it.
Think twice if
- You make no payments that attract TDS in a quarter; in that case filing may not be required, but check before deciding.
Key benefits
No late fees
Returns filed within the quarterly due dates avoid the daily fee.
Correct credit for payees
Accurate statements mean recipients see their credit in Form 26AS.
Right deduction rates
We check rates and thresholds payment by payment.
TDS certificates
Form 16 and Form 16A are generated from the filed returns.
Fewer notices
Matching deductions to deposits avoids default notices.
Corrections handled
Mistakes in earlier quarters can be fixed through correction statements.
What we need from you
We work from a simple payments record each quarter.
Deductor details
- TAN and PAN of the deductor
- TRACES login details or authority for us to access it
- Contact details of the person responsible
Payee details
- PAN of each payee
- Name, address and category (individual, company, firm and so on)
- Lower deduction certificate, if any payee has one
Payment and deduction records
- Payment register by month with date, amount and nature of payment
- Salary sheets for salary TDS, with investment declarations
- Challan details for all TDS deposited
For correction returns
- Original return receipt number
- Details of the corrections required
How the process works
Collect the quarter's records Start of the quarter close
You send payment and deduction data after quarter end.
Validate PANs and rates 1 to 2 days
We verify PANs, applicable sections and rates, and flag short deductions.
Reconcile deductions with deposits 1 to 2 days
We match deductions against challans paid and highlight any gaps.
Prepare the statement 1 day
The return is prepared in the prescribed format and validated.
File and track processing Same day
The statement is filed and we monitor the processing status and any default notices.
Issue certificates After processing
Form 16 for salary and Form 16A for other payments are generated and shared.
How long it takes
| TDS deposit | By the 7th of the following month |
| Quarter 1 return | 31 July |
| Quarter 2 return | 31 October |
| Quarter 3 return | 31 January |
| Quarter 4 return | 31 May |
Government payments and the March deposit have separate dates, and due dates can be extended by notification. We confirm them before each quarter.
What happens if TDS compliance slips
The cost builds up quietly.
- Late filing feeA fee is charged for each day of delay, capped at the amount of the TDS.
- InterestInterest runs on late deduction and late deposit.
- PenaltyFurther penalties can apply for non-filing or incorrect statements.
- Disallowance of expensePart of the related expense can be disallowed if TDS was not deducted or deposited on time.
- Payee complaintsRecipients who do not see credit often come back to the deductor, so errors become relationship problems.
Frequently asked questions
What is the difference between 24Q and 26Q?
24Q is for TDS on salary. 26Q is for TDS on payments other than salary to residents, such as rent, professional fees and contractor payments.
Is TAN mandatory?
Yes. Anyone who deducts tax must hold a TAN and quote it on challans and returns.
When is TDS to be deposited?
Generally by the 7th of the month following the deduction, with a different date for March and for payments by the government.
What if I file late?
A daily fee applies, up to the tax amount, plus interest on any late deposit. Filing as soon as possible keeps it from growing.
Can I correct a filed return?
Yes. A correction statement can fix errors in PAN, amounts or challan details.
Do I need to file if there was no deduction in a quarter?
Filing is generally required only when there was a deduction or collection, but we confirm for your case.
This page is general information to help you prepare, not legal, tax or professional advice for your situation. Rules, forms, thresholds and due dates change, so we confirm the current position before we file anything for you. Taxswami Consultants is an independent professional services firm and is not a government body.