TDS Return Filing

TDS return filing is the quarterly statement a deductor files with the Income Tax Department reporting tax deducted at source on salaries (Form 24Q), non-salary payments (26Q), payments to non-residents (27Q) and TCS (27EQ). Accurate, timely filing lets deductees see the credit in their Form 26AS/AIS.

Who needs this: Any person (business, employer, or individual/HUF liable to audit) who deducts TDS must obtain a TAN and file quarterly returns, even for a nil-deduction quarter if they wish to keep the TAN active.

Government portal: TRACES (tdscpc.gov.in) and the Income Tax e-filing portal / Protean (NSDL) for upload.

Indicative fees: ₹1,000–₹3,000 per quarter in professional fees; no government filing fee.

Timeline: Prepared and filed within the quarterly due dates (31 July, 31 October, 31 January, 31 May).

Documents required

TAN of the deductor
Challan details (CIN) of TDS deposited
PAN of all deductees
Amount paid and TDS deducted per deductee
Salary breakup for Form 24Q (Annexure II in Q4)
Previous quarter's token/acknowledgement number

Step-by-step process

Deduct TDS at the correct rate and deposit it by the 7th of the following month
Collect PAN and payment details of every deductee for the quarter
Prepare the return in the correct form (24Q/26Q/27Q/27EQ) using RPU or filing software
Validate the file with the File Validation Utility (FVU)
Upload the FVU file on the e-filing portal or through a TIN-FC
Download the Form 16/16A from TRACES after processing and issue them to deductees
Correct any short-deduction or PAN-error defaults flagged by TRACES via a correction statement
Reconcile deducted, deposited and reported amounts every quarter to avoid mismatches

Penalty for non-compliance

Late filing costs ₹200/day under section 234E until filed; wrong PANs trigger short-deduction demands at 20%.

Which form, and for what

Form 24Q covers TDS on salaries, 26Q covers most other payments to residents, 27Q covers payments to non-residents and 27EQ covers tax collected at source. Returns are quarterly. The form is determined by the nature of the payment and the residential status of the payee, not by convenience — and using the wrong one leaves the deduction unmatched against the payee's PAN.

Filing the return is what gives your payee credit

Deducting and depositing are only two-thirds of the obligation. Until the quarterly return is filed with correct PANs and correct section codes, the deduction does not appear in the payee's Form 26AS and cannot be claimed by them. This is the origin of nearly every "TDS deducted but not showing" dispute, and only the deductor can resolve it by filing or revising the return.

What late filing costs

A late return attracts a fee of ₹200 per day under section 234E, capped at the amount of tax deducted, and that fee is not waived for reasonable cause. Separately, late deposit runs at 1.5% per month under section 201(1A) and late deduction at 1%, with part of a month counted as a full month. Prolonged failure can also attract a penalty under section 271H.

Validate the PANs before you file, not after

An invalid or missing PAN pushes the deduction rate to 20% or higher under section 206AA, and a wrong PAN in the return sends the credit to a stranger. Verify PANs at onboarding, run the file through the validation utility before submitting, and check the status of the return after filing. Correction statements are possible but they are slower and more painful than getting it right at the outset.

Issue the certificates, and reconcile

Form 16 for salary and Form 16A for other payments are generated from TRACES after the return is processed, and must be issued within the prescribed time. Reconcile what you deducted, what you deposited by challan and what the return reports — the three must agree, and a mismatch between challan and return is one of the most common reasons a default notice arrives. The TDS interest calculator quantifies any delay before it is assessed.

📘 Income tax in India AY 2026-27 — full guide

Frequently asked questions

What are the TDS return due dates?

Q1 (Apr–Jun): 31 July; Q2 (Jul–Sep): 31 October; Q3 (Oct–Dec): 31 January; Q4 (Jan–Mar): 31 May.

What is the penalty for late TDS return filing?

A late-filing fee of ₹200 per day under section 234E (capped at the TDS amount), plus a penalty of ₹10,000–₹1,00,000 under section 271H for returns delayed beyond a year or filed with wrong details.

Do I need to file a nil TDS return?

A nil return is not strictly mandatory, but filing a nil declaration on TRACES prevents notices and keeps your TAN status clean.

How does a deductee get credit for TDS?

Once the deductor files the return correctly with the right PAN, the credit appears in the deductee's Form 26AS and AIS and can be claimed in their ITR.

What is Form 16 vs Form 16A?

Form 16 is the annual TDS certificate for salary (from 24Q); Form 16A is the quarterly certificate for non-salary TDS (from 26Q/27Q). Both are downloaded from TRACES.