TDS Return Filing in India — Forms, Due Dates and Rates
A TDS return is the quarterly statement in which a deductor tells the Income Tax Department who was paid, how much was deducted, and against which PAN the credit should sit. It is the step that converts money you have already deposited into credit your vendors, employees, and partners can actually claim. A deduction made, deposited, and never reported is worse than useless — the government has the money, and the deductee has nothing to show for it.
The forms changed on 1 April 2026. Under the Income-tax Rules, 2026 the four familiar quarterly statements have been renumbered, the several challan-cum-statement forms have been consolidated into one, and the TDS certificates have new numbers too. Which set you use depends on when credit or payment occurred, not on when you file — so a single quarter can involve old forms for one transaction and new forms for another during the transition.
This guide covers the form mapping, the rule for deciding which Act governs a deduction, the quarterly and monthly calendar, an indicative rate and threshold table, the certificate obligations, late fees and interest, correction statements, default notices, and lower-deduction certificates.
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What is a TDS return and who files it?
A TDS return is filed by every person holding a TAN who has deducted tax at source during a quarter. It reports the challans through which tax was deposited and, against each challan, a deductee-wise breakdown with PAN, amount paid, section under which deduction was made, rate applied, and date of deduction and payment.
The statement is what drives the deductee's Form 26AS and Annual Information Statement. Until you file, your vendor sees no credit, and a vendor who claims that credit anyway will usually pick up a demand at processing. This is why chasing a deductor to file is such a common feature of return season, and why filing on time is a commercial courtesy as much as a compliance obligation.
If you do not yet hold a TAN, that comes first — see TAN registration. Deduction without a TAN cannot be deposited, and interest runs from the date of deduction regardless.
Which TDS return form applies now?
The quarterly statements have been renumbered under the Income-tax Rules, 2026 with effect from transactions on or after 1 April 2026. The substance of each form is unchanged — the same four streams, the same annexure structure — but the numbers on your filing software, reminders, and internal checklists all need updating.
| What it reports | Old form | Form from 1 April 2026 |
|---|---|---|
| Quarterly TDS statement — salary | 24Q | 138 |
| Quarterly TDS statement — non-salary payments to residents | 26Q | 140 |
| Quarterly TDS statement — payments to non-residents | 27Q | 144 |
| Quarterly TCS statement | 27EQ | 143 |
| Challan-cum-statement — property, rent by individuals, specified payments, virtual digital assets | 26QB, 26QC, 26QD, 26QE | 141, with separate schedules |
| TDS certificate — salary | 16 | 130 |
| TDS certificate — non-salary | 16A | 131 |
Two points are worth pinning. Statements for periods up to 31 March 2026 continue on the old forms even if filed later, so a delayed old-period statement is not filed on the new form. And the consolidation of the four challan-cum-statement forms into one is a genuine simplification for one-off deductors — a property buyer and a tenant now use the same form with different schedules.
Which Act governs a particular deduction?
The test is the earlier of credit or payment. Where that event occurred on or before 31 March 2026, the deduction is governed by the Income-tax Act, 1961 and its provisions. Where it occurred on or after 1 April 2026, the Income-tax Act, 2025 applies. The Department has confirmed that rates and thresholds remain the same across the changeover, so the practical impact is on citations and forms rather than on amounts.
Under the new Act the deduction provisions have been consolidated: salary deduction sits in one section, resident non-salary deductions in a single section organised as a table with serial entries, non-resident payments in another sub-section, and collection at source in its own section. The familiar legacy numbers — the ones everyone still says out loud — continue to appear as the four-digit return codes used in the statements, which is why practical charts now carry both references.
The transition trap is a March-credited liability paid in April. The deduction obligation dates to the March credit and is governed by the old Act, but the deposit falls in the new year and the statement it belongs to is the old-form fourth-quarter statement. Map these by the credit date rather than by the payment date.
What are the TDS due dates?
| Obligation | Period | Due date |
|---|---|---|
| Deposit of tax deducted | Any month other than the final month of the year | The 7th of the following month |
| Deposit of tax deducted | Final month of the financial year | The 30th of the following month |
| Quarterly statement | Quarter ended 30 June | 31 July |
| Quarterly statement | Quarter ended 30 September | 31 October |
| Quarterly statement | Quarter ended 31 December | 31 January |
| Quarterly statement | Quarter ended 31 March | 31 May |
| Salary certificate to employees | Full financial year | By the prescribed date after year end, conventionally 15 June |
| Non-salary certificate to deductees | Each quarter | Within the prescribed period after the statement due date |
| Challan-cum-statement for specified one-off deductions | Each transaction | Within the prescribed period from the end of the month of deduction |
One change to note. The collection-at-source statement used to fall on the 15th of the month following each quarter; under the current rules it shares the same dates as the TDS statements. Because that is an extension rather than an advance, no default arises from working to the older dates — but a reminder system still firing on the 15th can convince a collector that a default has occurred where none has. Align all four statements to the common dates.
Which payments attract TDS, and at what rate?
The table below is indicative and covers the payments most businesses actually make. Rates and thresholds are set by statute and revised regularly, and several were amended in recent years, so we confirm the operative rate and threshold for each payment before deduction rather than working from a saved chart.
| Payment | Legacy section | Indicative rate | Threshold position |
|---|---|---|---|
| Salary | 192 | Average rate on estimated annual salary | Where estimated salary is taxable |
| Interest other than on securities | 194A | 10% | Higher limit for senior citizens; separate limits for banks and others |
| Contractual work, including supply of labour | 194C | 1% for individual or HUF contractors, 2% for others | Prescribed single-payment and annual aggregate limits |
| Commission or brokerage | 194H | 2% | Prescribed annual limit |
| Rent of land, building, plant or machinery | 194-I | Lower rate for plant and machinery, higher for land and building | Prescribed annual limit |
| Professional fees | 194J | 10% | Prescribed annual limit |
| Technical services, call centre, film royalty | 194J | 2% | Prescribed annual limit |
| Director remuneration other than salary | 194J | 10% | No threshold |
| Dividend to a resident | 194 | 10% | Prescribed annual limit |
| Purchase of goods from a single supplier | 194Q | 0.1% | On value above the prescribed annual limit |
| Benefit or perquisite from business or profession | 194R | 10% | Prescribed annual limit |
| Sales through an e-commerce operator | 194-O | 0.1% | Prescribed annual limit for individual and HUF participants |
| Transfer of a virtual digital asset | 194S | 1% | Prescribed limit, differing by payer category |
| Salary, remuneration, interest to a partner | 194T | 10% | Prescribed annual aggregate per partner |
| Payments by individuals or HUF not under audit | 194M | 2% | Prescribed annual limit |
| Any sum chargeable to tax paid to a non-resident | 195 | Rates in force, or treaty rate where beneficial | No threshold |
| Deductee has not furnished PAN | 206AA | Higher of the applicable rate or the prescribed default rate | Applies across sections |
Characterisation decides the section, and getting it wrong is the most common substantive error. Manpower supply is generally contractual while turnkey software development is generally a technical service or royalty. A vehicle hired for exclusive use without the hirer bearing fuel and driver cost is rent, while trip-wise hire with the operator retaining control is contractual. Free goods given as a channel incentive fall under the benefit provision, while a quantity discount on the invoice remains part of the consideration for goods. Where an e-commerce operator deducts on a participant's gross receipt, that provision takes precedence and no further deduction arises on the same receipt.
What is the monthly deposit routine?
- 1.Collect PAN from every vendor, employee, and partner before the first payment
- 2.Determine the correct section and rate at the point of raising the payable, not at payment
- 3.Deduct at credit or payment, whichever is earlier — a journal entry triggers the obligation
- 4.Apply the higher rate where PAN has not been furnished
- 5.Apply any lower or nil deduction certificate the deductee has produced, within its stated limits
- 6.Deposit the total for the month by the prescribed date, quoting the TAN on the challan
- 7.Use a separate challan for each section and each quarter of assessment as required
- 8.Reconcile the challan total to the ledger of deductions before the month closes
- 9.Deposit the final month of the year by its later prescribed date, which differs from other months
- 10.Retain the challan identification number, because the quarterly statement is built on it
The single discipline that prevents most defaults is deducting at credit rather than at payment. A liability booked in March and paid in July was deductible in March, and the interest for late deposit runs from that March date. Where payroll is the main deduction stream, running it as a system avoids this by construction — see payroll management.
What data do you need to file a TDS return?
- TAN, and portal credentials for the e-filing and deductor reconciliation portals
- Challan details for every deposit in the quarter — amount, date, and challan identification number
- Deductee-wise details with name, valid PAN, amount paid, and date of payment or credit
- Section under which deduction was made, for each deductee row
- Rate applied, and the reason code where a lower or nil rate was used
- Copies of any lower or nil deduction certificates relied on
- Declarations received from deductees for non-deduction, where applicable
- For salary statements, the full annual computation for each employee with exemptions and deductions
- Details of perquisites, and of any tax paid by the employer on the employee's behalf
- Previous quarter's statement token number and the consolidated file where a correction is involved
- Digital signature or the authorised signatory's verification credentials
PAN quality is the variable that decides whether filing is quick. An invalid or structurally wrong PAN is rejected at validation, and a valid-but-wrong PAN passes validation and credits a stranger — which is much harder to unwind. Verify PANs in bulk against the Department's facility before the statement is prepared, not after a deductee complains.
How do you file a TDS return?
- 1.Reconcile the quarter's deductions ledger to the challans actually deposited
- 2.Verify every deductee PAN in bulk and fix invalid entries at source
- 3.Select the correct form for the stream — salary, resident non-salary, non-resident, or collection
- 4.Confirm you are using the form set applicable to the period, not to the filing date
- 5.Prepare the statement in the return preparation utility or approved software
- 6.Validate the file, resolve every error and warning, and generate the validated output
- 7.Where the statement is late, pay the daily fee first — it must be paid before filing
- 8.Upload the statement on the e-filing portal under the TAN login, signing as required
- 9.Save the token number and the provisional receipt
- 10.Check the processing status on the deductor portal after a few days
- 11.Download and issue the certificates to deductees within the prescribed period
- 12.Review the default report for short deduction, short payment, and late payment, and act on it
Do not treat upload as completion. A statement can be accepted at upload and still throw defaults at processing, and those defaults generate their own notices to the deductor. The quarter is finished when the default report is clean and the certificates are out.
What certificates must a deductor issue?
A salary certificate is issued annually to every employee from whose salary tax was deducted, covering the whole year with a detailed annexure of the computation. A non-salary certificate is issued quarterly to each deductee. Both are generated from the filed statement on the deductor portal rather than typed up independently, and both carry new form numbers under the current rules.
Because the certificate is generated from the statement, an error in the statement becomes an error in the certificate. Employees changing jobs mid-year need certificates from both employers, and the new employer should be given the previous one so that the exemption and standard deduction are not given twice — a mismatch that reliably produces a demand on the employee's return.
Failure to issue a certificate within the prescribed period carries its own per-day exposure, separate from the fee for late filing of the statement. It is also the point at which deductees discover a problem, so timely issue is the cheapest form of quality control available.
What are the late fees, interest and penalties?
| Default | Charge | Notes |
|---|---|---|
| Late filing of the quarterly statement | A daily fee, capped at the amount of tax in that statement | Must be paid before the belated statement can be filed |
| Failure to deduct tax at all | Interest at the prescribed monthly rate from the date it was deductible | Plus disallowance of the related expense |
| Deducted but deposited late | Interest at the higher prescribed monthly rate from deduction to payment | Calculated per month or part of a month |
| Short deduction | Interest on the shortfall, plus the shortfall itself | Raised as a default on the deductor portal |
| Non-filing or incorrect particulars in the statement | Penalty within the prescribed range | Relief available where tax, fee and interest were paid and the statement filed within the prescribed period |
| Failure to issue certificates in time | A daily fee, subject to the prescribed ceiling | Separate from the statement fee |
| Deducted and not deposited at all | Interest, penalty, and disallowance | Prosecution exposure in serious cases |
Amounts and ceilings are set by statute and change, so treat this as heads of exposure. The two structural points do not change: the daily fee is capped at the tax in the statement, which means a small statement filed very late still costs no more than the tax itself, and the fee has to be paid before the statement can be filed, which is why a belated statement often stalls on payment rather than on preparation.
When do you need a correction statement?
A correction statement amends a statement already filed. It is the route for a wrong PAN, a wrong section, a wrong amount, a challan that did not match, a deductee row omitted, or a missing lower-deduction certificate reference. Corrections are prepared against the consolidated file downloaded from the deductor portal, so the correction is built on the Department's version of your statement rather than on your own copy.
- PAN corrections are permitted but the extent of change allowed in a single correction is restricted
- Challan corrections resolve unmatched or partially matched deposits
- Adding a deductee row is done through the appropriate correction category, not by refiling the statement
- Correcting the section changes the rate test, so recheck for a short-deduction default afterwards
- A correction can be filed more than once on the same statement
- Each correction needs the token number of the statement being corrected
- Corrections should be filed before the deductee files their return, where possible
- A default resolved by correction should be reconfirmed on the default report afterwards
File corrections promptly. A vendor who cannot see a credit will chase you during their own filing season, and a credit corrected after their return is filed usually means they need a rectification too. The cheapest correction is the one filed in the same quarter.
How do you handle a default notice as a deductor?
Defaults appear on the deductor reconciliation portal with a justification report setting out, row by row, what the system considers wrong — short deduction, short payment, late payment interest, late deduction interest, or the daily fee. Read the justification report before responding, because the categories have different remedies.
A short deduction arising from a wrong section is fixed by a correction statement. A short deduction arising from a genuinely lower rate is fixed by quoting the certificate reference in the statement. An unmatched challan is fixed by a challan correction. Interest and fee, where genuinely due, are paid and then tagged against the default so the portal closes it. Where the demand itself is wrong, respond on the portal with the reasoning rather than paying — but respond, because an unanswered deductor demand behaves like any other demand and can be set off against refunds; see income tax notice handling.
What is a lower or nil deduction certificate?
A deductee whose actual tax liability will be lower than the deduction rate can apply to the assessing officer for a certificate authorising deduction at a lower rate or no deduction, in the prescribed form. The deductor then deducts at the certified rate, within any monetary limit stated in the certificate, and quotes the certificate reference in the statement.
For payments to non-residents there is a parallel route — the payer can apply for a determination of the appropriate withholding rate, and that certificate becomes the basis for the remittance reporting. Separately, certain resident deductees can furnish a self-declaration for non-deduction where their income is below the taxable limit; the deductor still reports those amounts in the statement with the relevant reason code.
From the deductor's side the discipline is simple: no certificate on file, no lower rate. Deducting at a reduced rate on a vendor's assurance produces a short-deduction default in your name, not theirs, and the interest and shortfall are recovered from you.
Do you have to file a nil TDS return?
Where there were no deductions at all in a quarter, there is no statement to file, because a statement is built on challans. What is expected instead is a declaration of non-filing for that quarter on the deductor portal, stating the reason. Filing that declaration is what stops the reminder and default machinery from treating the quarter as a missing statement.
The distinction matters for a business with irregular deduction activity — a firm that only credits partner interest at year end, for example, may have three quarters with no deductions and one with them. Marking the empty quarters as non-filing keeps the record clean, and it takes minutes.
How does collection at source differ from deduction?
Collection at source works in the opposite direction: the seller or service provider collects an additional amount from the buyer and deposits it against the buyer's PAN. It applies to specified transactions — sale of certain minerals, motor vehicles above a threshold, specified luxury goods, remittances under the liberalised remittance scheme, and overseas tour packages, among others. It is reported in its own quarterly statement, now sharing the same due dates as the TDS statements.
One long-standing overlap has been removed. The collection obligation on sale of goods above the annual threshold has been abolished, so on a goods transaction the buyer's deduction obligation is now the sole live requirement rather than a question of which party acts first. Sellers who continued collecting on goods sales after that change have generally been collecting an amount that is no longer due — worth checking against your invoicing configuration.
What are the common TDS filing errors?
- Deducting at payment rather than at credit, so the interest clock started earlier than assumed
- Wrong section chosen, producing a short-deduction default at the correct rate
- A valid but incorrect PAN, which credits the wrong person and passes validation silently
- Lower rate applied without the certificate on file
- Old form numbers used for a period governed by the new forms, or the reverse
- Final month of the year deposited on the ordinary monthly date instead of the later one
- Daily fee not paid before attempting to file a belated statement
- Certificates not issued, so deductees discover the problem during their own filing
- Empty quarters left silent instead of being marked as non-filing
- Default report never opened, so short deductions accumulate across quarters
- Partner payments overlooked entirely by firms new to the deduction obligation
- Collection continued on goods sales after that obligation was abolished
The recurring cost of these is not the fee — it is the disallowance. Tax deducted and not deposited in time disallows the underlying expense in the entity's own return, so the same slip is paid for twice; see business ITR filing for how that adjustment lands.
Why choose Arjun Filings for TDS return filing?
Arjun Filings runs TDS return filing as a checklist-first engagement: a qualified CA or CS scopes the work, tells you exactly which documents are needed, and reviews every form before it is signed and submitted. You get a named specialist, a status update at each stage, and a compliance calendar for whatever comes next.
- CA-reviewed TDS return filing
- Checklist before computation
- E-verification guidance
- Notice awareness when relevant