TDS Return Filing

Quarterly TDS return filing for tax deductors.

A TDS return is the quarterly statement filed by whoever deducted tax at source, reporting each deduction against the PAN of the person it was deducted from — and until it is filed, that person cannot see the credit in their 26AS and cannot claim it. This is the part that catches deductors out: the money can be correctly deducted and correctly deposited, and still fail to reach the deductee's account, because the return that connects the two was never filed or was filed with the wrong PAN.

Who this is for

Quarterly filing
Form 24Q/26Q
TRACES portal
Penalty avoidance

Documents you'll need

TAN of the deductor
Challan details for tax deposited
Deductee PAN details and payment amounts
Previous quarter's return, if any

The process

What we actually do

1
We check the rate and section for every payment type
The rate depends on the nature of the payment and on whether the deductee has furnished a PAN — a missing PAN pushes the rate to 20% under section 206AA. Getting the section wrong means the deduction is wrong, and the shortfall is recovered from the deductor rather than the deductee.
2
We validate the PANs before the return goes anywhere
A return filed against an invalid or mistyped PAN produces a demand for short deduction at 20% and leaves the deductee with no credit. Validating them first takes minutes; correcting them afterwards means a revised return and a conversation with someone who has just discovered their credit is missing.
3
We reconcile the challans against the deductions
Every deduction has to map to a challan actually paid, with the right assessment year and the right section. An unconsumed or misallocated challan is the usual reason a return is accepted but the credit never appears.
4
We prepare and file the correct form
24Q for salary, 26Q for other domestic payments, 27Q for payments to non-residents, 27EQ for tax collected at source. Each has its own annexures, and 24Q's fourth-quarter annexure carries the full salary detail for the year.
5
We download and issue the certificates
Form 16 for salary and Form 16A for everything else are generated from TRACES only after the return is processed. They cannot be typed up by hand — a manually prepared certificate is not valid, and the deductee's own filing depends on the real one.
6
We clear the TRACES defaults
Short deduction, short payment, late payment interest and late filing fees all show up as defaults against the TAN. We work through them and file corrections, because they accumulate quietly and surface at the worst moment — usually when a certificate is urgently needed.

Who this is for

Employers deducting TDS on salary under section 192
Businesses paying contractors, professionals or commission where TDS applies
Anyone paying rent above the threshold, including individuals under section 194-IB
Buyers of property above ₹50 lakh, who must deduct 1% and file Form 26QB
Companies and firms paying interest, dividends or director remuneration
Anyone who has received a TRACES default notice for a short deduction or a late filing

How long it takes

Two to four working days per quarter where the data is clean. The delay, when there is one, is almost always PAN validation failures or challans that do not reconcile — both of which are faster to fix before filing than after.

If you do nothing

Defaults accumulate against your TAN and stay there. Employees and contractors cannot claim credit for tax you did deduct, which turns into their problem and then back into yours. The 30% disallowance under section 40(a)(ia) hits your own return for the same year, and a certificate you suddenly need — for a tender, a loan, a departing employee — cannot be issued until the backlog is cleared.

The law, in figures

Dates, thresholds and sections

Every figure below carries the provision it comes from, so it can be checked.
What	Figure	Source
Quarterly filing due dates	31 July, 31 October, 31 January and 31 May for Q1 to Q4	Rule 31A, Income-tax Rules 1962
TDS deposit due date	7th of the following month; 30 April for March deductions	Rule 30, Income-tax Rules 1962
Rate where the deductee has no PAN	20%, or the applicable rate if higher	Section 206AA
Property purchase TDS	1% of consideration where it is ₹50 lakh or more, filed in Form 26QB	Section 194-IA
Late filing fee	₹200 per day, capped at the TDS amount of the return	Section 234E

What usually goes wrong

Depositing the tax on time but filing the return late, so the deductee has no credit and the ₹200-a-day fee runs anyway
Quoting the wrong assessment year on the challan, which strands the payment where the return cannot consume it
Filing with an incorrect PAN and creating a 20% short-deduction demand against your own TAN
Issuing a Form 16A typed up manually instead of downloaded from TRACES, which the recipient's assessing officer will not accept
Missing the fourth-quarter 24Q salary annexure, which leaves every employee's Form 16 incomplete
Deducting under the wrong section — 194C instead of 194J is the classic — and being assessed for the difference

What non-compliance costs

Late filing fee of ₹200 per day under section 234E, capped at the TDS amount in the return
Interest at 1% per month for late deduction and 1.5% per month for late deposit under section 201(1A)
Penalty between ₹10,000 and ₹1,00,000 under section 271H for failure to file or for incorrect particulars
Disallowance of 30% of the expense in the payer's own income tax return where TDS was not deducted, under section 40(a)(ia)

These are statutory amounts, not our fees. What we charge depends on your situation and is quoted before any work starts.

Terms you will come across

TAN: A TAN is the ten-character number that anyone who deducts tax at source must quote on every TDS return, challan and certificate they issue.
TDS: TDS is tax collected at the moment income is paid rather than at the end of the year — the payer withholds a percentage and deposits it against the recipient's PAN.

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