Introduction
If you are running a business or managing salaries, you’ve probably come across the term TDS (Tax Deducted at Source). It’s one of those things that looks complex at first but becomes easy once you understand the basics. Filing TDS returns is not just a compliance task—it’s about keeping your business safe from penalties and ensuring employees, vendors, or contractors get proper tax credit.
In this article, we’ll break down everything about TDS return filing, from who needs to file, which forms to use, due dates, penalties, and step-by-step filing guidance.
What is TDS, and Why is Return Filing Important?
TDS is the government’s method of collecting tax as income is earned, rather than waiting until the end of the year. For example, when you pay an employee or contractor, you deduct tax at a fixed rate and deposit it on their behalf.
But deduction alone isn’t enough. You must also file TDS returns so the government knows who was paid, how much was deducted, and when it was deposited. Without this, your employees or vendors will not receive credit in their Form 26AS, resulting in mismatched tax records.
Who Needs to File TDS Returns?
Not everyone has to file TDS returns. It applies to:
- Companies, LLPs, and partnership firms.
- Individuals or HUFs who are subject to tax audit.
- Even individuals not under audit, but making payments for property purchases, rent above ₹50,000/month, or contractor/professional payments above certain limits.
TDS Return Forms You Should Know
Different payments require different forms:
- Form 24Q – Salary payments.
- Form 26Q – Non-salary payments to residents.
- Form 27Q – Payments to non-residents.
- Form 27EQ – For TCS (Tax Collected at Source).
- Form 26QB/26QC/26QD/26QE – One-time challan-cum-statement for property, rent, contractor payments, or crypto transactions.
Due Dates for TDS Filing
TDS returns are filed quarterly:
- April–June: 31 July
- July–September: 31 October
- October–December: 31 January
- January–March: 31 May
TDS deducted in a month must be deposited by the 7th of the following month, except in March, which has a due date of 30 April.
Penalties and Interest
Missing deadlines can be costly:
- Interest: 1% per month for late deduction, 1.5% per month for late deposit.
- Late Filing Fee: ₹200 per day (capped at TDS amount).
- Penalty u/s 271H: ₹10,000–₹1,00,000 for incorrect or very late filing.
Step-by-Step Process of Filing TDS Returns Online
- Collect Data – PAN, payment details, and challan details.
- Prepare the File – Use the Return Preparation Utility (RPU) and validate it with the File Validation Utility (FVU).
- Upload File – Log in to the Income Tax portal using your TAN, upload the file, and e-verify.
- Track Status – Use Token Number to check whether it’s accepted or rejected.
- Generate Certificates – After processing, download Form 16 or 16A from TRACES.
Corrections and Common Errors
Even small mistakes, such as a wrong PAN, can cause mismatches. If your return gets rejected:
- Download the justification report from TRACES.
- Correct errors in RPU.
- Re-upload as a revised return.
Documents You Should Maintain
- TDS challans (ITNS 281).
- Deduction workings and invoices.
- Copies of Form 15G/15H or lower deduction certificates (if applicable).
- Payment proofs and TRACES acknowledgements.
Conclusion
TDS return filing might sound like another compliance headache, but with the proper process in place, it’s pretty straightforward. Remember the key dates (7th of each month and quarterly deadlines), and file accurate returns.
