TDS return filing is a quarterly deadline, not a one-time task. File Form 24Q, 26Q, 27Q, or 27EQ on time with LegalDev's CA-led PAN and challan validation, so nothing comes back to you as a notice.
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Most businesses get the TDS deduction part right the salary or vendor payment goes out, the tax gets withheld. Where things go wrong is the follow-through: depositing that tax on time, and then reporting it correctly in a quarterly return that ties every rupee to a PAN, a challan, and a payment type. Miss any one of those, and the cost isn't abstract. It's ₹200 a day, automatically calculated, with no appeal process.
The bigger risk usually isn't the fee itself. It's a wrong PAN in the return that blocks your vendor's or employee's tax credit in their Form 26AS, or a missed correction window that turns a fixable error into a permanent record. This page walks through what actually needs to happen each quarter, what changed this year, and where LegalDev's CA team fits into the process.
TDS (Tax Deducted at Source) means the person paying you an employer, a client, a tenant withholds a slice of tax before the money reaches you and deposits it with the government on your behalf. That deposit alone doesn't close the loop. The deductor also has to file a quarterly return listing every deduction: who it was from, how much, under which section, and against which challan.
That return is what makes the deducted tax show up in the deductee's Form 26AS and Annual Information Statement (AIS), which is how they eventually claim credit for it in their own income tax return. Skip the return, or get it wrong, and the deduction the government already collected doesn't reach the person it belonged to.
Governing Framework: TDS return filing is the quarterly statement (Form 24Q, 26Q, 27Q, or 27EQ) reporting tax deducted at source to the Income Tax Department. It's due by the last day of the month after each quarter ends (31 May for the January–March quarter) separate from the monthly TDS deposit deadline of the 7th and late filing draws a non-waivable ₹200/day fee under Section 234E.
If you hold a valid TAN and have deducted tax even once in a quarter, a return is expected for that quarter deduction, not payment size, is what triggers the filing obligation. If you don't yet have one, you'll need to get a TAN before your first filing.
Note on the Income-tax Act, 2025: from 1 April 2026, the new Act reorganises TDS provisions salary TDS now sits under Section 392 and most non-salary TDS/TCS sections are consolidated under a single, table-driven Section 393 (with TCS separately referenced). Several practitioners are already referring to renumbered forms (24Q, 26Q, and 27Q being described as Forms 138, 140, and 139 in some early commentary). The renumbering is still settling across filing software and the e-filing portal, so confirm the current form label on incometax.gov.in or with your CA before you file the underlying compliance obligation and rates haven't changed, only the labels are in transition.
Budget 2025 raised several TDS thresholds effective FY 2025-26, and a fair number of businesses are still deducting at the old limits:
If your accounting software or payroll vendor hasn't been updated to reflect these, you may be deducting TDS on payments that no longer require it, or at a rate that's no longer correct both create reconciliation headaches at return time.
A Digital Signature Certificate is mandatory for corporate deductors and anyone liable for tax audit under Section 44AB; everyone else can e-verify with an Aadhaar OTP or net banking EVC.
This is where most confusion starts. Deposit is monthly. Return filing is quarterly. Missing either has separate consequences.
Monthly TDS deposit (non-government deductors): by the 7th of the following month, except tax deducted in March, which can be deposited by 30 April.
Quarterly TDS/TCS return filing dates shown above are for FY 2026-27 (Tax Year 2026-27). Form 26QB (property TDS) is due within 30 days from the end of the month in which TDS was deducted it isn't tied to the quarterly cycle above.
Upload payment records and TDS challans through our portal, or hand them to your dedicated CA.
We cross-check every PAN against the Income Tax database and verify challan amounts before anything gets filed, since PAN errors are the single biggest cause of correction returns later.
We generate the File Validation Utility file, file it on the e-filing/TRACES system, and share your acknowledgment number the same day.
Once the return is processed, we download and share TDS certificates for your employees or vendors so they can claim credit without chasing you for it.
Timeline: most straightforward quarterly returns are filed within 2–4 working days of receiving complete data; complex filings with non-resident payments or correction history may take longer. Pricing depends on the number of deductees, form type, and whether corrections are involved get a quote based on your actual filing volume rather than a flat rate that doesn't fit your business.
₹200 for every day of delay, automatically computed by the system at processing, capped at the total TDS/TCS amount for that quarter. It cannot be waived and must be paid before the delayed return is accepted.
A discretionary penalty of ₹10,000 to ₹1,00,000, separate from and in addition to the 234E fee, generally not levied if the tax, fee, and interest are cleared and the return is filed within a reasonable window of the due date. Given how this window has been treated inconsistently across recent guidance, confirm the applicable relief period with your CA at the time of filing.
1% per month for delay in deducting TDS, 1.5% per month for delay in depositing deducted TDS, calculated from the date due to the date actually paid.
The cost most people miss: an unpaid or unreported TDS expense can be disallowed under Section 40(a)(ia) when you compute your own taxable profit, meaning a compliance slip on the TDS side can inflate your income tax bill separately from the TDS penalties themselves. The cost to the other side: a wrong PAN or a missed return blocks your employee's or vendor's TDS credit in their Form 26AS/AIS, which is often the first thing that damages a business relationship, well before any tax notice arrives.
Mistakes happen most often with PAN entries, challan mismatches, or amount errors. To fix one:
Time limit to know about: CBDT rules now require TDS/TCS corrections to be filed within two years from the end of the relevant financial year, tightening from 1 April 2026 onward. A temporary relaxation window has applied to some older-year filings, but going forward, don't sit on a known error the correction door closes on a fixed timeline, not indefinitely.
Filing your own return through the free utility works fine for a small, stable deductee base with no non-resident payments and no correction history. It gets expensive fast the moment a PAN error, a wrong section code, or a missed threshold shows up after the fact, because fixing it means a formal correction return and, sometimes, a notice response. A CA-led process front-loads the PAN and challan validation before filing, which is the step that actually prevents most of the problems above.
LegalDev's team validates every PAN and challan before filing, tracks your quarterly deadlines so you don't have to, and handles TRACES correction filings if an error surfaces later. We work across Form 24Q, 26Q, 27Q, 27EQ, 26QB, and 26QC, and coordinate with your existing accountant or payroll provider rather than replacing that relationship. Many of our clients also come to us after registering a private limited company, since a Pvt Ltd or LLP structure brings its own set of quarterly TDS obligations from day one, alongside routine GST registration and GST return filing compliance, and MSME registration for priority lending benefits.
Answers to the most commonly asked questions about TDS Return Filing in India.
No. Deposit is paying the deducted tax to the government via challan, generally by the 7th of the following month. Return filing is the quarterly statement reporting who the tax was deducted from and how much, filed separately by the quarter's due date.
No, a valid TAN is mandatory for Form 24Q, 26Q, 27Q, and 27EQ. The exception is Form 26QB for property purchases, which uses the buyer's and seller's PAN instead.
The deductee's tax credit doesn't reflect correctly in their Form 26AS/AIS, and going forward, a missing or invalid PAN can trigger the higher 20% deduction rate under Section 206AA. You'll need to file a correction return through TRACES to fix it.
Download the Conso file and Justification Report for that quarter from TRACES, identify the field that's wrong, and file the applicable correction return. Corrections must generally be completed within two years from the end of the relevant financial year.
Form 16 is issued annually to employees for salary TDS under Form 24Q. Form 16A is issued quarterly for non-salary TDS such as rent, professional fees, or contract payments under Form 26Q/27Q.
It's mandatory for corporate deductors and anyone liable for tax audit under Section 44AB. Others can e-verify using an Aadhaar OTP or net banking EVC instead.
₹200 for every day of delay, computed automatically at the time of processing, capped at the total TDS/TCS amount for that quarter. It applies regardless of reason and cannot be waived.
Yes. The fee is specifically for delayed return filing, independent of whether the underlying tax was deposited on schedule.
It's a combined challan-cum-statement for TDS on the purchase of immovable property worth ₹50 lakh or more, filed within 30 days from the end of the month in which the tax was deducted.
Yes. Budget 2025 raised the Section 194-I annual threshold from ₹2.4 lakh to ₹6 lakh for non-individual payers, and cut the Section 194-IB rate for individual/HUF payers from 5% to 2%, both effective FY 2025-26.
If you're an individual or HUF not liable for tax audit and your monthly rent exceeds ₹50,000, yes, under Section 194-IB, using Form 26QC.
20%, or the section's specified rate, whichever is higher, under Section 206AA.
Check Form 26AS or your Annual Information Statement (AIS) on the income tax e-filing portal both reflect what deductors have actually reported against your PAN.
A nil return usually isn't mandatory, but filing a Declaration for Non-Filing of TDS Return on the e-filing portal is recommended to prevent an automated default notice.
234E is an automatic, non-negotiable daily fee for late filing. 271H is a separate, discretionary penalty of ₹10,000–₹1,00,000 for non-filing or filing with incorrect details, which can apply on top of the 234E fee.
The underlying obligations and most rates stay the same, but from 1 April 2026 the Act restructures the sections that define TDS/TCS, and several forms are being referenced under new numbers in early commentary. Confirm the current form name on the portal or with your CA before filing, since the transition is still being finalised across filing systems.
TAN and PAN of the deductor, PAN of every deductee, payment/salary ledgers for the quarter, and challan details for each deposit. Exact requirements vary slightly by form see the documents section above.
We handle the full cycle: challan validation, PAN checks, FVU preparation, return filing, and Form 16/16A generation once the return is processed.
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A missed TDS deadline compounds fast, first as a daily fee, then as a blocked credit for someone who's relying on you to report it correctly. LegalDev's CA team handles the PAN validation, the filing, and the certificate generation so it doesn't land back on your desk as a notice.
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