Quarterly TDS/TCS Return Filing - Form 24Q, 26Q, 27Q, 27EQ
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TDS return filing is the quarterly compliance step that follows every TAN registration — a statement, required under Section 200(3) of the Income-tax Act, 1961, read with Rule 31A, that reports the deductor's TAN against every deductee's PAN, the amount paid, the tax deducted, and the challan through which that tax was deposited.
It's the mechanism that turns a tax deduction into a usable tax credit: without a correctly filed return, the amount withheld from a salary payment, a contractor invoice, or a rent payment never shows up in the deductee's Form 26AS or Annual Information Statement (AIS) — which means they can't claim it while filing their own return, no matter how correctly the tax was actually deducted at source.
The obligation to file runs with the TAN itself. Once an entity holds a TAN, it is expected to account for every quarter going forward — the filing isn't optional simply because a particular quarter happened to see no deductions.
| Parameter | Details |
|---|---|
| Governing Provision | Section 200(3) of the Income-tax Act, 1961, read with Rule 31A of the Income-tax Rules, 1962 |
| What It Is | A quarterly electronic statement linking the deductor's TAN with every deductee's PAN, the amount paid, and the tax deducted at source |
| Filing Platform | TRACES (TDS Reconciliation Analysis and Correction Enabling System), fed by files prepared using the NSDL/Protean Return Preparation Utility (RPU) |
| Who Must File | Any person or entity holding a TAN and liable to deduct tax at source — the obligation runs quarter to quarter, independent of whether every quarter actually saw a deduction |
| Frequency | Quarterly for Forms 24Q, 26Q, 27Q and 27EQ, with Form 24Q carrying an additional annual Annexure II filed alongside the fourth quarter |
| Downstream Impact | A correctly filed return populates the deductee's Form 26AS and Annual Information Statement (AIS) — the basis on which they claim TDS credit in their own income tax return |
A TDS return is filed on the TRACES ecosystem — prepared offline, validated, and then uploaded to the government's TDS reconciliation system. Each return reports, line by line, every transaction the deductor made during the quarter: the deductee's PAN, the amount paid, the tax deducted, the specific section under which it was deducted, and the challan that tax was deposited against.
Which form to file depends entirely on the nature of the payment, not on the deductor's business type. A company that pays salaries, rent, and contractor invoices in the same quarter will typically file Form 24Q for the salary portion and Form 26Q for everything else — the two forms exist side by side precisely because salary TDS is computed against the employee's annual slab liability, while non-salary TDS is computed transaction by transaction under its own section-specific rate.
Seven distinct forms cover the full range of TDS and TCS reporting — four filed quarterly by regular TAN holders, and three filed per-transaction by individuals making one-off large payments.
| Form | Covers | Frequency | Due Date / Timeline |
|---|---|---|---|
| Form 24Q | Salary payments to employees (Section 192) | Quarterly, with Annexure II (annual salary detail) filed along with Q4 | Standard quarterly due dates |
| Form 26Q | Non-salary payments to residents — interest, contractor payments, professional fees, rent, commission, and more | Quarterly | Standard quarterly due dates |
| Form 27Q | Payments to non-residents and foreign companies | Quarterly | Standard quarterly due dates |
| Form 27EQ | Tax Collected at Source (TCS) | Quarterly | Standard quarterly due dates |
| Form 26QB | TDS on purchase of immovable property (Section 194-IA) | Per transaction | Within 30 days from the end of the month in which TDS was deducted |
| Form 26QC | TDS on rent by an individual/HUF (Section 194-IB) | Per transaction | Within 30 days from the end of the month in which TDS was deducted |
| Form 26QD | TDS on Section 194M payments — contractual, professional, or commission payments by individuals/HUF not liable to tax audit | Per transaction | Within 30 days from the end of the month in which TDS was deducted |
Every quarterly form — 24Q, 26Q, 27Q, and 27EQ — shares the same filing calendar.
| Quarter | Return Due Date |
|---|---|
| Q1 (April – June) | 31 July |
| Q2 (July – September) | 31 October |
| Q3 (October – December) | 31 January |
| Q4 (January – March) | 31 May |
*This is the return filing deadline, distinct from the TDS deposit deadline — tax deducted in a given month must be deposited by the 7th of the following month, except for deductions made in March, which must be deposited by 30 April.
These are the sections that come up most often in day-to-day TDS compliance, each with its own rate and its own threshold below which no deduction is required.
| Section | Nature of Payment | Rate | Threshold |
|---|---|---|---|
| Section 192 | Salary | At the employee's applicable slab rate for the year | No fixed threshold — applies once taxable salary exceeds the basic exemption limit |
| Section 194A | Interest (other than on securities) | 10% | ₹40,000/year for bank/post office deposits (₹50,000 for senior citizens), ₹5,000/year otherwise |
| Section 194C | Payments to contractors | 1% (individual/HUF payee) / 2% (other payees) | ₹30,000 per single payment, or ₹1,00,000 in aggregate for the financial year |
| Section 194H | Commission or brokerage | 2% (reduced from 5%, effective 1 October 2024) | ₹20,000/year (raised from ₹15,000, effective 1 April 2025) |
| Section 194-I | Rent | 2% (plant & machinery) / 10% (land, building, furniture & fittings) | ₹2,40,000/year |
| Section 194J | Professional / technical fees | 2% (technical services, call centre operations, royalty for film distribution) / 10% (professional fees, other royalty) | ₹50,000/year per payee (raised from ₹30,000, effective 1 April 2025) |
| Section 194Q | Purchase of goods | 0.1% on value exceeding ₹50 lakh | Buyer's turnover must have exceeded ₹10 crore in the preceding financial year |
| Section 194R | Benefits or perquisites arising from business/profession | 10% | ₹20,000/year per recipient |
| Section 194S | Transfer of Virtual Digital Assets (VDAs/crypto) | 1% | ₹50,000/year for specified persons, ₹10,000/year for others |
| Section 195 | Payments to non-residents and foreign companies | 10%–30% depending on the nature of income, or the applicable DTAA rate if lower | No general threshold — rate and applicability depend on the specific type of income being remitted |
Gather the PAN of every deductee for the quarter and verify each one against official records, since an invalid or mismatched PAN is one of the most common reasons a return gets flagged as defective.
Apply the correct rate for the specific section governing the payment — salary, contractor, rent, professional fees, or another category — factoring in any lower deduction certificate the deductee may hold.
Pay the deducted tax to the government using Challan 281 by the prescribed deposit deadline, since the return cannot be correctly prepared until every challan for the quarter has actually been paid.
Compile deductee-wise, challan-wise, and section-wise details into the applicable form using the NSDL/Protean Return Preparation Utility (RPU), the standard tool for building the return file.
Run the prepared file through the File Validation Utility (FVU), which checks the statement for structural and data errors before it can be accepted for upload.
Submit the validated file on the TRACES portal, authenticated using the deductor's Digital Signature Certificate (or other valid verification method), and retain the provisional receipt number generated on successful upload.
Once the return is processed, generate the relevant certificates — Form 16, 16A, 16B, or 16C — from TRACES and issue them to each deductee within the prescribed timeline.
Most of this checklist is generated as part of the deduction and deposit process itself, rather than gathered separately at filing time.
Each certificate is generated from TRACES only after the corresponding return has been successfully processed — so a delayed return means a delayed certificate for the deductee too.
| Certificate | Covers | Frequency | Due Date |
|---|---|---|---|
| Form 16 | Salary (Section 192) | Annual | Due by 15 June following the end of the financial year |
| Form 16A | Non-salary payments (sections reported via Form 26Q/27Q) | Quarterly | Within 15 days from the due date of filing the corresponding TDS return |
| Form 16B | Property purchase (Section 194-IA) | Per transaction | Within 15 days from the due date of filing Form 26QB |
| Form 16C | Rent (Section 194-IB) | Per transaction | Within 15 days from the due date of filing Form 26QC |
A filed TDS return is never simply refiled from scratch — errors are fixed through a specific correction category matched to what actually needs to change.
Corrects deductee-level details such as name or PAN, without touching the challan or the amount already reported.
Corrects details of a challan already reported in the return — BSR code, deposit date, or challan serial number.
Adds an entirely new challan or deductee record to a return that has already been filed and processed.
Updates the PAN linked to a specific deductee record across the return, commonly used where the original PAN was incorrect or has since changed.
Adds or updates the salary breakup records specific to Annexure II of Form 24Q, relevant only to the annual salary statement filed with the Q4 return.
Corrections can be filed an unlimited number of times, either through TRACES' online correction facility for simpler changes, or offline using the RPU/FVU workflow for more complex ones. Either way, every correction must start from the latest consolidated (conso) file downloaded from TRACES, since starting from an outdated file risks overwriting a correction that was already processed.
TDS return defaults tend to stack — a single late or incorrect filing can trigger a fee, a penalty, and interest simultaneously.
| Non-Compliance | Provision | Consequence |
|---|---|---|
| Late filing of TDS return | Section 234E | Fee of ₹200 per day of delay, capped at the total TDS/TCS amount for that return |
| Incorrect or non-filing of TDS return | Section 271H | Penalty ranging from ₹10,000 to ₹1,00,000 |
| Non-deduction of TDS | Section 201(1A) | Interest at 1% per month or part thereof from the date tax was deductible to the date it is actually deducted |
| TDS deducted but not deposited | Section 201(1A) | Interest at 1.5% per month or part thereof from the date of deduction to the date of actual deposit |
| Business expenditure disallowance | Section 40(a)(ia) | 30% of the expenditure disallowed while computing business income, where TDS on a payment to a resident was not deducted or deposited |
| Wilful failure to deduct or deposit TDS | Section 276B | Prosecution with rigorous imprisonment ranging from 3 months to 7 years, along with a fine |
*The Section 271H penalty can be waived if the return is filed and the TDS, interest, and late fee are all paid within one year of the due date. The Section 234E late fee, however, is mandatory and cannot be waived regardless of the reason for the delay.
Correctly computed, on-time returns avoid the daily fee under Section 234E and the additional penalty exposure under Section 271H for incorrect or missed filings.
Precise deductee-wise reporting ensures every employee and vendor sees their TDS credit reflected correctly in Form 26AS and AIS, without the mismatches that trigger their own tax notices.
Filing on time keeps Form 16, 16A, 16B, and 16C generation on schedule, so employees and vendors receive valid certificates in time for their own return filing.
Where TRACES flags a short deduction, short payment, or late deposit as a "default," prompt professional review helps identify the cause and resolve it before interest keeps compounding.
Errors in a filed return — a wrong PAN, an unmatched challan, a missed deductee — can be fixed through the correct correction category without restarting the entire filing.
A structured quarterly filing cadence, tracked well ahead of each due date, avoids the last-minute scramble that leads to data entry errors and missed deadlines.
Have questions about TDS return filing for your business? Let our experts help you figure out the right compliance approach.
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