How to File TDS Returns in India
Every deductor (employer or business) who deducts Tax Deducted at Source (TDS) must file quarterly TDS returns with the Income Tax department. The return maps TDS deductions to individual PAN holders and enables them to claim credit in their ITR. Accurate, timely TDS returns prevent interest, penalties, and notices to both deductor and deductee.
Before you start
- TAN (Tax Deduction and Collection Account Number) of the deductor
- Challan details (BSR code, challan date, serial number, amount) for TDS deposited
- PAN of all deductees
- Payment details (salary/contract amount, TDS deducted) for each deductee
- TRACES portal registration (for downloading Form 16/16A)
Step-by-step
Identify the Applicable Return Form
Use Form 24Q for TDS on salaries (Section 192). Use Form 26Q for TDS on non-salary payments (rent, professional fees, contractor payments — Sections 194C, 194I, 194J, etc.). Use Form 27Q for TDS on payments to non-residents. Use Form 27EQ for Tax Collected at Source (TCS).
Prepare the TDS Data
Compile all TDS deductions for the quarter: deductee PAN, nature of payment, gross payment amount, TDS rate applied, and TDS deducted. Cross-check against your books of accounts and the TDS challans deposited during the quarter.
Validate Using RPU (Return Preparation Utility)
Download the TDS Return Preparation Utility (RPU) from the TRACES portal. Enter all deductee and challan data in the RPU. Run the built-in File Validation Utility (FVU) to check for errors — common errors include invalid PAN, challan mismatch, and section code errors. Fix all errors before proceeding.
Submit the Return to TIN-FC or TRACES
File the validated .fvu file on TRACES (if using DSC online submission) or submit physically at a TIN Facilitation Centre (TIN-FC). Online submission via TRACES is recommended. The system generates an acknowledgment with a Provisional Receipt Number (PRN).
Track Status and Correct if Needed
Monitor the return status on TRACES 7–10 days after filing. If any deductee's PAN is reported as invalid or unmatched, file a Correction Statement to rectify. Unresolved PAN mismatches result in short-credit notices to deductees.
Issue Form 16 / Form 16A
After the return is processed, download Form 16 (salary) or Form 16A (non-salary) from TRACES for each deductee. Form 16 must be issued by June 15; Form 16A must be issued within 15 days of the due date of each quarterly return. These certificates are the deductee's proof for claiming TDS credit.
Common mistakes to avoid
- Depositing TDS without quoting the correct Section code — wrong section codes create mismatches in the deductee's Form 26AS and lead to TDS credit denial.
- Filing returns with invalid or misquoted PANs — the department levies a penalty of ₹20,000 per return for incorrect PAN under Section 272B.
- Missing the quarterly deadline — late filing attracts a fee of ₹200 per day under Section 234E from the due date until the return is filed, subject to a maximum equal to the TDS deducted.
- Not filing a NIL return — even if no TDS was deducted in a quarter, a NIL TDS return is required in most cases; non-filing results in system-generated notices.
Frequently asked questions
What are the quarterly TDS return deadlines?
Q1 (Apr–Jun): July 31; Q2 (Jul–Sep): October 31; Q3 (Oct–Dec): January 31; Q4 (Jan–Mar): May 31 (Form 24Q for salary: June 1). Salary Q4 deadline is June 1 to allow Form 16 issuance by June 15.
Can I revise a filed TDS return?
Yes. Correction Statements can be filed on the TRACES portal to correct PAN errors, challan mismatches, or deductee data. Multiple corrections can be filed; each is called a 'Correction Statement' with an incremental number.
What is the penalty for not issuing Form 16 on time?
Section 272A(2)(g) levies a penalty of ₹100 per day of default for failure to issue Form 16 or Form 16A within the prescribed time, up to a maximum equal to the TDS deducted.
My deductee says TDS is not showing in Form 26AS — what do I do?
This happens when the TDS was deposited against the wrong PAN or an incorrect challan. File a Correction Statement on TRACES to map the TDS correctly. The credit typically appears in the deductee's Form 26AS within 3–5 working days after the correction is processed.
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