Quarterly returns & challans

Category: Income Tax. From ₹1,999/qtr. Typical timeline: Quarterly.

Overview

TDS return filing is the quarterly reconciliation every deductor — companies, LLPs, and individuals covered under tax audit — must submit to report tax deducted at source on salaries, contractor payments, rent, and professional fees. Filed as Form 24Q (salaries), 26Q (other domestic payments), 27Q (payments to non-residents) or 27EQ (TCS), the return feeds directly into the deductee's Form 26AS and AIS, so accuracy and timeliness protect both the deductor from penalty and the deductee from mismatched tax credit.

Who needs it

• Businesses paying salaries, rent, professional fees or contractor bills above TDS threshold limits
• Companies and LLPs with a valid TAN making any TDS-liable payment during the quarter
• Employers deducting TDS on salary under Section 192 who must issue Form 16 to employees

Eligibility

• Any person or entity that has deducted tax at source under Chapter XVII-B of the Income Tax Act
• Companies, firms, and individuals/HUFs liable to tax audit in the preceding financial year making specified payments
• Government offices and organisations disbursing salaries, contract, or rent payments above threshold limits

Documents required

• TAN and PAN of the deductor
• Deductee-wise PAN, payment amount and TDS deducted for the quarter
• Challan details (CIN) for TDS deposited during the quarter
• Lower/nil deduction certificates, if any, issued to deductees
• Details of any TDS corrections or previous return acknowledgment for revisions

Process

1. Data collection — Compile deductee-wise payment and TDS figures along with challan details for the quarter.
2. Return preparation — Prepare the applicable form (24Q/26Q/27Q/27EQ) using the RPU/software and validate through the File Validation Utility.
3. Challan reconciliation — Match TDS deposited against challans on TRACES/OLTAS to eliminate mismatches before filing.
4. Filing on TIN-FC/portal — Upload the validated FVU file to the TRACES/Income Tax e-filing TDS module and generate the acknowledgment.
5. Form 16/16A generation — Download and issue TDS certificates to deductees once the return is processed.

Government fees

• TDS Return Filing (TRACES portal): Nil — no government fee for filing
• Late Filing Fee (Section 234E): ₹200 per day of delay, capped at the TDS amount

Professional fee

Professional fee starts at ₹1,999 per quarter and covers return preparation, challan reconciliation, FVU validation and filing for a single form; multi-form or high-volume deductee filings are quoted separately.

Timeline

A quarter's return is typically prepared and filed within 3-5 working days of receiving complete challan and deductee data; delays usually stem from missing PAN details or challan mismatches.

Deliverables

• Filed TDS return acknowledgment (Form 24Q/26Q/27Q/27EQ)
• Consolidated Form 16/16A for issuance to deductees
• Challan-to-deduction reconciliation statement
• Justification report resolution summary, where applicable

Frequently asked questions

What happens if TDS is deducted but not deposited on time?

Interest under Section 201(1A) at 1.5% per month applies from the date of deduction to the date of deposit, in addition to the standard late filing fee.

Can a TDS return be revised after filing?

Yes — a correction statement can be filed on TRACES to fix PAN errors, challan mismatches or short/excess deduction entries.

Is a TDS return required if no tax was deducted in a quarter?

A nil return is not mandatory, but filing one avoids automated notices from the department expecting a return based on prior filing history.

Common mistakes

• Quoting an incorrect or invalid deductee PAN, which blocks TDS credit from reflecting in Form 26AS
• Mismatching challan amounts against actual tax deposited, triggering a defaults notice
• Missing the quarterly due date and letting the Section 234E fee accumulate daily
• Not applying for or honouring a lower-deduction certificate submitted by a deductee

Penalties for non-compliance

• Late filing fee of ₹200 per day under Section 234E, restricted to the total TDS amount for that return
• Penalty of ₹10,000 to ₹1,00,000 under Section 271H for incorrect or non-filing beyond one year
• Interest at 1% per month for non-deduction and 1.5% per month for non-deposit under Section 201

Legal references

• Income Tax Act, 1961, Chapter XVII-B — provisions governing deduction of tax at source
• Section 200(3) — obligation to file a TDS statement each quarter
• Section 234E and 271H — fee and penalty for delayed or incorrect filing
• Income Tax Rules, 1962, Rule 31A — form and manner of TDS return filing