TDS Return Due Dates: Filing, Payment & Penalty Guide

What Is a TDS Return?

A TDS Return is the statement that a deductor must submit to the Income Tax Department, detailing the Tax Deducted at Source during the relevant period. The return includes information about the deductor, the deductees, the nature of payments made, the TDS amounts deducted, and the TDS amounts deposited with the government.

Tax Deducted at Source, or TDS, is a mechanism under the Income-tax law where the payer deducts tax before making certain payments such as salary, interest, rent, professional fees, or contractor payments. TDS is technically the liability of the income receiver. However, the law requires the payer to deduct advance tax in specified cases, which helps improve compliance and collection. The recipient receives the net amount after TDS deduction and claims credit for the withheld tax through Form 26AS when filing the income tax return

Important: not every TDS compliance is a regular quarterly TDS return. In some cases, the law requires a challan-cum-statement instead of a normal quarterly return. This distinction is important and often misunderstood.

TDS by Employers: Employers deduct TDS on salary under Section 384 (formerly Section 192) based on the employee's estimated taxable income and the applicable tax regime (Default or Opt-out) chosen by the employee. These are reported in Form No. 138 (formerly Form 24Q).

TDS by Banks: Banks deduct TDS on interest income under Section 401 (formerly Section 194A) where the law requires it (typically above Rs 40,000, or Rs 50,000 for senior citizens). If the depositor has not submitted PAN, a higher rate applies as per the law in force.

Example: TDS on Office Rent

ABC Pvt Ltd pays office rent of Rs 1,00,000 per month. Under the regular rent TDS provision (Section 402, formerly Section 194-I) applicable to the company, TDS must be deducted at the applicable rate before each payment. The company must deposit the TDS by the 7th of the following month and report it in the quarterly statement Form No. 140 (formerly Form 26Q).

Important: It is not correct to assume that all rent payments follow the same TDS route. A company paying rent is always subject to the regular TDS provisions (Section 402) and reports it in quarterly statements. An individual or HUF covered by Section 403 follows the special provision and files Form No. 141 instead.

How to File TDS Returns: Step-by-Step Guide 

For transactions occurring on or after 1st April 2026, the workflow for regular quarterly returns has been updated as follows:

• Visit the Filing Portal: Log in to the e-Filing portal using your TAN credentials.
• Navigate to Forms: Go to e-File > Income Tax Forms > File Income Tax Forms.
• Select the Correct Act: You must specifically select "Forms as per Income Tax Act 2025" for all FY 2026-27 filings.
• Select New Form Numbers:
• • Form 138 (replacing 24Q) for Salary.
  • Form 140 (replacing 26Q) for Resident Non-Salary payments.
  • Form 144 (replacing 27Q) for Non-Resident payments.
• Prepare and Validate: Use the updated Return Preparation Utility (RPU) and File Validation Utility (FVU) specifically designed for the 2026 Rules .
• Upload and Verify: Upload the validated file and complete verification via DSC or Aadhaar OTP.
• Confirmation: Save the Acknowledgement Receipt Number (ARN) generated by the system. 

Important: This process is for regular quarterly statements. If you are filing for transactions like property purchase, high-value rent, or professional fees under the special provisions, the workflow is different. For transactions on or after 1st April 2026, Form No. 141 is used as a unified challan-cum-statement (replacing 26QB, 26QC, 26QD, and 26QE). These are filed via PAN login rather than TAN login and do not require the standard RPU/FVU quarterly filing process.

Penalties for Missing TDS Deadlines

Missing TDS deadlines can trigger different consequences depending on the nature of the default. It is not correct to treat every default as the same.

TDS penalty consequences fall into four separate categories, each triggered by a different type of default, each carrying different interest or fee exposure:

1. TDS was deductible but not deducted on time
2. TDS was deducted but not deposited on time
3. The TDS statement was filed late
4. The TDS statement was filed with incorrect information

Each of these has different consequences.

Section 427: Late Filing Fee

Under Section 427 (formerly Section 234E), a late filing fee of Rs 200 per day is levied when a TDS or TCS statement is filed after the due date. The fee is charged from the day after the due date until the day the statement is actually filed. The total fee cannot exceed the total TDS amount for the relevant statement period.

Example: If Rs 50,000 was deducted in Q1 and the return is filed 30 days late, the late fee is 30 x Rs 200 = Rs 6,000. If the calculated fee exceeds the total TDS amount for that period, it is capped at that TDS amount.

Important: Section 427 applies to late filing of the statement. It does not apply merely because TDS payment was late if the statement itself was not filed late.

Additionally:

Interest at 1% per month, or part of month, is charged from the date tax was deductible to the date it was actually deducted under the relevant provisions of the Income Tax Act, 2025.

Interest at 1.5% per month, or part of month, is charged from the date of deduction to the date of deposit.

Interest is calculated on a month or part-month basis, so even a short delay spilling into another month can trigger interest for that part of the month.

Section 475: Penalty & Relief Conditions

Beyond the daily late filing fee, the Assessing Officer can levy an additional penalty of Rs 10,000 to Rs 1,00,000 under Section 475 (formerly Section 271H) if:

• TDS returns are not filed within the prescribed time, or
• Incorrect information is furnished in the TDS return

How to Avoid the Larger Penalty in Delayed Filing Cases

The penalty under Section 475 is not levied in delayed filing cases if all required conditions are satisfied, including:

• the TDS has been deposited to the government
• the late filing fee under Section 427 (formerly 234E) and applicable interest have been paid
• the TDS or TCS return is filed within one month from the due date

If you have missed a TDS return deadline, acting quickly and clearing tax, fee, and interest while filing within the permitted period is critical.

Section 524: Criminal Prosecution

Willful failure to deposit TDS after deduction is a serious default under Section 524 (formerly Section 276B) of the Income-tax law. Upon conviction, the deductor can face imprisonment and fine.

However, it is not correct to present prosecution as the automatic outcome of every delay. Prosecution is generally associated with serious or willful failure to deposit deducted tax, not every routine short delay. The safest and most accurate compliance position is this: once TDS is deducted, it must be deposited on time, and prolonged or deliberate failure can create prosecution risk.

Additional Consequence - Expense Disallowance

If TDS is not deducted or deposited as required, 30% of the related expense is disallowed under Section 54 (formerly Section 40(a)(ia)) while computing business income. This can directly increase taxable profit. So TDS default is not just a late fee issue. It can also affect tax computation.

TCS/TDS Compliance Checklist

Use this checklist each quarter to stay fully compliant:

• Deducted TDS at the correct rate as per the 2025 Act rates.
• Deposited TDS by the 7th of the following month, or 30th April for March deductions.
• Identified whether the case requires a regular quarterly return or a challan-cum-statement (Form 141).
• Identified the correct filing form such as 138, 140, 143, or 144.
• Prepared return data using the 2026 utility or workflow.
• Validated the file where required using the new FVU.
• Filed the quarterly return or challan-cum-statement before the due date.
• Generated and issued Form 131, 132, 133, or 134 within the deadline.
• Verified challan mapping and return accuracy.
• Checked that deductee credit reflects correctly in their tax statement.
• Reviewed FY 2026-27 format changes for all payments from April 2026 onward.

Businesses managing TDS across salaries, rent, contractor payments, and non-resident payments can use accounting software that automatically calculates deduction rates, tracks challan deposits, and flags upcoming quarterly return deadlines, reducing the risk of the 200-per-day late fee under Section 427.