How to File TDS Return Online — Step-by-Step Guide

Overview of TDS Return Filing

TDS return filing reports the details of TDS deducted and deposited to the Income Tax Department. TDS return filing should be done quarterly and applies to employers, businesses, and individuals making certain payments like salary, rent, commission, interest, and professional fees.

Rate of TDS Deduction

TDS rates vary based on payment type:

• Salary – Based on income tax slab
• Interest on fixed deposit – 10%
• Rent – 10%
• Contractor payment – 1% or 2%
• Professional services – 10%
• Technical services – 2%

Note: Check the latest TDS chart for exact rates applicable to your transactions.

Late Filing Fees, Penalties & Consequences for TDS Returns

When a TDS return is filed late, wrongly, or not filed at all, both cost and risk increase for the deductor, it is not just a technical miss. It affects your cash flow, your compliance rating and your deductees’ ability to claim TDS credit.

1. Late filing fee – Section 234E

• A fee of ₹200 per day of delay is charged from the next day after the due date till the date of filing.
• This fee is capped at the amount of TDS for that return.
• It is a mandatory levy and has to be paid before the return can be processed.

2. Penalty for non filing or incorrect filing – Section 271H

• Separate from 234E, the Assessing Officer can levy a penalty between ₹10,000 and ₹1,00,000 if.
• • The TDS return is not filed at all, or
  • It contains incorrect details of PAN, challan, TDS amount etc.
• In many cases, penalty may not be levied if.
• • TDS is correctly deducted and paid.
  • The delayed or corrected statement is filed within the prescribed relief window.

3. Interest on delayed deduction or payment
Even if the return is filed, interest is payable if.

• TDS was not deducted on time.
• TDS was deducted but paid late to the government.
  This interest is in addition to the 234E fee and any 271H penalty.

4. Practical consequences for deductor and deductees

• Deductees’ Form 26AS or AIS does not show TDS on time, leading to refund delays and queries.
• The deductor may get notices, demand intimations and short deduction reports.
• Repeat non compliance can hurt the organisation’s reputation and can be a negative point in bank, investor or government evaluations.

For CAs, it is important to educate clients that filing accurate TDS returns on time is as important as deducting and paying TDS itself.

Documents Required for TDS Filing

The following documents are required for filing your return:

• TAN and PAN details
• Challan details of TDS payment
• PAN of all deductees
• Payment amount and TDS deducted
• TDS return form (26Q, 24Q, etc.)
• Digital Signature Certificate (for online verification)

Having these documents ready ensures smooth filing without errors.

How to Correct or Revise a TDS Return?

TDS returns often need correction due to wrong PAN, challan mismatch, wrong section, amount errors or incorrect deductee details. The good news is that TDS returns can be corrected multiple times until all mismatches and demands are resolved.

1. Identify the errors clearly
Before starting, list what is wrong.

• Wrong or missing PAN.
• Wrong challan number, date or amount.
• Wrong section code or nature of payment.
• Incorrect TDS amount or allocation to deductees.

This helps you choose the correct type of correction in the utility.

2. Download the consolidated file from TRACES

• Log in to the TRACES portal using the deductor’s credentials.
• Request and download the consolidated TDS file (Conso file) for the relevant form and quarter.
  This file is the base for preparing a correction statement.

3. Prepare the correction using RPU

• Import the Conso file into the Return Preparation Utility (RPU).
• Select the correction type (for example. update challan details, add or modify deductee records, correct PAN, etc.).
• Make the necessary changes and validate the file to generate the FVU file.

4. Upload the correction statement

• Log in to the income tax e filing portal as deductor.
• Go to the TDS section and choose upload TDS as a correction statement for the relevant form, quarter and financial year.
• Upload the FVU file and verify using DSC or EVC, as applicable.

5. Track status and resolve residual issues

• Monitor the correction status on TRACES and the e filing portal.
• If any short payment or short deduction demand remains, pay it and then file further corrections if needed.
• Once fully processed, updated information flows into deductees’ 26AS or AIS.

For CAs, the key is to make sure every correction is backed by proper working and documentation, and to close the loop by checking that demands are cleared and deductee credits appear correctly.