TDS return filing is the quarterly reporting of tax you deducted at source and deposited with the government, deductee by deductee. From 1 April 2026 these statements are filed under the Income-tax Act, 2025 in new forms (Form 138 for salary, Form 140 for resident non-salary payments, Form 144 for non-residents), replacing the familiar 24Q, 26Q and 27Q. Every person holding a TAN who deducts tax must file them.
What is TDS return filing?
When you deduct tax from a salary, rent, professional fee, contractor payment or a payment to a non-resident, two separate obligations arise. First, you must deposit the tax with the government by challan. Second, you must tell the department whose tax it was, through a quarterly TDS statement. The statement links each rupee deposited to the deductee's PAN, which is how the amount shows up in the deductee's Annual Information Statement and becomes available as credit in their income-tax return.
The Income-tax Act, 2025 came into force on 1 April 2026 and renumbered almost everything. Quarterly statements are now required by section 397(3)(b), with the procedure in Rule 219 of the Income-tax Rules, 2026. Form 24Q has become Form 138, 26Q is now Form 140, 27Q is Form 144 and the TCS statement 27EQ is Form 143. Salary TDS now sits in section 392 and most other deductions in section 393, while lower or nil deduction certificates moved from section 197 to section 395.
The law that applies depends on when the deduction event happened. Deductions relating to credits or payments up to 31 March 2026 are reported in the old forms under the 1961 Act, even if the statement is filed later in 2026. That is why FY 2026-27 is a transition year: the Q4 statement for January–March 2026 was filed in the old format by 31 May 2026, while Q1 of tax year 2026-27 onwards uses the new forms. Correction statements for old periods also stay in the old series.
Who needs to file a TDS return?
Anyone who has a Tax Deduction and Collection Account Number (TAN) and has deducted tax during the quarter must file a statement for that quarter. In practice this includes:
- Companies and LLPs paying salaries, rent, professional or technical fees, commission or contract charges above the threshold limits
- Partnership firms, trusts, societies and NGOs that deduct tax on salaries or vendor payments
- Individuals and HUFs who are subject to tax audit or otherwise liable to deduct tax on business payments
- Employers deducting tax on salary – Form 138, filed every quarter even if only a few employees are above the taxable limit
- Anyone paying interest, fees, royalty or other sums to non-residents – Form 144
- Sellers liable to collect tax at source (TCS) on specified goods or transactions – Form 143
- Government offices and Drawing and Disbursing Officers, which also report book-entry deductions
Benefits of TDS Return Filing
Your deductees get their credit
Employees, landlords and vendors can claim TDS only when it reflects against their PAN. A correct, timely statement prevents angry calls from vendors whose credit is missing in their AIS.
No day-wise late fee
The ₹200-per-day fee under section 427 starts the day after the due date and accumulates quietly. Filing on time is the only way to avoid it, because it cannot be waived.
Protects your expense deduction
Failure to deduct or deposit tax can lead to part of the related expense being disallowed in your own income-tax assessment. Clean TDS records are the first thing a tax auditor checks.
Clean record for lower-deduction and refund claims
Departmental systems compare TDS statements with challans and returns. A compliant history helps when you or your vendors apply for lower deduction certificates under section 395.
Certificates on time
Form 130 (earlier Form 16) and Form 131 (earlier Form 16A) can be downloaded from TRACES only after the statement is processed. Late statements mean late certificates and unhappy employees at ITR season.
When a TDS statement is mandatory
Filing is triggered by deduction, not by turnover alone. Check these conditions for each quarter:
- You hold a TAN – obtaining one is itself compulsory before you deduct tax
- At least one payment in the quarter crossed the threshold for deduction under sections 392–394 of the 2025 Act (or the corresponding 1961 Act sections for old periods)
- Tax was deducted, or should have been deducted – non-deduction must still be reported correctly, for example with lower-deduction certificate references
- Where a deductee submitted a no-deduction declaration, the transaction is generally still reported in the statement with the appropriate flag
- Property buyers, tenants paying high rent and individuals paying contractors or professionals who are not otherwise liable to hold a TAN use the challan-cum-statement Form 141 (earlier 26QB/26QC/26QD) instead of a quarterly return
Documents required
Deductor details
- TAN and PAN of the deductor
- Details of the responsible person (name, designation, PAN, mobile, e-mail)
- Login credentials for the e-filing and TRACES portals, or authorisation for us to work through them
- Previous quarter's acknowledgement (token) number if the statement is a regular quarterly return after an earlier filing
Payment and challan data
- Challan identification details for every deposit: BSR code, date, challan serial number and amount
- Party-wise ledger of payments with nature of payment, date of credit or payment and amount
- Rate applied and section or payment code used for each deduction
Deductee information
- PAN of every deductee, verified as valid and operative
- Lower or nil deduction certificates issued under section 395 (or old section 197), with certificate numbers
- Form 121 declarations (earlier 15G/15H) where deduction was not made
- For non-residents: tax residency certificate, Form 10F details and treaty position relied on
Salary-specific data (Form 138)
- Monthly salary register and tax computation for each employee
- Investment and deduction proofs collected from employees for the Q4 annexure
- Tax regime chosen by each employee
Step-by-step TDS return filing process
This is the sequence we follow for every quarter. The reconciliation steps before upload matter more than the upload itself.
Identify the correct form and law
We first decide whether the period falls under the 1961 Act or the 2025 Act, then pick the form: 138 for salary, 140 for resident non-salary payments, 144 for non-residents, or 143 for TCS. A single deductor often files two or three forms in the same quarter.
Collect and clean the payment data
Your ledgers are mapped to the correct payment codes and rates. We flag payments where tax should have been deducted but was not, and those where a higher rate applies because the deductee has no valid PAN.
Match challans with deductions
Each deduction is tagged to a challan, and challan status is checked online to confirm the deposit is booked in your TAN. Unconsumed balances and short deposits are identified now, before the department finds them.
Verify PANs in bulk
Deductee PANs are validated through TRACES. Invalid or inoperative PANs are the single largest cause of short-deduction notices, so we ask you for corrections before filing.
Prepare and validate the statement
The statement is prepared in the department's Return Preparation Utility and validated with the File Validation Utility (FVU), which produces the upload file. Validation errors are fixed at source rather than overridden.
Upload and verify
The validated file is uploaded on the income-tax e-filing portal under your TAN login and verified electronically, generating a token or acknowledgement number. Keep this number; it is needed for any later correction.
Track processing by CPC-TDS
After processing, CPC-TDS issues an intimation listing any short payment, short deduction, late deduction interest or late fee. We review the justification report and advise whether to pay or correct.
Issue certificates
Once processed, Form 130 (salary) and Form 131 (non-salary) are downloaded from TRACES and shared with deductees. Only TRACES-generated certificates are valid; self-made formats are not accepted.
Government fees and charges
There is no government fee for filing a TDS statement on time. Costs arise only when you are late or have defaults in deduction or deposit.
| Item | Amount | Note |
|---|---|---|
| Filing a quarterly TDS or TCS statement on time | ₹0 | No filing fee is charged by the department |
| Late filing fee | ₹200 per day | Section 427 of the 2025 Act (earlier s.234E); total cannot exceed the tax deductible or collectible, and must be paid before the late statement is furnished |
Professional charges are quoted separately after reviewing your case. Government fees are paid directly to the authority.
Due dates and how long it takes
Preparation usually takes a few working days once complete data is available; the time goes into reconciliation, not the upload. Processing by CPC-TDS then typically follows in the next few days to weeks, after which certificates can be downloaded.
| Stage | Typical time |
|---|---|
| Q1 (April–June) statement | Due 31 July |
| Q2 (July–September) statement | Due 31 October |
| Q3 (October–December) statement | Due 31 January |
| Q4 (January–March) statement | Due 31 May of the following year |
| TDS deposit for a month | Generally by the 7th of the next month; 30 April for March |
Corrections and record keeping
A filed statement cannot be edited, but it can be corrected. Once CPC-TDS has processed the original, a correction statement can be filed to fix PANs, challan details, amounts or add missed deductees. The department's FAQs state that corrections are allowed within two years from the end of the relevant tax year – for example, a Q3 statement of 2026-27 can be corrected up to 31 March 2029. Keep challans, workings and deductee declarations for at least as long as the assessment for that year can be reopened.
Compliance after filing
- Download and issue Form 130 to employees after the Q4 statement and Form 131 to vendors every quarter
- Check the CPC-TDS intimation and the TRACES default summary; pay any demand or file a correction
- Respond to short-deduction or invalid-PAN notices within the time given
- Reconcile TDS reflected in your own Form 26AS/AIS with what customers deducted from you
- Update the deductor master on TRACES when the responsible person or address changes
- Carry forward unconsumed challan balances correctly into the next quarter
Old vs new TDS return forms
| Purpose | Up to 31 March 2026 (1961 Act) | From 1 April 2026 (2025 Act) |
|---|---|---|
| Salary TDS statement | Form 24Q | Form 138 |
| Resident non-salary TDS | Form 26Q | Form 140 |
| Payments to non-residents | Form 27Q | Form 144 |
| TCS statement | Form 27EQ | Form 143 |
| Salary TDS certificate | Form 16 | Form 130 |
| Non-salary TDS certificate | Form 16A | Form 131 |
| Late filing fee | Section 234E | Section 427 |
Common mistakes that trigger notices
Filing the new form for an old period
Deductions for credits or payments made up to 31 March 2026 belong in the old 24Q/26Q/27Q series. Mixing them up leads to rejection or mismatches that are tedious to unwind.
Wrong payment code
The 2025 Act uses a table-based structure for non-salary TDS. Choosing the wrong entry changes the applicable rate and produces a short-deduction demand even though the tax was paid.
Invalid or inoperative PANs
A PAN that is not linked to Aadhaar or is mistyped attracts the higher rate. The demand lands on you, not the deductee.
Challan booked under the wrong head or year
A challan paid under the wrong minor head, assessment year or TAN will not match. Challan correction must be sought separately, so this is caught before filing.
Ignoring the late fee in the intimation
Many deductors file late and assume the matter is closed. The section 427 fee is raised in the processing intimation and becomes an outstanding demand against your TAN.
Nil quarters handled carelessly
If you have a TAN but no deductions in a quarter, submit the online declaration that no statement is due for that quarter rather than simply staying silent, so that non-filing notices are not generated.
Penalties for late or incorrect TDS returns
Late filing attracts an automatic fee, and persistent default or incorrect information can attract a separate penalty. Interest also runs on late deduction or late deposit of tax, at rates prescribed in the Act, and failure to deduct can affect the deductibility of the related expense. For periods up to 31 March 2026, the corresponding 1961 Act provisions (sections 234E and 271H) continue to apply.
| Default | Consequence | Provision |
|---|---|---|
| Statement filed after the due date | ₹200 per day of default, capped at the tax deductible | Section 427, Income-tax Act 2025 (earlier s.234E) |
| Failure to file the statement or furnishing incorrect information | Penalty as prescribed, which may be avoided if tax, fee and interest are paid and the statement is filed within the permitted window | Sections 461 and 465(2)(g), Income-tax Act 2025 (earlier s.271H) |
Practitioner tips
- Run a TRACES PAN verification before every quarter, not just at year end. Employees and vendors change PAN status more often than you would expect, especially when Aadhaar linking lapses.
- Keep one challan per payment category where practical. Splitting one large challan across salary and non-salary statements works, but it makes later correction harder.
- If a vendor gives you a lower deduction certificate, record the certificate number and its limit in your accounts. Once the limit is exhausted, normal rates apply automatically and statements must reflect this.
- For Q4 of Form 138, finalise the employee investment proofs by early April. Most Q4 delays are caused by HR data, not by the return itself.
- Download the justification report even when the intimation shows no demand. It often reveals minor issues, such as late deduction interest on a single entry, which are cheaper to fix immediately.
How Lawgical Guru helps
Quarterly filing
Preparation, validation and upload of Forms 138, 140, 144 and 143, along with old-series statements for pre-April 2026 periods.
Pre-filing reconciliation
We reconcile your ledgers, challans and PANs and send you a short exception list before anything is filed.
Corrections and defaults
We analyse CPC-TDS intimations, file correction statements and help clear defaults appearing on TRACES.
Certificates
We download Form 130 and Form 131 from TRACES and share them in a format that is easy to forward to employees and vendors.
Transition guidance
We map your payment types to the new sections and payment codes under the 2025 Act so your accounting team deducts correctly from day one.
TDS Return Filing: frequently asked questions
What is the due date for TDS return filing in 2026-27?
Under the Income-tax Act, 2025, quarterly TDS statements are due by 31 July for April–June, 31 October for July–September, 31 January for October–December and 31 May for January–March. These dates apply to Forms 138, 140 and 144. Tax itself must be deposited earlier, generally by the 7th of the following month.
Has Form 26Q been replaced?
Yes, for deductions made from 1 April 2026. Form 26Q has been replaced by Form 140 under the Income-tax Rules, 2026. Form 24Q has become Form 138 and Form 27Q has become Form 144. For deductions relating to periods up to 31 March 2026, including corrections, you continue to use the old forms.
What is the late fee for a delayed TDS return?
Section 427 of the Income-tax Act, 2025 levies a fee of ₹200 for every day the default continues. The total fee cannot exceed the amount of tax deductible for that statement, and it has to be paid before the late statement is furnished. It replaces section 234E of the old Act.
What is the new number for Form 16?
Form 16, the salary TDS certificate, is now Form 130 under the Income-tax Rules, 2026. Form 16A for non-salary deductions is now Form 131. Both are downloaded from TRACES after the related quarterly statement is processed; for earlier years the old Form 16 and 16A remain valid.
Do I need to file a TDS return if there was no deduction in a quarter?
If you hold a TAN but made no deductions in a quarter, a statement is not required for that quarter. However, recording this through the declaration facility on the portal is advisable, because otherwise the system may treat the quarter as a non-filing and send reminders.
Can I revise a TDS return after filing?
Yes. Once CPC-TDS processes the original statement, you can file a correction statement to fix PANs, challan details, amounts or add missing entries. The department's FAQs allow corrections within two years from the end of the relevant tax year. You need the token number of the original statement.
Who files Form 141 instead of a quarterly TDS return?
Form 141 is a challan-cum-statement used for specified one-off deductions such as purchase of immovable property, rent paid by certain individuals and payments to contractors or professionals by individuals not required to obtain a TAN. It replaces Forms 26QB, 26QC and 26QD and does not require a TAN.
Is a TDS return the same as paying TDS?
No. Paying TDS means depositing the deducted amount through a challan. The TDS return is the statement that tells the department whose tax that deposit represents. Both are mandatory; paying without filing leaves deductees without credit and attracts the late fee.
What happens if a deductee's PAN is wrong in my TDS return?
The credit will not reach the right person and CPC-TDS may raise a short-deduction demand, treating the entry as one without a valid PAN. Correct it by filing a correction statement with the right PAN as soon as the error is noticed.
Can TDS returns be filed offline?
TDS statements must be furnished electronically. You prepare the file in the department's utility, validate it with the File Validation Utility and then upload it on the e-filing portal, or submit the validated file through a TIN facilitation centre.
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Reviewed by Satyam Gupta, Company Secretary (CS) & Advocate
8+ years of industry experience. This page was last reviewed on 16 October 2026 against the official sources below. Rules and fees change — confirm on the official portal before you apply.