How to File a TDS Return: Quarterly Return Process, Forms and Due Dates

TL;DR

Every person responsible for deducting TDS must file the corresponding quarterly return — Form 24Q for salary, Form 26Q for non-salary domestic payments, Form 27Q for payments to non-residents, and Form 27EQ for TCS collection. Returns are filed on the Income Tax e-filing portal via TRACES, using a validated JSON file generated by your Tally or Excel-based software. The due date for most quarters is the 31st of the month following the quarter, and late filing attracts a penalty under Section 234E.

Who Must File a TDS Return

A TDS return must be filed by any person — individual, firm, company, or government body — who is registered under the Income Tax Act as a Tax Deductor and has deducted tax at source during the quarter.

Common TDS deductors in Gujarat:

• Manufacturing units in Surat, Ahmedabad, Vadodara, and Rajkot deducting TDS on contractor and professional fee payments
• Property owners (individuals or companies) in Bhavnagar, Gandhinagar, and other Gujarat cities deducting TDS on rent under Section 194I
• Hospitals and nursing homes deducting TDS on payments to doctors and pathologists under Section 194J
• Companies (including LLPs) making dividend, interest, or royalty payments
• Trusts and societies making specified payments

Key point: Even if no tax was deducted in a quarter (because payments were below the threshold), you may still need to file a NIL return to confirm the nil liability. Check whether your PAN is registered as a TDS deductor with the Income Tax Department.

Which TDS Return Form to File

The correct form depends on the type of payment and whether the recipient is a resident or non-resident.

Form	Purpose	Who Uses It
24Q	Salary payments and TDS deducted thereon	Every employer paying salary
26Q	All non-salary payments to resident individuals or firms (rent, contractor, professional fees, commission)	Individuals and firms deducting TDS on domestic payments
27Q	Payments to non-resident individuals, firms, or companies (fees, royalties, interest, dividends)	Any deductor making payments to non-residents
27EQ	TCS collection and filing	Every TCS collector

For most small businesses and professionals in Gujarat, Form 26Q covers the routine payments: rent to landlords, fees to doctors, payments to contractors, and commission payments.

Example: A textile trading firm in Surat pays ₹3 lakhs to a freelance designer (individual) for a fabric pattern. The firm must deduct TDS under Section 194J (1% since the payee is an individual) and file Form 26Q for that quarter.

TDS Return Due Dates

Quarter	Period Covered	Due Date
Q1	April – June	31st July
Q2	July – September	31st October
Q3	October – December	31st January
Q4	January – March	31st May

These are the standard due dates for all TDS/TCS return forms. If the due date falls on a Saturday, Sunday, or public holiday, the return is due on the next working day.

Important: For companies and TDS deductors who have authorised an AIR (Annual Information Return) filer, or where the number of PANs deducting exceeds a threshold, different rules may apply. Confirm your category on the Income Tax e-filing portal.

What You Need Before You Start

Before filing a TDS return, gather the following:

1. TDS challan details — The Challan Identification Number (CIN) for each tax deposit made during the quarter. Each CIN has three parts: BSR Code (7 digits) + Date of Payment (DDMMYYYY) + Serial Number (5 digits).
2. Form 16/16A/16B/16C — TDS certificates issued to deductees (employees, contractors, professionals). Form 16 is for salary (annual), Form 16A for non-salary, Form 16B for property, Form 16C for rent.
3. Employee/contractor PAN list — All PANs of persons to whom payments were made and TDS was deducted.
4. JSON file from accounting software — The return preparation utility (RPU) on the TRACES portal converts your Excel/Tally data into a validated JSON file ready for upload.
5. Digital Signature Certificate (DSC) — The return must be digitally signed. For companies and LLPs, a Class 2 or Class 3 DSC is mandatory. For individuals and firms, file via Electronic Verification Code (EVC) if not using a DSC.

Step-by-Step: How to File a TDS Return on the TRACES Portal

Step 1: Register or Log In on the Income Tax e-filing Portal

Go to incometax.gov.in and log in using your PAN as the user ID. If you are a new deductor, complete the registration process under “Register as Tax Deductor.”

Once registered, you can access the “TDS” section to file returns, download Form 16/16A, and view challan details.

Step 2: Download the Return Preparation Utility (RPU) from TRACES

TRACES (TDS Reconciliation Analysis and Correction Engine) is the platform that validates and processes all TDS returns.

1. Go to traces.in
2. Click “TDS” → “Downloads” → “RPU (Return Preparation Utility)”
3. Download the latest version of the RPU for your applicable form (24Q, 26Q, 27Q, or 27EQ)
4. Install the utility on your computer

The RPU works with data exported from Tally, Zoho Books, or any other accounting software that generates the correct ASCII format file.

Step 3: Prepare Your Data in the RPU

Open the RPU and select the correct form type (e.g., 26Q for a firm deducting TDS on contractor and professional fees). The utility has separate sections for:

• Deductee details — Name, PAN, section under which TDS was deducted, amount paid, TDS rate, TDS amount, and payment date for each person
• Challan details — The CIN for each tax deposit, the amount deposited under each minor head (e.g., 94A for fees to professionals)
• Summary — Total payments, total TDS deducted, total tax deposited, and balance

Fill in all deductee rows carefully. A common error is entering the wrong section code — for example, using Section 194C for a professional fee instead of Section 194J. The section determines the correct rate, and a mismatch triggers a validation error.

Step 4: Validate the Data in the RPU

The RPU has a built-in validator that checks:

• PAN format (must be valid and linked to Aadhaar)
• Section code validity (must match the payment type)
• TDS rate validity (e.g., 10% for professional fees under 194J, subject to threshold)
• Challan CIN completeness (all three parts present)
• TDS amount consistency with the payment amount and rate

Run the validator before generating the JSON file. Fix every error the validator flags — errors do not disappear after submission; they result in a defective return notice.

Step 5: Generate the JSON File

Once validation passes, click “Generate JSON” in the RPU. This creates the file you will upload to the Income Tax e-filing portal.

Step 6: Log In to the Income Tax e-filing Portal and Upload

1. Log in to incometax.gov.in
2. Go to “e-File” → “Income Tax Returns” → “TDS”
3. Select the relevant form type and assessment year (e.g., AY 2026-27 for FY 2025-26)
4. Upload the JSON file generated by the RPU
5. The portal will validate the JSON and display any errors

If errors appear, correct them in the RPU, regenerate the JSON, and re-upload.

Step 7: Verify the Return

Once the JSON is accepted, you must verify the return:

• With DSC: Sign digitally using your registered Class 2 or Class 3 DSC
• With EVC: Use the Electronic Verification Code sent to your registered mobile number and email
• Through bank: Use net banking to authorize the return filing

After verification, the Income Tax Department processes the return. A central processing notice (CPU) acknowledgement is generated with a unique token number confirming receipt.

Step 8: Download the Acknowledgment

Save the filing acknowledgment (Form 27A for 24Q/26Q/27Q, or the FVU file) for your records. This is proof of timely filing.

Common Mistakes That Trigger TDS Notices

Mistake 1: Wrong Section Code

Using the wrong TDS section is the most common error. For example, treating a professional fee payment as a contract payment (194C instead of 194J). Each section has a different rate and threshold. Always verify the section against the nature of the payment, not just the name on the invoice.

Mistake 2: PAN Not Quoted or Invalid PAN

TDS certificates (Form 16A) cannot be issued without a valid PAN of the deductee. If a contractor or professional refuses to share their PAN, you must deduct TDS at a higher rate under Section 206AA. Always collect PAN before making significant payments.

Mistake 3: Incorrect Challan Identification Number

Every TDS deposit generates a CIN with three parts. If the CIN is entered incorrectly in the return, the tax appears as unpaid in Form 26AS and the deductee cannot claim credit. Always verify CIN details from the NSDL/CBIC portal after making a deposit.

Mistake 4: Filing After the Due Date

Returns filed after the due date attract a late filing fee of ₹200 per day under Section 234E, up to a maximum of the tax amount involved. For quarterly returns, this can accumulate quickly — a return filed 30 days late attracts a ₹6,000 fee even if no tax is due. Beyond the fee, late filing also makes deductees unable to claim TDS credit on time.

Mistake 5: Not Filing NIL Returns

If no TDS was deducted during a quarter, filing a NIL return is still required in most cases to confirm nil liability. A NIL return establishes that no tax was payable and prevents unnecessary follow-up from the Income Tax Department.

Mistake 6: Mismatch Between Form 16A and Return Data

Form 16A (TDS certificate) must match the TDS shown in the quarterly return for the same period. If the certificate shows a different amount than the return, deductees will face mismatches when claiming credit in their ITR. Use the “Form 16A Generator” on TRACES to prepare consistent certificates.

TDS Return Correction and Revised Returns

If you discover an error after filing, you can file a correction return using the TDS-COR (correction) utility on TRACES:

• Download the correction utility for the relevant form type
• Enter the original acknowledgment number and the fields you need to correct
• Common corrections: wrong PAN, wrong section, wrong amount, wrong challan details
• File the correction within a reasonable time — prolonged delays may attract scrutiny

Note that correction returns do not extend the original due date. The correction is an addition to, not a replacement of, the original return.

TDS and TCS: Parallel Filing Requirements

TCS (Tax Collected at Source) under Section 206C is the reverse of TDS — the seller collects tax from the buyer and remits it to the government. If you are a TCS collector (for example, selling goods over ₹50 lakhs or providing specified services), you must file Form 27EQ quarterly, separate from your TDS returns.

Both TDS and TCS are reported in separate forms and challans. The filing process is identical to TDS, but the utility and form type are different.

Documents to Maintain After Filing

Retain the following for at least 6 years from the end of the relevant assessment year:

• Quarterly return filing acknowledgments (Form 27A or FVU)
• TDS challan copies ( CIN references)
• Form 16, 16A, 16B, 16C issued to deductees
• Bank statements showing TDS deposit against each CIN
• Contract agreements and invoices for payments where TDS was deducted
• Correspondence with deductees regarding PAN collection

FAQ

Q1: Is Form 24Q only for companies, or do LLPs and firms also file it?

Form 24Q is for salary payments only. Any employer — company, LLP, firm, trust, or individual — paying salary must file Form 24Q for that quarter. LLPs and firms paying salary to employees use the same form as companies.

Q2: Can I file a TDS return without a Digital Signature Certificate?

Yes. Individuals and firms (not companies or LLPs) can file TDS returns using an Electronic Verification Code (EVC) generated on the Income Tax e-filing portal. The EVC is sent to the mobile number and email registered against your PAN.

Q3: What happens if the challan CIN is wrong in the return?

The tax deposit will not be matched to the correct deductee in Form 26AS. The deductor must file a correction return with the correct CIN as soon as possible. The deductee cannot claim the TDS credit until the correction is processed.

Q4: Can I claim TDS credit if my employer filed the return but I do not see it in Form 26AS?

Form 26AS should reflect TDS deducted by your employer once the quarterly return is processed. If the credit is missing, ask your employer to verify the filing and, if necessary, file a correction. The TDS credit can be claimed at the time of ITR filing, subject to Form 16/16A matching.

Q5: What is the penalty for not filing a TDS return on time?

Under Section 234E, a late filing fee of ₹200 per day applies for each day the return is delayed, up to a maximum of the amount of tax deducted. For nil-tax returns, the maximum fee is ₹1,000 per quarter. Additionally, the department may impose a penalty under Section 272A.

Q6: How do I know if I need to file Form 27Q (non-resident payments)?

Form 27Q is required when you make payments to a non-resident — including foreign companies, NRIs, or foreign firms — such as royalties, fees for technical services, interest, dividends, or commission. If you have made no payments to non-residents during the quarter, you do not file Form 27Q.

Q7: Can I file one consolidated TDS return for multiple branches?

No. Each TDS deductor (each PAN) must file a separate return. If you have multiple branches under the same PAN, you must consolidate all deductee data into one return for that PAN.

Q8: What is the difference between TDS rate and TCS rate?

TDS (Tax Deducted at Source) is deducted by the payer before making the payment to the recipient — the recipient receives the net amount. TCS (Tax Collected at Source) is collected by the seller from the buyer at the time of sale — the buyer pays the gross amount including tax. Both are remitted to the government using different challan types but filed through the same quarterly return process (Form 27EQ for TCS).

Q9: Is a NIL TDS return mandatory?

For most TDS deductors, yes — if no TDS was deducted during the quarter, filing a NIL return confirms nil liability. Not filing a NIL return when required may result in a notice from the Income Tax Department asking why no return was filed.

Q10: How does TDS filing interact with GST compliance?

TDS and GST are separate compliance requirements under different laws. However, the GST portal also captures TDS data from GSTR-7 returns for GST input tax credit purposes. Ensure your TDS deposits and filings are consistent with what you report in GST returns to avoid mismatches.

Related Services

• TDS Return Filing — FinTax24’s quarterly TDS return filing service for businesses across Gujarat
• TDS Return Form 24Q — Salary TDS filing for employers
• TDS Return Form 26Q — Non-salary domestic payments TDS
• TDS Return Form 27Q — Non-resident payments TDS
• TCS Return Form 27EQ — TCS collection and filing
• TDS Notice Reply — Respond to TDS notices and corrections
• TDS Correction Statement — File TDS return corrections on TRACES
• TDS Credit: Form 26AS and AIS — Verify and claim TDS credit in your ITR
• TDS on Salary: How Your Employer Calculates It — Understand the salary TDS deduction process

Sources and References

• [Section 192, Income Tax Act 1961](https://www.incometax.gov.in/iec/f portals/#at) — Salary TDS
• [Section 194C, Income Tax Act 1961](https://www.incometax.gov.in/iec/f portals/#at) — Contract payments
• [Section 194I, Income Tax Act 1961](https://www.incometax.gov.in/iec/f portals/#at) — Rent
• [Section 194J, Income Tax Act 1961](https://www.incometax.gov.in/iec/f portals/#at) — Professional fees
• [Section 206C, Income Tax Act 1961](https://www.incometax.gov.in/iec/f portals/#at) — TCS collection
• [Section 234E, Income Tax Act 1961](https://www.incometax.gov.in/iec/f portals/#at) — Late filing fee
• [Rule 31A, Income Tax Rules 1962](https://www.incometax.gov.in/iec/f portals/#at) — TDS return forms and filing
• TRACES Portal — TDS return filing, RPU download, Form 16A generation
• Income Tax e-filing Portal

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This article was prepared by the FinTax24 editorial team and reviewed for accuracy against the Income Tax Act and Rules as applicable for FY 2025-26 and AY 2026-27. Tax law is subject to change based on subsequent CBDT notifications and circulars. Consider professional advice before acting on any TDS filing decision.

Author: Rahul Dabhi is Chief Executive Officer at FinTax24, where he leads delivery and quality assurance for compliance services including TDS filings, GST, and income tax. He can be reached at info@fintax24.in.