TDS return filing: 24Q, 26Q, 27Q

Every business entity in India that deducts tax at source must file quarterly TDS returns detailing the payments made and the tax withheld. The primary forms are Form 24Q (for salaries), Form 26Q (for resident non-salary payments), and Form 27Q (for payments to non-residents). Filing must be done on or before the statutory due dates to avoid mandatory daily late fees under Section 234E and substantial penalties under Section 271H.

Overview of TDS Return Forms

Each type of transaction requires a distinct return form to ensure structured reporting to the Income Tax Department:

• Form 24Q (Salary TDS): Used to report TDS on salary payments under Section 192. It consists of Annexure-I (filed in all four quarters detailing deductee PANs and tax amounts) and Annexure-II (filed only in Q4, detailing the employee's gross salary, allowances, deductions under Chapter VI-A, and final tax computation).
• Form 26Q (Resident Non-Salary TDS): Used for all resident payments other than salary (e.g., payments to contractors under Section 194C, rent under 194I, professional fees under 194J, commission under 194H, and interest under 194A).
• Form 27Q (Non-Resident TDS): Used for all payments made to non-resident individuals, foreign companies, or LLPs where tax is deducted under Section 195 or other non-resident provisions.
• Form 27EQ (TCS Return): Used to report Tax Collected at Source (TCS) under Section 206C.

Statutory Filing Schedule and Deadlines

TDS returns are due on a quarterly basis. The deadlines are strictly enforced by the portal:

Interest, Late Fees, and Penalties for Delay

Delay in depositing TDS or filing returns triggers severe financial consequences:

• Interest on Delay in Deduction: 1% per month or part of a month from the date on which tax was deductible to the date of actual deduction.
• Interest on Delay in Deposit: 1.5% per month or part of a month from the date of deduction to the date of deposit.
• Late Filing Fee (Section 234E): A mandatory fee of **Rs. 200 per day** of delay until the return is filed. The total late fee cannot exceed the amount of tax deductible/collectible in the return. This fee is calculated automatically by the portal and cannot be waived.
• Penalty (Section 271H): The Assessing Officer can levy a penalty ranging from **Rs. 10,000 to Rs. 1,00,000** for failure to file the return within one year of the due date, or for furnishing incorrect information.

Form 26AS Matching and Reconciliation

Before submitting any quarterly return, the deductor must reconcile the entries against Form 26AS/AIS of the payees. The department portal uses automatic systems to verify that the PAN matches the name in the database. If there is a mismatch, the return will still upload but will flag a 'PAN Mismatch' default, resulting in the payee not receiving credit for the tax. This causes significant friction during ITR processing, making pre-filing validation essential for corporate compliance.

Worked Example: Late Deposit and Late Filing Calculation

Let us calculate the financial impact of a compliance delay. **ArtisanIndia Retail** has a professional fee invoice where they deduct TDS of **Rs. 50,000** on **May 15, 2026** (Quarter 1).
- Due Date of Deposit: June 7, 2026.
- Actual Deposit Date: August 12, 2026 (Delay of 4 months or part-months: May, June, July, August).
- TDS Return Due Date (Form 26Q): July 31, 2026.
- Actual Return Filing Date: August 25, 2026 (Delay of 25 days).

Interest Calculation (Section 201(1A)):
Tax was deducted on May 15 and deposited on August 12. Interest is charged at 1.5% per month for 4 months (part of a month counts as a full month) = Rs. 50,000 * 1.5% * 4 = **Rs. 3,000**.

Late Filing Fee Calculation (Section 234E):
Return due on July 31 and filed on August 25. Delay is 25 days. Late fee is 25 days * Rs. 200/day = **Rs. 5,000**. (This is capped at the TDS amount, which is Rs. 50,000, so Rs. 5,000 is fully payable).
The total compliance default cost is **Rs. 8,000** (Rs. 3,000 interest + Rs. 5,000 late fee), which must be paid via Challan 281 before filing the return. The corrected return is then filed with zero further default flags.