Article explains What is a Nil TDS Return, What is the position for an assessee who has not made any TDS payment at all in a quarter, What to do If for a quarter TDS return / statement are not filed and then the assessee receives a letter / notice from NSDL/ Income Tax Department for non-filing of e-TDS return/statement, When Assessee is required to file NIL TDS return, What about Challan and deduction Link for Zero Deduction and How to Create Nil TDS Challan?

Many Assessee has this confusion between Zero deduction and Nil return. Therefore, they make mistakes in compliance. Hence today I am discussing this very important topic which will cover nil E-TDS Return, nil Challan and when to file nil return?

What is a Nil TDS Return?

Return, which comprises of Only Zero/NIL Deductions in deduction details and no challan details (Apart from a NIL Challan Indication) is called NIL Return.

Note that the NIL return should have a value Greater than Zero as Total Amount Paid/Credited. Zero-Amount of Payment is not accepted by NSDL. It is compulsory for a deductor to file NIL return if he has done some payments and not deducted/Collected any TDS/TCS on the amount of payment. No Deduction Details and No Challan details is not a NIL returns.

What is the position for an assessee who has not made any TDS payment at all in a quarter?

If there are no payments done under that particular form, it is not compulsory for the deductor to file eTDS returns for that form, unless intimated by IT Department/NSDL.  The obligation to file quarterly TDS Return arises only if tax has been deducted at source. Legally there is no need to file Quarterly TDS Return/ Statement where no tax has been deducted at source. NSDL is also of the view that it is not at all compulsory to file NIL return, if deductor has not deducted any tax at source or if there is no transaction at all for a particular period.

What to do If for a quarter TDS return / statement are not filed and then the assessee receives a letter / notice from NSDL/ Income Tax Department for non-filing of e-TDS return/statement?

Letter for non-filing of e-TDS return/statement normally clearly mentions at the bottom that if the assesee has already furnished or is not required to furnish TDS return!statement then the letter is to be ignored. The assesee who has not filed the return because of NIL transactions replies to this letter stating that as there is no transaction during the quarter the return/statement has not been filed.  The other option left before the assessee is to file a NIL return.

When Assessee is required to file NIL TDS return?

When there is a payment liable to TDS but, on which no tax has been deducted at source as deductee has produced a certificate of NIL tds rate from assessing officer.

What about Challan and deduction Link for Zero Deduction?

Zero Deduction should also be linked to a NIL challan in the Output file.

How to Create Nil TDS Challan?

In TDS return we have to fill details of Challan as per Table given below to create a Nil Challan.

 
Field Value
Value
Serial No. (Column no. 401)
1
Section Code(Section Relevant to the Nature of Payment)
From Drop Down Menu
Amount Fields i.e. TDS,Surcharge,Education Cess,Interest and Others(Column no. 403 to 407)
0.00 (Zero)
Cheque / DD number (Column no 409)
Blank
Date on which tax deposited (Column no. 411) last day of respective quarter e.g. for quarter 4
31/03/2006
Transfer voucher / Challan serial No. (Column no. 412)
Blank
Whether TDS Deposited by Book Entry ?(Yes)/(No) (Column no.413)
Blank
Interest Rs
0.00 (Zero)
Others Rs
0.00 (Zero)

Republished with Amendments

More Under Income Tax

27 Comments

    1. RUPALI says:

      Hello sir,
      if salaries are paid , but tds is not deducted , then how to file tds return as i want to show the income in 26AS. If i file nil return, salaries paid will not be displayed in 26 as. pls reply

      1. GOPAL D says:

        if salaries are paid , but tds is not deducted , then how to file tds return as i want to show the income in 26AS. If i file nil return, salaries paid will not be displayed in 26 as. pls reply

  1. AK Bhargava says:

    What is the position for an assessee who has not made any payment at all in a quarter

    Thanks for esy and elaborate reply.
    AK Bhargava- Query maker

  2. Srinivas GVA says:

    Sir, Where can I get an Official notification that filing of NIL returns (26Q for TDS made)is not necessary? I tried NSDL/CDBT and other similar files. This is the only site where I could get atleast some guidance. Please guide me.

  3. sravanthi says:

    HOW CAN I CREATE A NIL DEDUCTEE RETURN? AT THE TIME OF PREPARATION; NAME, PAN MUST BE PROVIDED. BUT IN CASE OF NIL RETURN, WHERE NO DEDUCTION MADE HOW CAN I USE ANY PAN? AFTER THAT AN OPTION SHOWN ON SCREEN FOR REMARK A, B, C, Y, T, Z.

  4. JASWANT SINGH says:

    IF in cace TDS 1st Quater is Nil There no value No Deduction no Payments this case Nil return file or not Nil Return is compelsery filing?

  5. SUMAN says:

    HOW CAN I CREATE A NIL DEDUCTEE RETURN? AT THE TIME OF PREPARATION; NAME, PAN MUST BE PROVIDED. BUT IN CASE OF NIL RETURN, WHERE NO DEDUCTION MADE HOW CAN I USE ANY PAN? AFTER THAT AN OPTION SHOWN ON SCREEN FOR REMARK A, B, C, Y, T, Z.

  6. ISLAM says:

    As per your above NIL return format i am unable to create file and validate it please help me properly in this regard,
    thank you.

  7. SANJAY GUPTA says:

    i file nil return 0f salary the error is PAN no should be individual i use PAN in nil RETURN AAAAA0000A after that i use pan of deductor as pan of the employee the return RPU (return Prepare Utility ) Accepted it . now i ask you can i use PAN of DEDUCTOR as a emplyoee because there is no tDS deducted of employee

  8. saravanan says:

    Sir, Asper your format create a nil return but annex also create after generating
    output file shows the below error. How do rectify it. pl help me.

    “T-FV-4257 Date on which tax deducted should be null If Total deduction is Zero and no value specified in ‘No deduction/lower deduction’ or value specified is A”

  9. Santosh says:

    If my salary is below Tax Limit and i am salary employee and want to file a return for 2 year it is possible to file a return what is a requirement to file a return

  10. Y.K.MITTAL says:

    A newly established Partnership Firm has to pay Interest on Loan on 31.03.2012 to only 1 person who has given Form 15H/15G. Whether the Firm has to obtain TAN and file NIL return (26Q)? 

  11. sunil K. jain says:

    iF COMPANY has taken TAN number and not deducted TDS and not liable for deduct to TDS whole of the year Whether TDS Return filing compulsory for the year?

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