Summary: Tax Deducted at Source (TDS) is an income tax mechanism where a payer deducts a percentage of tax from specific payments, such as salary, interest, or professional fees, before remitting the net amount to the payee. The deducted tax is then deposited with the government on the payee’s behalf. This system was implemented to ensure consistent government revenue, reduce tax evasion by tracking income at its origin, broaden the tax base, and simplify the tax collection process for both the government and taxpayers. Non-government deductors must generally deposit TDS by the 7th of the following month, with a few exceptions like certain property or virtual asset transactions, which have a 30-day window. Quarterly TDS returns are filed using specific forms like 24Q, 26Q, 27Q, 26QE, or 26QF, depending on the payment type and recipient, with due dates typically by the end of the month following the quarter. Non-compliance, including late deduction, deposit, or filing, can result in interest, late fees, penalties, and disallowance of expenses.
What is TDS?
Tax Deducted at Source (TDS) is a mechanism introduced by the Income Tax Department, wherein a certain percentage of tax is deducted by the payer (deductor) at the time of making specified payments like salary, interest, commission, rent, professional fees, etc., to the payee (deductee) and is remitted to the government on behalf of the payee.
Why was TDS Introduced?
The concept of TDS was introduced to:
1.Ensure regular inflow of revenue to the government.
2. Minimize tax evasion by tracking income at the time it is earned or paid.
3. Widen the tax base by collecting taxes at the point of source.
4. Ease the tax collection process and reduce the burden on the taxpayer at the end of the financial year.
TDS Payment Due Dates for FY 2025-26
| Month | Due Date for TDS Payment (Non-Government Deductor) |
| April 2025 | 7th May 2025 |
| May 2025 | 7th June 2025 |
| June 2025 | 7th July 2025 |
| July 2025 | 7th August 2025 |
| August 2025 | 7th September 2025 |
| September 2025 | 7th October 2025 |
| October 2025 | 7th November 2025 |
| November 2025 | 7th December 2025 |
| December 2025 | 7th January 2026 |
| January 2026 | 7th February 2026 |
| February 2026 | 7th March 2026 |
| March 2026 | 30th April 2026 (for deductions made by non-govt deductor) |
Note:
- For government deductor, TDS should be deposited on the same day if paid without challan and by 7th of next month if paid with challan.
- TDS under Section 194-IA, 194-IB, 194M and 194S (for non-specified persons) must be deposited within 30 days from the end of the month in which the deduction is made.
TDS Return Filing Due Dates for FY 2025-26
TDS Returns are to be filed quarterly using Form 24Q, 26Q, 27Q or 26QF depending on the nature of the payment and the recipient.
| Quarter | Period Covered | Due Date for Filing TDS Return |
| Q1 | Apr – Jun 2025 | 31st July 2025 |
| Q2 | Jul – Sep 2025 | 31st October 2025 |
| Q3 | Oct – Dec 2025 | 31st January 2026 |
| Q4 | Jan – Mar 2026 | 31st May 2026 |
TDS Return Forms: Purpose and Usage
| Form | Purpose | Applicable To |
| Form 24Q | TDS on Salary income (Section 192) | Employers |
| Form 26Q | TDS on all payments (except salary) to residents | Companies, Firms, Individuals, etc. |
| Form 27Q | TDS on payments made to Non-Residents | Any deductor making payments to non-residents |
| Form 26QE | TDS under Section 194S (crypto, other virtual assets) | Individual/HUF not in business (specified cases) |
| Form 26QF | TDS on specified virtual digital asset transactions | Non-specified persons |
Consequences of Non-Compliance
Failure to deduct, deposit, or file TDS returns on time may lead to:
- Interest under Section 201(1A) for late payment.
- Late filing fee under Section 234E (₹200/day).
- Penalty under Section 271H (ranging from ₹10,000 to ₹1,00,000).
- Disallowance of expense under Section 40(a)(ia) while computing income.
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