Tax Deducted at Source is one of the easiest areas to get wrong and one of the most penalised when you do. The rules are mechanical: deduct at the right rate, deposit by the right date, file the right return, and issue the right certificate.
When to deduct
TDS applies to specific payments at specific rates under specific sections — salary (192B), professional fees (194J), contractor payments (194C), rent (194I), commission (194H) and others. The threshold, rate and section vary by payment type.
When to deposit
TDS deducted in a month must be deposited by the 7th of the following month. For March deductions, the due date is 30th April. Late deposit attracts interest at 1% per month under Section 201.
Return filing
Quarterly TDS returns are due by 31st July, 31st October, 31st January and 31st May. Form 24Q covers salary, 26Q covers non-salary, and 27Q covers payments to non-residents. Late filing attracts a fee of Rs. 200 per day under Section 234E, capped at the TDS amount.
Form 16 and 16A
Form 16 is issued annually to employees; Form 16A is issued quarterly to other deductees. These certificates must be issued within the prescribed dates, or a penalty of Rs. 100 per day applies.
TDS compliance is about consistency. Build a calendar, deduct at the right rate, deposit on time, file quarterly, and issue certificates. The cost of a default far exceeds the cost of getting it right.
