TDS Compliance
Accurate deduction, timely deposit, and quarterly return filing for tax deducted at source — covering salaries, contractor payments, professional fees, rent, and other specified payments.
What This Service Covers
Chapter XVII-B of the Income-tax Act, 1961, requires persons making specified payments — including salaries, contractor payments, professional fees, rent, and interest above prescribed thresholds — to deduct tax at source before crediting or making payment to the recipient. Failure to deduct, or deduction at incorrect rates, can result in disallowance of expenses under Section 40(a)(ia), interest liability under Sections 201(1A) and 206C(7), and penalty proceedings. Tax Collected at Source (TCS) obligations under Chapter XVII-BB apply similarly to specified sellers and e-commerce operators.
Shivbhavan & Associates assists businesses and individuals with TDS applicability assessment, deduction at the correct rate, timely deposit, and quarterly return filing. Each engagement begins with a review of the specific payments made during the period, followed by computation of the applicable TDS rate under the relevant section, deposit of the deducted amount within the prescribed timeline, and preparation of the quarterly TDS return.
Governs deduction of tax at source on specified payments made by employers and businesses.
A Legal Obligation, Not Just Good Practice
Deducting and depositing TDS correctly is a statutory obligation under Chapter XVII-B of the Income-tax Act, 1961, for any person making specified payments above the prescribed threshold. Non-compliance can result in disallowance of the related expense under Section 40(a)(ia), interest under Section 201(1A) for late deposit, and penalty proceedings for failure to deduct or deposit tax.
This information is provided for general awareness. Whether a specific TDS obligation applies in your case depends on your individual circumstances and should be confirmed directly with the firm.
Who This Typically Applies To
- Employers deducting TDS on salary payments
- Businesses making payments to contractors and professionals above prescribed thresholds
- Persons paying rent above the threshold specified under Section 194-I
- E-commerce operators required to deduct TCS on specified transactions
- Buyers of property required to deduct TDS under Section 194-IA
- Businesses making payments to non-residents under Section 195
Common Filing Scenarios
Multiple Employees, Multiple Rates
Employers must compute TDS on salary individually for each employee based on their estimated annual income, applicable tax regime, and declared investments, requiring periodic reassessment through the year.
Payments to Contractors & Professionals
Payments to contractors under Section 194C and professionals under Section 194J attract TDS at different rates, and correctly classifying a payment is essential to applying the right provision.
TDS on Property Transactions
Buyers of immovable property valued above the prescribed threshold are required to deduct TDS under Section 194-IA and deposit it using a specific challan-cum-statement, a compliance step often overlooked in property transactions.
Payments to Non-Residents
Payments to non-residents attract TDS under Section 195, with the applicable rate depending on the nature of payment and any relief available under a Double Taxation Avoidance Agreement.
What's Included, By Entity Type
TDS on Salary
Computation of TDS on salary payments based on the employee's estimated annual income, applicable deductions, and choice between the old and new tax regimes under Section 115BAC.
- Annual salary projected and TDS computed proportionately
- Employee declarations and investment proofs reviewed
- Regime choice (old vs. new) factored into computation
- Form 16 prepared and issued at year end
TDS on Contractor & Professional Payments
Deduction of TDS on payments to contractors under Section 194C and to professionals and technical service providers under Section 194J, at the rates applicable to each category.
- Payment nature classified correctly under the applicable section
- Threshold limits checked before applying deduction
- TDS deposited within the prescribed timeline
- Quarterly return filed reflecting each deductee
TDS on Rent
Deduction of TDS on rent payments for land, building, plant, or machinery above the threshold prescribed under Section 194-I, including the specific provisions applicable to individuals and HUFs under Section 194-IB.
- Rent payments reviewed against applicable thresholds
- Correct rate applied based on the nature of the asset
- Deposit and return filing coordinated within due dates
- Certificate issued to the landlord where required
TDS on Property Transactions
Deduction of TDS on payment for transfer of immovable property (other than agricultural land) above the prescribed threshold, using the specific challan-cum-statement in Form 26QB.
- Applicability confirmed based on transaction value
- Form 26QB prepared and filed within the prescribed period
- TDS certificate (Form 16B) generated for the seller
- Compliance coordinated alongside the registration process
TDS on Payments to Non-Residents
Deduction of TDS on payments to non-residents, including assessment of applicable rates under the Income-tax Act and available relief under Double Taxation Avoidance Agreements.
- Nature of payment and recipient's residency status reviewed
- Applicable DTAA relief assessed where relevant
- Form 15CA/15CB coordinated where required
- TDS deposited and reported in the quarterly return
TDS Return Filing & Correction
Preparation and filing of quarterly TDS returns, along with correction statements where discrepancies are identified in PAN details, challan matching, or deducted amounts.
- Quarterly returns compiled across all deductees
- Challan details reconciled against deposited tax
- Correction statements filed where errors are identified
- Defaults raised by TRACES reviewed and resolved
Computation of TDS on salary payments based on the employee's estimated annual income, applicable deductions, and choice between the old and new tax regimes under Section 115BAC.
- Annual salary projected and TDS computed proportionately
- Form 16 prepared and issued at year end
Deduction of TDS on payments to contractors under Section 194C and to professionals and technical service providers under Section 194J, at the rates applicable to each category.
- Payment nature classified correctly under the applicable section
- TDS deposited within the prescribed timeline
Deduction of TDS on rent payments for land, building, plant, or machinery above the threshold prescribed under Section 194-I, including the specific provisions applicable to individuals and HUFs under Section 194-IB.
- Rent payments reviewed against applicable thresholds
- Certificate issued to the landlord where required
Deduction of TDS on payment for transfer of immovable property (other than agricultural land) above the prescribed threshold, using the specific challan-cum-statement in Form 26QB.
- Applicability confirmed based on transaction value
- TDS certificate (Form 16B) generated for the seller
Deduction of TDS on payments to non-residents, including assessment of applicable rates under the Income-tax Act and available relief under Double Taxation Avoidance Agreements.
- Applicable DTAA relief assessed where relevant
- Form 15CA/15CB coordinated where required
Preparation and filing of quarterly TDS returns, along with correction statements where discrepancies are identified in PAN details, challan matching, or deducted amounts.
- Quarterly returns compiled across all deductees
- Defaults raised by TRACES reviewed and resolved
The Filing Process
Submit Enquiry
Share your requirement through the website or by phone. The firm reviews it and responds during office hours with next steps.
Document Collection
Relevant documents are collected based on your entity type and income sources, following the checklist confirmed for your specific situation.
Computation & Review
Income is computed under every applicable head, with eligible deductions and exemptions applied before the return is finalised for your review.
Filing & Confirmation
The return is filed within the statutory due date, and the filing acknowledgment along with the computation summary is shared with you.
Verified. Processed. Resolved.
Every filed return moves through e-verification, departmental processing, and — where applicable — refund or query resolution.
After Deduction & Deposit
Once TDS is deducted, it must be deposited with the government within the timeline prescribed under the Act — generally by the 7th of the following month, with a modified timeline for March deductions. Following deposit, the amount must be reported in the quarterly TDS return, which in turn reflects as a credit in the deductee's Form 26AS and Annual Information Statement.
Where discrepancies are noted between deposited challans and reported returns, the TRACES portal typically raises a default, which requires a correction statement to resolve. Deductees rely on accurate and timely TDS reporting to correctly claim credit when filing their own income tax returns.
Documents You'll Need
Document requirements vary depending on the nature of the payment and the type of deductor, but the checklist below covers what's typically required. Click each item as you gather it — the tracker above updates as you go. This is a preparation aid only; submitting an enquiry will confirm the exact list applicable to your specific situation before any engagement begins.
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Frequently Asked Questions
What is the due date for depositing TDS?
TDS deducted during a month is generally required to be deposited by the 7th of the following month, except for March deductions, which carry a modified timeline under the Act.
What is the due date for filing a quarterly TDS return?
Quarterly TDS returns are generally due within one month of the end of each quarter, with the exact date notified for each financial year.
What happens if TDS is deducted but not deposited on time?
Late deposit attracts interest under Section 201(1A), calculated from the date of deduction to the date of actual deposit, in addition to the tax amount itself.
Can a deductee claim credit for TDS that hasn't been deposited by the deductor?
Credit is generally reflected in Form 26AS only once the deductor deposits the tax and files the corresponding TDS return; delays on the deductor's part can affect the timing of the deductee's credit.
What is a TDS default and how does it arise?
A default typically arises from mismatches such as an incorrect PAN, unmatched challan details, or short deduction, and is flagged through the TRACES portal, requiring correction on the deductor's part.
Is TDS applicable on payments to individuals as well as companies?
Yes, TDS provisions generally apply regardless of whether the payee is an individual, firm, or company, subject to the specific thresholds and rates prescribed for each type of payment.
What is the difference between TDS and TCS?
TDS is deducted by the payer at the time of making a payment, while TCS is collected by the seller at the time of receiving payment for specified goods or services, both under the same broader framework of tax collection at the point of transaction.
Can TDS be adjusted against advance tax liability?
Yes, TDS deducted during the year is available as a credit against the total tax liability computed at the time of filing the income tax return, including any advance tax obligation.
Have a Query About TDS Compliance?
Submit an enquiry and the firm will respond during office hours. Engaging the firm for this service begins with a formal engagement following your enquiry.