TDS Explained: Rates, Returns, Due Dates & How to File
Tax Deducted at Source (TDS) trips up many businesses. Understand what TDS is, common rates, return types and due dates — and how to stay compliant.
Tax Deducted at Source (TDS) is one of the most common compliance areas for businesses — and one of the easiest to get wrong. Here's a clear primer.
What is TDS?
TDS is a mechanism where tax is deducted at the point of payment — on salaries, rent, professional fees, interest and more — and deposited with the government on the recipient's behalf. The deductor needs a TAN (Tax Deduction Account Number).
Common TDS rates
Rates depend on the nature of payment. A few common examples:
- Salaries — as per the employee's slab rate.
- Professional/technical fees (194J) — typically 10%.
- Rent (194I) — 10% on land/building.
- Contractor payments (194C) — 1%–2%.
Always confirm the current rate and threshold for your specific payment type.
TDS return types
| Form | For |
|---|---|
| 24Q | TDS on salaries |
| 26Q | TDS on non-salary payments (residents) |
| 27Q | TDS on payments to non-residents |
| 27EQ | TCS returns |
Due dates
- Deposit TDS by the 7th of the following month (special rule for March).
- File TDS returns quarterly, typically by the end of the month following each quarter.
- Issue Form 16/16A to deductees after filing.
Penalties for non-compliance
- Late deposit: interest of 1%–1.5% per month.
- Late filing: ₹200 per day under Section 234E.
- Non-filing: additional penalties may apply.
Stay ahead: TDS deadlines are monthly and quarterly — a missed date is easy to avoid with a simple compliance calendar.
We manage TDS deduction, deposit, returns and Form 16 issuance so your business stays fully compliant, every quarter.
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