Tax deducted at source

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Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2012 In case of NBFC, TDS was deducted on the interest at the year end inspite of having the loan track giving bifurcation of monthly interest & principal.

Also the TDS was deposited vide a single challan.

Can this single challan be effected in the Q4 TDS return?

If not, what is the best remedy?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

24 September 2012 Yes.. If the interest is due yearly then TDS will be deducted on year to year basis.
The TDS will be reflected in q4 TDS return.

Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2012 However the TDS is due on monthly basis as we have the bifurcation on a monthly basis of the principal & interest...

What will be the course of action

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

24 September 2012 Do you book income on monthly basis?? Also, if it is paid by the party on monthly basis or if it is compounded on monthly basis then only TDS will be deducted only monthly basis.

Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2012 If the loan is paid on a monthly basis(principal+interest) , should the interest not be booked on a monthly basis

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

24 September 2012 If the interest is paid monthly then TDs is to be deducted on monthly basis.

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2012 Coming back to the first question posed what is the course of action if the TDS deducted is deposited vide a single challan at the end of the year.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

26 July 2025 Great question! Here’s how to handle TDS deducted at year-end but deposited via a **single challan** instead of monthly:

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### Situation:

* TDS on interest should ideally be deducted and deposited **monthly** (if interest is accrued/paid monthly).
* But here, TDS was deducted once at year-end and deposited in a **single challan**.
* The question: **Can this single challan be reflected in the Q4 TDS return?**

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### Key Points & Best Practice:

1. **TDS Deduction Timing Rule:**

* TDS should be deducted **at the time of payment or credit**, whichever is earlier.
* For interest paid monthly, TDS must be deducted monthly.

2. **Single Challan Deposit at Year-End:**

* The law allows deposit of TDS in a lump sum, but it should ideally match the **periods of deduction**.
* Depositing TDS for the whole year at once is not compliant when TDS is deductible monthly.

3. **Filing TDS Returns:**

* The TDS return for each quarter must report TDS deducted in that quarter.
* If you deducted all TDS at year-end and deposited at once, the entire amount should be reported in the **4th quarter TDS return only**.

4. **Implications:**

* Reporting the entire TDS in Q4 return is acceptable **only if TDS was actually deducted in Q4**.
* If TDS was deducted earlier but not deposited timely, it may lead to interest or penalty for late deposit under Section 201/271H.

5. **Best Remedy:**

* File the TDS return for Q4 with full details of all deductees and amount of TDS deducted and deposited.
* Maintain proper records explaining the reason for lump-sum deduction.
* Inform the deductees and provide Form 16A accordingly.
* If deductees face mismatch or credit issues, assist them in getting TDS credit.
* For future, follow monthly deduction and deposit to avoid issues.

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### Summary:

* Yes, you can report the entire TDS in Q4 return **if TDS deduction actually happened in Q4**.
* If monthly deduction was expected, lump sum deduction may invite scrutiny.
* Correct the process going forward to deduct and deposit TDS monthly if interest is accrued or paid monthly.

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