Tax Deducted at Source (TDS) is a key component of India’s income tax framework, designed to collect tax revenue at the time income is earned. For Financial Year 2025-26 (Assessment Year 2026-27), individuals and entities responsible for deducting TDS must follow strict deadlines for depositing payments and filing returns to prevent penalties and interest charges. This article outlines the due dates for TDS payment and return filing, highlights the consequences of missing deadlines, and explains the significance of Form 26AS in the process.
Tax Deducted at Source (TDS) requires the payer (deductor) to withhold a specified percentage of tax when making certain payments, including salaries, rent, professional fees, interest, and commissions. The deducted tax must then be remitted to the Central Government within the stipulated deadlines.
TDS Payment Due Dates for FY 2025-26
The general rule for depositing TDS is by the 7th of the subsequent month in which the tax was deducted. However, there’s a crucial exception for the month of March.
| Quarter Ending | Period Covered | TDS Return Due Date |
| 30-Jun-25 | April 1, 2025 to June 30, 2025 | 31-Jul-25 |
| 30-Sep-25 | July 1, 2025 to September 30, 2025 | 31-Oct-25 |
| 31-Dec-25 | October 1, 2025 to December 31, 2025 | 31-Jan-26 |
| 31-Mar-26 | January 1, 2026 to March 31, 2026 | 31-May-26 |
Note on TCS Return Due Dates
Tax Collected at Source (TCS) returns follow a quarterly filing schedule, with deadlines typically falling 15 days before the corresponding TDS return due dates for each quarter. Ensure timely compliance to avoid penalties.
Key Points
- Form 24Q, 26Q, 27Q & 27EQ must be filed quarterly.
- Form 26QB (TDS on property purchase) must be filed within 30 days from the end of the month in which tax was deducted.
- Late Filing Penalties:
- ₹200/day (until the return is filed, max up to TDS amount).
- Additional penalties under Section 271H (min ₹10,000, max ₹1,00,000) if filed after the due date.
Annual TDS Compliance (Form 16/16A)
- Form 16 (for employees): Due by 15th June 2026.
- Form 16A (for non-employees): Generated after TDS return filing.
Consequences of Non-Compliance: Penalties and Interest
Timely deduction, deposit, and filing of TDS are crucial. Failure to comply can result in severe financial and legal consequences:
Late Filing Fee (Section 234E)
- A daily fee of ₹200 is imposed for delays in submitting the TDS/TCS return, calculated from the due date until the actual filing date.
- The maximum late fee cannot exceed the total TDS/TCS amount for that quarter.
- Example: If TDS of ₹10,000 for Q1 (due July 31, 2025) is filed on September 30, 2025 (61 days late), the fee would be ₹12,200. However, since it’s capped at ₹10,000, only ₹10,000 is payable.
Penalty for Non/Incorrect Filing (Section 271H)
A penalty of ₹10,000 to ₹1,00,000 may apply for:
- Missing the TDS/TCS filing deadline.
- Submitting incorrect details (e.g., wrong PAN, challan info).
Waiver Conditions: No penalty if:
- TDS/TCS is deposited with the government.
- The return is filed within one year of the due date.
- Late fees and interest (if any) are paid.
Interest on Late Deduction/Payment (Section 201(1A))
- Late Deduction: 1% interest per month (or part thereof) from the date TDS should have been deducted until actual deduction.
- Late Payment: 1.5% interest per month (or part thereof) from the deduction date until the deposit date.
- Note: Even a one-day delay counts as a full month. For instance, if TDS is due on July 7 but paid on July 8, interest is charged for two months (July and August).
Expenditure Disallowance (Section 40(a)(ia))
- For payments to residents: 30% of the expense is disallowed if TDS is not deducted/deposited by the return due date.
- For payments to non-residents: The entire expense is disallowed if TDS is not deducted.
Legal Prosecution (Section 276B)
Failure to deposit deducted TDS may lead to:
- Rigorous imprisonment (3 months to 7 years).
- A fine.
Ensuring TDS compliance—through proper deduction, timely deposit, and accurate return filing—is critical for both deductors and deductees. Being aware of the due dates for FY 2025-26 and the serious repercussions of non-compliance is crucial. Additionally, regularly reconciling TDS details with Form 26AS helps maintain accurate tax reporting, minimising the risk of penalties and legal issues.
FAQs
Form 24Q is a quarterly TDS statement that needs to be filed by an employer for the tax deducted on salary payments made to employees. It includes details such as the PAN of the employee, amount paid, and TDS deducted and deposited.
Form 27Q is a quarterly TDS return filed for tax deducted on payments other than salary made to non-resident individuals (not being a company) and foreign companies. This includes payments like interest, dividends, technical services, and any other sum chargeable under the Income Tax Act.
Form 26Q is a quarterly TDS statement used for reporting TDS deducted on all payments other than salaries made to Indian residents. This includes TDS on professional fees, interest payments, rent, commission, and contract payments.
24Q and 26Q TDS must be submitted quarterly. The due date is as follows: April to June – 31st July, July to September – 31st October, October to December – 31st January and January to March – 31st May.
If you have deducted TDS but not deposited timely, interest @ 1.5% per month will be levied from the date of deduction to the date of deposit.
