TDS Return Filing: Overview (FY 2026-27)
TDS return filing means submitting a quarterly statement of the tax you deducted at source,
along with the challans that prove you deposited it, using the form that matches the payment:
salary, resident non-salary, non-resident, or tax collected at source. The Q2 return for July to
September 2026 is due on 31 October 2026.
Late filing costs ₹200 a day, up to the amount of tax in the return, and late deposit carries
interest of 1% or 1.5% a month.
Forms renumbered: From FY 2026-27, the Income-tax Act, 2025 has renumbered the
forms. 24Q is now Form 138, 26Q is now Form 140, 27Q is now
Form 144 and 27EQ is now Form 143.
Next Return Due
31 Oct 2026 (Q2)
Handled By
Tax Compliance Expert
Key Takeaways
Four quarterly due dates apply for FY 2026-27: 31 July 2026, 31 October 2026, 31
January 2027 and 31 May 2027.
Monthly TDS deposit is due on the 7th of the next month, except March, which is due
on 30 April.
Forms were renumbered from 1 April 2026. Filing on an old form number for FY
2026-27 is reported to cause TRACES rejection.
The late fee is ₹200 a day, capped at the TDS amount, and must be paid before the
return is accepted.
Interest runs at 1% a month for late deduction and 1.5% a month for late deposit,
and a part month counts as a full month.
A penalty of ₹10,000 to ₹1 lakh can follow if you file more than a year late or
file wrong particulars.
Who Must File a TDS Return
Anyone who deducts tax at source, or collects it, must hold a TAN and file quarterly statements.
In practice that covers employers paying salary, businesses paying contractors, professionals,
rent and interest, and anyone paying a non-resident. It does not matter whether you are a
company, firm, individual or HUF, once the TDS obligation applies.
A quarter with deductions needs a return, and a quarter without deductions generally does not,
but check with your adviser if you deducted nothing.
TDS Return Due Dates
Deposit dates are different from filing dates.
| Quarter |
Period |
Due Date (FY 2026-27) |
| Q1 |
April to June 2026 |
31 July 2026 |
| Q2 |
July to September 2026 |
31 October 2026 |
| Q3 |
October to December 2026 |
31 January 2027 |
| Q4 |
January to March 2027 |
31 May 2027 |
Monthly deposit
Pay the TDS by the 7th of the following month.
March deductions
The deposit is due on 30 April.
Government deductors
They have different dates, so check if you are one.
Q1 already passed: The Q1 return due on 31 July 2026 has already passed. If
you missed it, file it now, and expect the late fee. The Q2 return is next, and the September
deposit was due on 7 October 2026, so do not let the return outrun the payment.
How to File a TDS Return Online, Step by Step
1
Gather the Data
Collect deduction records for the quarter: deductee name, PAN, amount paid, tax deducted
and the date of deduction.
2
Reconcile Challans
Match each deposit against your bank record and the challan details (BSR code, date and
serial number).
3
Prepare the Statement
Use your accounting or payroll software, or a return preparation utility, to build the
file in the right form: 138, 140, 144 or 143.
4
Validate It
Run the file through the File Validation Utility. A clean validation produces an .fvu
file and a Form 27A control sheet.
5
Pay Any Late Fee First
If you are past the due date, deposit the late fee before you file. The statement will
not be accepted without it.
6
Upload
File the validated statement through the e-filing channel your software or intermediary
uses, signing with DSC or EVC as required.
7
Save the Acknowledgement
Note the token number. It is your proof of filing.
8
Check Processing on TRACES
See the next section.
If you file in volume, such as payroll for a large team, build a monthly close checklist, so the
quarterly file is a summary of work already done.
TRACES TDS Return Process: Verify, Correct and Download
TRACES is the Income Tax Department's portal for reconciling TDS. Register on it with your TAN,
then:
1
Log In
Log in with your user ID, password and TAN.
2
Check the Statement Status
After your upload, look under statement or payment status for "processed", "accepted" or
"rejected". Processing usually takes a day or two.
3
View the Default Summary
It shows short deductions, short payments, interest on late deposit, late filing fees
and PAN errors.
4
Request a Justification Report
See how each default arose.
5
File a Correction Statement
Use it for wrong PANs, challan mismatches or amounts. A correction can attract an upload
fee.
6
Pay Shortfalls
If TRACES shows short payment or interest, pay it by challan and file a correction so
the default is cleared.
7
Download Certificates
Once a statement is processed, you can download the certificates for your deductees.
Mismatches here matter beyond your own books. A deductee claims credit through their Form 26AS,
so an error in your return can block a refund for an employee or vendor. Our page on
ITR Filing explains how that
credit shows up for them.
TDS Certificates: Form 16 and Form 16A (Form 130 and Form 131)
| Certificate |
For |
Under the Old Act |
New Form |
| Form 16 |
Employees (salary TDS) |
By 15 June after the financial year |
Form 130 |
| Form 16A |
Non-salary deductees |
Within 15 days of the due date for filing the quarterly statement
|
Form 131 |
For salary, Part A is generated from TRACES and Part B is prepared by the employer. Issue
certificates on time. A per-day penalty applies for each day of delay in issuing them under the
old Act's provisions, and the new Act continues a similar charge.
TDS Late Fees, Interest and Penalty
Late Fee: Section 234E (Now Section 427)
If you file late, the late fee is ₹200 for every day of delay, counted from the due date to the
date of filing. It cannot exceed the TDS amount in that return. It sits in Section 234E of the
old Act, and in Section 427 of the Income-tax Act, 2025 for FY 2026-27 statements.
Two practical points follow. First, the fee is charged per statement, so a late Form 138 and a
late Form 140 each carry their own. Second, you pay it before the return is accepted. The fee is
a flat cost of delay, so file late rather than not at all, but file as soon as the data is
ready.
Interest on Late TDS: Section 201(1A)
Interest is separate from the late fee.
| Default |
Rate |
Counted From |
Counted To |
| Tax not deducted, or deducted short |
1% per month |
Date the tax was deductible |
Date it was deducted |
| Tax deducted but not deposited |
1.5% per month |
Date of deduction |
Date of deposit |
Any part of a month counts as a full month. Notice the starting point for the second rate.
Interest on late deposit runs from the date you deducted the tax, not from the 7th of the next
month, which is why one extra day can cost a full month. The provision is in Section 201(1A) of
the old Act and carries across to the 2025 Act at the same rates.
Penalty for Late Filing: Section 271H
Under Section 271H of the old Act, the officer can levy a penalty of ₹10,000 to ₹1,00,000 where
you fail to file a statement within one year of the due date, or where the statement contains
incorrect particulars about the tax, the PAN or the challan. The compliance commentary on the
2025 Act reports this as Section 461.
The penalty does not
apply if you pay the TDS with interest and the late fee, and file the statement before the
one-year period ends. That is the practical reason to clear a missed return quickly.
A Worked Example
Suppose your Q2 FY 2026-27 salary return, with ₹1,20,000 of tax, is due on 31 October 2026 and
you file on 20 November 2026. You are 20 days late.
- Late fee: 20 days × ₹200 = ₹4,000, well below the ₹1,20,000 cap.
Now suppose ₹50,000 of tax was deducted on 10 September 2026 and deposited on 25 October 2026.
-
Interest at 1.5% a month: 10 September to 10 October is one month, and 10 to 25 October
is a part month, which counts as a second month. Two months × 1.5% × ₹50,000 =
₹1,500.
These are illustrations, so run your own dates.
Mistakes That Bring Notices
Filing on an old form number after 1 April 2026.
Wrong or missing PANs for deductees. A missing PAN also triggers higher TDS.
Challan details that do not match the bank's records.
Short deduction because the wrong section or rate was applied.
Paying the tax but never filing the return, or filing it without the late
fee.
Ignoring TRACES default notices. They do not disappear.
Corporate deductors also owe their yearly company filings, which our page on
ROC Annual Return Filing Online
explains.
Frequently Asked Questions
Got questions? Find clear answers from our tax compliance team:
It is the quarterly statement of tax deducted at source, with deposit details, filed
by the deductor.
31 July 2026, 31 October 2026, 31 January 2027 and 31 May 2027.
The 7th of the following month, and 30 April for March deductions.
Form 24Q for FY 2025-26 and earlier, and Form 138 from FY 2026-27.
Form 27Q earlier, and Form 144 from FY 2026-27.
₹200 per day, capped at the TDS amount in the return.
1.5% per month from the date of deduction to the date of deposit, and 1% per month
if tax was not deducted on time.
Yes. Any part of a month is treated as a full month.
₹10,000 to ₹1 lakh for filing more than a year late or filing incorrect particulars.
Yes, if you pay the TDS, interest and late fee and file within one year of the due
date.
Log in to TRACES with your TAN and look at the statement status.
File a correction statement through your return software and upload it. Corrections
can carry a fee.
The deductor, using certificates generated from TRACES.
Generally no, but confirm your position with an adviser.