What is TDS?
Tax Deducted at Source (TDS) means the person making certain payments deducts tax before paying and deposits it with the government. The recipient gets credit for that tax in their own return.
Businesses commonly deduct TDS on salaries, payments to contractors, professional and technical fees, rent, commission and interest. The rate and threshold depend on the type of payment and the recipient.
Who has to deduct?
Employers deduct TDS on salaries. Businesses and professionals, especially those whose accounts are audited, must deduct TDS on specified payments above the applicable thresholds. You need a TAN (Tax Deduction Account Number) to deduct and deposit TDS.
When to deposit TDS
| Tax deducted in | Deposit by |
|---|---|
| April to February | 7th of the following month |
| March | 30 April |
Government deductors paying by book entry must deposit on the same day.
Quarterly TDS returns
| Quarter | Period | Due date |
|---|---|---|
| Q1 | April – June | 31 July |
| Q2 | July – September | 31 October |
| Q3 | October – December | 31 January |
| Q4 | January – March | 31 May |
New form numbers from Tax Year 2026-27
| Return for | Old form | New form |
|---|---|---|
| TDS on salary | 24Q | 138 |
| TDS on other payments to residents | 26Q | 140 |
| TDS on payments to non-residents | 27Q | 144 |
| TCS | 27EQ | 143 |
TDS certificates
After filing returns, deductors issue TDS certificates to the people they deducted tax from: an annual certificate to employees for salary TDS (traditionally Form 16) and quarterly certificates for other payments. These help recipients claim credit in their returns.
If you're late or don't deduct
- Interest for late deduction or late deposit.
- Late fee of ₹200 per day for late returns, up to the amount of TDS.
- Penalty in certain cases of non-filing or incorrect filing.
- Disallowance of part of the related expense when computing your business income.
See Penalties & late fees for more.
Last updated 29 September 2026. This page is general information based on the rules in force on that date, not professional advice. Tax rules, rates and due dates can change through budgets and government notifications. Contact us to confirm what applies to your situation.