Tax Deducted at Source (TDS) is a system introduced by the Income Tax Department of India, where tax is deducted at the time of making specified payments such as salary, rent, professional fees, commission, or contract payments. The deducted tax must be deposited with the government and reported through TDS returns.

TDS filing involves submitting details of tax deductions and deposits made during a quarter to the Income Tax Department in a prescribed format.

• Ensures timely tax collection
• Reduces tax evasion
• Simplifies tax payments for individuals
• Helps the government track taxable transactions
• Facilitates accurate tax credit for deductees via Form 26AS

• Companies, LLPs, and partnership firms
• Proprietorships whose turnover exceeds limits under tax audit provisions
• Individuals making specified payments liable for TDS (like rent, salary, contractor payments, commission, etc.)
• Government and public sector undertakings

• TAN (Tax Deduction Account Number)
• PAN details of deductor and deductees
• TDS challans (for tax deposits)
• Details of payments made (amount, date, nature of payment)
• Details of tax deducted (rate, amount, deposit date)
• Form 16 and Form 16A (for salary and non-salary TDS certificates)

Step 1: Collect Deduction and Payment Details
• Gather information about payments made and TDS deducted.

Step 2: Deposit TDS with Government
• Deposit the deducted TDS amount using Challan ITNS 281 via online banking or at an authorized bank.

Step 3: Download and Use RPU & FVU Utilities
• Download the Return Preparation Utility (RPU) and File Validation Utility (FVU) from the NSDL website to prepare TDS returns.

Step 4: Prepare TDS Return File
• Fill in payment, deductee, and challan details as per the form type.

Step 5: Validate and Upload the Return
• Validate the file using FVU and upload it on the e-Filing portal or through TIN-Facilitation Centres.

Step 6: Download TDS Acknowledgment
• FOnce processed, download the acknowledgment number for future reference.

• Late filing fee of ₹200 per day under Section 234E
• Penalty ranging from ₹10,000 to ₹1 lakh under Section 271H if defaults persist

• Avoids penalties and interest
• Ensures seamless TDS credit to deductees
• Simplifies tax assessments
• Maintains regulatory compliance
• Builds business credibility and financial discipline