What Is TDS Payment?
TDS payment refers to the deposit of tax deducted from payments made to another person with the central government within prescribed timelines. The deductor acts as a tax collector on behalf of the government.
Who Is Required to Pay TDS?
TDS payment is applicable to:
- Employers deducting TDS on salary
- Businesses and professionals making specified payments
- Companies, LLPs, firms, and eligible individuals
- Buyers deducting TDS on property or rent
Applicability depends on the nature and threshold of payment.
Common Payments Covered Under TDS
- Salary (Section 192)
- Contractor payments (Section 194C)
- Professional fees (Section 194J)
- Rent (Section 194I)
- Interest (Section 194A)
- Commission and brokerage (Section 194H)
Step-by-Step Process of TDS Payment
Step 1: Identify Applicable TDS Section
Before deduction, determine:
- Correct section of Income Tax Act
- Applicable threshold limit
- Correct TDS rate
Incorrect section selection may lead to notices.
Step 2: Deduct TDS at Correct Time
TDS must be deducted:
- At the time of credit to payee’s account or
- At the time of actual payment
Whichever is earlier, as per law.
Step 3: Calculate TDS Amount
Compute:
- TDS = Applicable rate × Payment amount
If PAN is not provided by the payee, higher TDS may apply.
Step 4: Generate Challan for TDS Payment
TDS is paid using:
- Challan ITNS 281 (for most TDS payments)
Details required:
- TAN of deductor
- Assessment year
- Section code
- Nature of payment
Step 5: Pay TDS Online
Deposit TDS through:
- Net banking
- Authorized bank portals
Payment confirmation and challan receipt are generated instantly.
Step 6: File TDS Return
After payment:
- File quarterly TDS return (Forms 24Q, 26Q, 27Q, as applicable)
- Upload details of deductees and challans
Return filing ensures credit to deductee.
Step 7: Issue TDS Certificate
Provide TDS certificates to deductees:
- Form 16 – Salary TDS
- Form 16A – Non-salary TDS
Certificates must be issued within prescribed timelines.
Due Dates for TDS Payment
| Month of Deduction | Due Date |
|---|---|
| April to February | 7th of next month |
| March | 30th April |
Delayed payment attracts interest and penalties.
Interest and Penalty for Late TDS Payment
| Default | Consequence |
|---|---|
| Late deduction | Interest @ 1% per month |
| Late payment | Interest @ 1.5% per month |
| Late return filing | Fee ₹200 per day (max TDS amount) |
Regular monitoring avoids financial losses.
Common Mistakes in TDS Payment
- Wrong section or rate selection
- Incorrect TAN or PAN entry
- Delay in deposit or return filing
- Non-issuance of TDS certificates
Professional compliance management helps prevent errors.
Conclusion
TDS payment is a critical tax responsibility that requires timely deduction, accurate payment, and proper reporting. A systematic step-by-step approach ensures smooth compliance, avoids penalties, and builds trust with vendors, employees, and authorities.
Disclaimer
This article is for informational purposes only and does not constitute legal, tax, or professional advice. TDS rates, sections, due dates, and procedures are subject to change as per applicable laws and notifications. Readers are advised to consult qualified tax professionals before making any compliance or payment decisions.