Tax Deducted at Source (TDS) mechanism is a cornerstone of India’s direct tax system, designed to ensure timely collection of taxes at the source of income generation.
Under the Income-tax Act, 2025, TDS framework has been consolidated under Sections 393 to 422, covering various types of payments such as salary, interest, contractual payments, professional fees, rent, commission etc.
TDS compliance involves four critical stages:
Section | Nature of Payment | Applicability | Due Date |
Section 392(2) | Salary | All Assessee | 7th of next month and 30th April for the payment pertaining to March |
Section 393(1) | Rent | Other than Specified Persons | 30 days from end of the month in which deducted is made |
Section 393(1) | Transfer of any immovable property (other than agricultural land) | Person specified in Table: Sl. No. (3)(i) | |
Section 393(1) | Fees for professional services | All persons | |
Section 393(1) | Commission [not being insurance commission referred to in section 393(1) | Person specified in Table: Sl. No. (1)(i)] | |
Section 393(1) | Brokerage | Person specified in Table: Sl. No. (6)(ii) | |
Section 393(1) | Transfer of a virtual digital asset | Person specified in Table: Sl. No. (8)(vi) | |
Section 393(1) | All payments specified in Section 393(1) other than mentioned above | 7th of next month and 30th April for the payment pertaining to March | |
Note: Specified person” means— (a) any person, not being an individual or Hindu undivided family; or (b) an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the tax year immediately preceding the tax year in which such income or sum is credited or paid;
Compliance | Form No. | Frequency | Due Date |
TDS Return – Salary | Form: 138 | Quarterly | Ø For April-June: 31st July Ø For July-Aug: 31st Oct Ø For Oct-Dec: 31st Jan Ø For Jan-Mar: 31st May |
TDS Return – Non-Salary | Form: 140 | Quarterly | |
TDS Return – Non-resident | Form: 144 | Quarterly | |
Correction Return | Revised return | Event-based | As and when required |
Certificate Type | Form No. | Frequency | Due Date |
Salary Certificate | Form:130 | Annual | 15th June of following Financial Year |
Non-Salary Certificate | Form: 131 | Quarterly | 15 days from due date of Quarterly TDS Return. |
Non-Salary Certificate for TDS u/s 393(1) – Table: Sl. No. (2)(i), Table: Sl. No. (3)(i), Table: Sl. No. (6)(ii), Table: Sl. No. (8)(vi) | Form: 132 | Monthly | Within 15 days from the due date for furnishing challan-cum-statement in Form No. 141 i.e. 15th of next month |
Where a person required to deduct or collect tax fails to do so, or after deduction/collection fails to deposit the same, such person (including the principal officer of a company or employer) is deemed to be an assessee in default, attracting statutory consequences as follows:
Further, unpaid tax along with interest becomes a charge on the assets of the defaulting person. The law also prescribes a time limit for passing orders, being up to six years from the end of the relevant tax year or two years from the correction statement, whichever is later.
However, relief is provided where the recipient (payee/buyer/licensee/lessee) has already reported such income in their return under Section 263, paid due taxes, and the deductor furnishes a prescribed accountant’s certificate—in such cases, the deductor is not treated as an assessee in default.
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