Quarterly TDS Filing for Salary and Vendor Payments Using Forms 24Q and 26Q
- Astha Bhatia
- 16 hours ago
- 9 min read
Quarterly TDS filing for salary and vendor payments is a mandatory compliance requirement under the Income Tax Act, 1961, for every deductor holding a valid TAN. Employers and businesses must report tax deducted on salaries and non-salary payments through Forms 24Q and 26Q within prescribed timelines. These filings ensure accurate credit of TDS to deductees, correct reflection in Form 26AS and AIS, and smooth income tax return processing. For FY 2025–26, the filing framework and due dates remain unchanged, making timely and accurate quarterly compliance critical to avoid fees, interest, and penalties.
Table of Contents
What Is Quarterly TDS Filing Under the Income Tax Act, 1961
Quarterly TDS filing is a statutory compliance requirement under the Income Tax Act, 1961, applicable to every deductor who deducts tax at source and holds a valid Tax Deduction and Collection Account Number (TAN). Once tax is deducted from salary or other specified payments, the deductor must deposit the tax with the government and subsequently file a quarterly TDS return. This return acts as a reconciliation statement linking the tax deducted, challans used for deposit, and deductee-level details such as PAN and payment nature.
The objective of quarterly TDS filing is to ensure that tax credits flow correctly to deductees, are accurately reflected in Form 26AS and the Annual Information Statement, and enable smooth processing of income tax returns. Failure to file these statements correctly or on time disrupts this chain and often results in notices, interest, or penalties.
Difference Between Form 24Q and Form 26Q for TDS Compliance
Forms 24Q and 26Q serve different purposes within the TDS compliance framework. Form 24Q is exclusively meant for reporting TDS deducted on salary payments under Section 192. It captures employee-level salary details, deductions, exemptions, and tax computation for the financial year.
Form 26Q, on the other hand, is used for all non-salary TDS deductions. This includes payments made to vendors, contractors, professionals, landlords, lenders, and commission agents. While both forms are filed quarterly and follow the same due date structure, the nature of information, applicable sections, and reporting format differ significantly. Using the correct form is critical, as misclassification can lead to validation failures and compliance defects.
Form 24Q for Salary Payments Under Section 192
Form 24Q is the quarterly TDS statement used by employers to report tax deducted from salaries paid to employees. TDS on salary is governed by Section 192, which requires the employer to estimate the employee’s annual taxable income, apply the applicable tax regime, consider eligible deductions and exemptions, and deduct tax accordingly throughout the year.
Form 24Q consists of two annexures. Annexure I is filed every quarter and contains employee-wise TDS details, challan information, and tax deposited. Annexure II is filed only in the fourth quarter and provides a comprehensive annual salary breakup, including exemptions, deductions, and taxable income. Accuracy in Form 24Q is especially important, as errors directly affect Form 16 issuance and employee tax filings.
Quarterly Due Dates for Filing Form 24Q for FY 2025–26
For the financial year 2025–26, the quarterly due dates for filing Form 24Q follow the standard compliance calendar. Returns for the April–June quarter must be filed by 31 July, for July–September by 31 October, for October–December by 31 January, and for January–March by 31 May. These timelines apply uniformly unless an official extension is notified.
Meeting these deadlines ensures timely reflection of salary TDS in employee tax records. Delays often result in late filing fees and create downstream issues during income tax return filing for employees.
Form 26Q for Vendor and Non-Salary Payments
Form 26Q is the quarterly TDS return used for reporting tax deducted on non-salary payments. This includes payments to vendors and service providers where tax is deducted at source under various provisions of the Income Tax Act. Unlike salary TDS, tax under Form 26Q is typically deducted at the time of credit or payment, whichever is earlier.
The form captures deductee PAN, payment amount, nature of payment, applicable section, tax deducted, and challan details. It does not cover property transactions or certain one-time statements, which are reported through separate challan-cum-statements. Proper classification of payments under Form 26Q is essential to avoid mismatches and excess or short deduction issues.
Common Sections Covered Under Form 26Q for Vendor Payments
Form 26Q commonly covers TDS deductions under multiple sections, such as payments to contractors, professional fees, rent, interest, and commission. Each section has its own threshold limits, rates, and conditions. Applying the correct section determines the correct rate of deduction and reporting structure.
Errors often arise when businesses apply a generic TDS rate without evaluating the exact nature of the payment. This can lead to under-deduction or over-deduction, both of which create compliance and reconciliation challenges.
Quarterly Due Dates for Filing Form 26Q
The quarterly due dates for filing Form 26Q are the same as those applicable to Form 24Q. Returns for the first three quarters must be filed by the end of the month following the quarter, while the fourth quarter return is due by 31 May. These timelines apply regardless of the volume or number of vendor transactions.
Even if deductions occur only once during a quarter, filing Form 26Q within the due date remains mandatory. Non-filing or delayed filing attracts statutory fees and penalties.
Process of Quarterly TDS Filing for Forms 24Q and 26Q
The quarterly TDS filing process begins after depositing the deducted tax using a valid challan. Deductors must then prepare the TDS return file using the prescribed utility, capturing challan details, deductee information, and deduction data. Once validated, the file is uploaded through the income tax e-filing system.
If errors are identified later, correction statements must be filed using consolidated files obtained from the TDS reconciliation system. Each step in the process is interlinked, making accuracy at the data preparation stage extremely important.
TDS Deposit Timelines Linked to Quarterly TDS Filing
TDS deposit timelines operate independently of quarterly return filing but directly affect it. In most cases, TDS deducted during a month must be deposited by the 7th of the following month. For deductions made in March, the deposit deadline is extended to 30 April.
Quarterly returns can be filed only after tax has been deposited. Any delay in deposit not only attracts interest but also postpones return filing, increasing the risk of late filing fees.
Penalties, Late Fees, and Interest for Delay in TDS Filing
Delay in filing quarterly TDS returns attracts a mandatory late fee calculated on a per-day basis, subject to a maximum cap. In addition to late fees, penalties may be levied for non-filing, incorrect filing, or failure to issue certificates. Interest is also charged for the delayed deduction or deposit of tax.
These charges are statutory and largely non-discretionary. Regular delays can also increase the likelihood of scrutiny and compliance notices from the tax department.
Common Errors in Quarterly TDS Filing and How to Avoid Them
Frequent errors include incorrect PAN details, challan mismatches, wrong section codes, and duplication of entries. Such errors result in validation failures or incorrect credit to deductees. Many issues arise due to manual data handling or a lack of reconciliation between accounting records and challans.
Maintaining structured records, reconciling data before filing, and reviewing validation reports carefully help reduce these errors significantly.
Recent Updates Impacting Quarterly TDS Filing for FY 2025–26
For FY 2025–26, the quarterly TDS filing framework and due dates remain unchanged. However, procedural enhancements and additional validation requirements have been introduced to improve data accuracy and reporting consistency. Deductors are also required to complete corrections for earlier periods within prescribed timelines before system-level restrictions apply.
Staying updated with procedural changes is essential to ensure uninterrupted compliance.
How Digital Platforms Simplify Quarterly TDS Filing
Digital compliance platforms streamline quarterly TDS filing by integrating deduction tracking, challan reconciliation, validation checks, and return filing into a single workflow. Automated checks reduce errors, while real-time status tracking improves visibility across quarters.
Platforms like TaxBuddy help businesses and employers manage Forms 24Q and 26Q more efficiently by simplifying data preparation, corrections, and filing, especially where multiple deductees and sections are involved.
Conclusion
Quarterly TDS filing for salary and vendor payments is a critical compliance responsibility that directly impacts deductees and overall tax reporting accuracy. Timely deposits, correct form usage, and error-free returns help avoid penalties and ensure a seamless flow of tax credits. With increasing data matching and system-driven validations, structured processes and reliable tools have become essential for consistent compliance.
For anyone looking for assistance in tax filing and TDS compliance, it is recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Who is required to file quarterly TDS returns under the Income Tax Act, 1961?
Any person or entity holding a valid TAN and deducting tax at source is required to file quarterly TDS returns. This includes employers deducting TDS on salaries and businesses or professionals deducting TDS on vendor, contractor, rent, interest, or professional payments. The obligation applies irrespective of the size of the business once TDS is deducted.
Q2. What is the difference between Form 24Q and Form 26Q?
Form 24Q is used exclusively for reporting TDS deducted on salary payments under Section 192. Form 26Q is used for reporting TDS on non-salary payments such as contractor fees, professional charges, rent, interest, and commissions. Both forms are filed quarterly, but capture different types of payment and deduction details.
Q3. Is quarterly TDS filing mandatory even if TDS is deducted only once in a quarter?
Yes, quarterly TDS filing is mandatory if even a single TDS deduction is made during the quarter. The law does not provide any exemption based on the number of transactions. Failure to file the quarterly return can attract late fees and penalties.
Q4. What are the due dates for filing Forms 24Q and 26Q for FY 2025–26?
For FY 2025–26, the due dates remain unchanged. Returns for Q1 are due by 31 July, Q2 by 31 October, Q3 by 31 January, and Q4 by 31 May. These dates apply to both Forms 24Q and 26Q unless an official extension is granted.
Q5. Is it mandatory to deposit TDS before filing the quarterly return?
Yes, TDS must be deposited before filing the quarterly return. The return can only be filed once the challan details of the deposited tax are available. Delay in deposit also results in interest liability, even if the return is filed on time.
Q6. Can the same challan be used for filing both Form 24Q and Form 26Q?
Yes, a single challan can be used for multiple TDS returns, provided the total tax deposited is correctly allocated and reported across the relevant forms. Accurate challan mapping is essential to avoid validation errors and mismatches.
Q7. What happens if the PAN details of an employee or vendor are incorrect or missing?
Incorrect or missing PAN details lead to validation failures and incorrect credit of TDS to the deductee. In the case of vendor payments, a missing PAN may also result in higher TDS rates. Such errors must be corrected through a correction statement to ensure compliance.
Q8. Is filing a NIL TDS return required if no tax is deducted during a quarter?
While filing a NIL TDS return is not mandatory in all cases, it is strongly recommended. Filing NIL returns helps maintain a clean compliance record and avoids future notices questioning non-filing for a particular quarter.
Q9. What are the penalties for late filing of quarterly TDS returns?
Late filing attracts a mandatory late fee calculated on a per-day basis, subject to a maximum limit linked to the TDS amount. In serious cases of non-filing or incorrect filing, additional penalties may be imposed. Interest is also charged separately for delays in the deduction or deposit of TDS.
Q10. Can quarterly TDS returns be revised after filing?
Yes, correction statements can be filed to rectify errors in PAN details, challan information, deductee data, or section codes. Corrections are made using consolidated files obtained from the TDS reconciliation system and must be filed within prescribed timelines.
Q11. How does quarterly TDS filing affect Form 26AS and AIS of deductees?
Quarterly TDS returns directly populate Form 26AS and the Annual Information Statement of deductees. Any delay or error in filing can result in missing or incorrect TDS credits, which may lead to tax demands or delays in income tax return processing.
Q12. Does TaxBuddy offer both self-filing and expert-assisted plans for TDS and ITR compliance?
TaxBuddy offers both self-filing and expert-assisted options, allowing users to choose based on the complexity of their compliance requirements. The platform supports structured TDS filing for Forms 24Q and 26Q and integrates this data seamlessly with income tax return filing for accurate and end-to-end compliance.
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