Tax Deducted at Source (TDS) is a crucial compliance requirement under the Income Tax, ensuring that tax is deducted at the time of making specified payments such as salaries, rent, professional fees, interest, and commission. Every individual, business, or entity liable to deduct TDS must file TDS returns quarterly to report the deducted and deposited tax details to the Income Tax Department. Timely and accurate TDS return filing is essential to avoid penalties and ensure compliance with tax laws.

TDS returns must be filed using the relevant forms based on the nature of the transaction. Form 24Q is used for salary payments, Form 26Q for non-salary payments, Form 27Q for payments made to non-residents, and Form 27EQ for Tax Collected at Source (TCS). The due dates for TDS return filing are 31st July, 31st October, 31st January, and 31st May for the first, second, third, and fourth quarters, respectively. After filing, the TDS Certificate (Form 16 or 16A) must be issued to deductees, allowing them to claim tax credits in their income tax returns.

Non-compliance with TDS return filing attracts penalties under Section 234E and 271H of the Income Tax Act. A delay results in a penalty of ₹200 per day, while incorrect or non-filing of TDS returns may lead to fines ranging from ₹10,000 to ₹1,00,000. Additionally, failure to deduct or deposit TDS on time incurs interest at 1% or 1.5% per month.

TDS return filing is a vital compliance measure for businesses, ensuring transparency in tax payments and reducing the burden of tax evasion. Proper and timely filing helps avoid legal repercussions and fosters smooth business operations while maintaining good standing with tax authorities.