TDS / TCS — FAQs

TDS/TCS: Complete FAQs & Compliance Guide (India)

TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are core compliance pillars in India. This page explains—clearly and step by step—who must deduct/collect, the rates and thresholds, due dates to deposit and file statements, and how to use TAN, Challan ITNS-281, and quarterly returns (24Q/26Q/27Q/27EQ). You’ll learn how to download and issue Form 16/16A/16C/27D, view credits in Form 26AS/AIS, and handle special PAN-based challan-cum-statements (26QB/26QC/26QD/26QE). We also cover higher-rate rules (like PAN not furnished and specified non-filers) and practical correction workflows. Use this TDS/TCS guide to prevent mismatches, protect cash flow, and keep your filings accurate and on time.

TDS/TCS — Frequently Asked Questions (India)

TDS (Tax Deducted at Source) means the payer (deductor) withholds tax from specified payments (like salary, interest, rent, etc.) and deposits it to the Central Government. The payee (deductee) gets credit based on Form 26AS/TDS certificate

TCS (Tax Collected at Source) is tax collected by a seller from the buyer on certain transactions (prescribed goods/services and some special cases like LRS/overseas tour packages) and paid to the government.

Anyone responsible for deducting TDS or collecting TCS must obtain a TAN. Exceptions: challan-cum-statement forms 26QB (194-IA), 26QC (194-IB), 26QD (194M) and 26QE (194S) are PAN-based—no TAN required.

Time and rates depend on the relevant section (e.g., salary vs. interest vs. rent). The law specifies time of deduction/collection (often at credit or payment, whichever is earlier) and the applicable rate; refer to the department’s consolidated TDS page and rate references.

Deposit electronically (mandatory for companies and 44AB cases) or via Challan ITNS-281 at an authorized bank. Government offices may use Form 24G through PAO/TO/CDDO.

  • TDS: Form 24Q/26Q/27Q (salary/other payments/payments to non-residents)
  • TCS: Form 27EQ
  • These are the statutory quarterly e-statements referenced in CBDT notifications/rules.

  • Form 16A (non-salary TDS): within 15 days from the due date of the relevant TDS statement.
  • Other certificate timelines (e.g., 16/16A/16C/27D) are captured in the official calendar and booklets. Income Tax India+2Income Tax India+2

Check Form 26AS/AIS via the e-Filing portal, internet banking, or TRACES. Use the Tax Credit Mismatch help if entries don’t reflect correctly.

Eligible resident individuals may submit Form 15G (non-senior) or Form 15H (senior citizen) to the payer for nil deduction in permitted cases. PAN is mandatory; without PAN the declaration is invalid.

The payer applies higher TDS as per section 206AA if PAN isn’t provided. FAQs explicitly cover this.

Sections 206AB (higher TDS) and 206CCA (higher TCS) apply to specified non-filers (with CBDT compliance-check utility). Note: Finance Bill/Budget FAQs indicate these were proposed to be omitted from 01-Apr-2025—always verify the current status.

Apply online in Form 13 for nil/lower deduction where justified by estimated tax liability; AO issues the certificate with a UIN that the deductor must quote.

Yes—special challan-cum-statement forms exist:
26QB (194-IA property), 26QC (194-IB rent), 26QD (194M), 26QE (194S VDA)—all PAN-based and for resident deductees; if deductee is non-resident, file 27Q.

The law has TDS on purchase (194Q) and TCS on sale (206C(1H)) with coordination rules; refer to the official tutorial/FAQs on sale or purchase of goods for scope, timing and exclusions.

Use the Challan Correction workflow on the e-Filing portal for AY/Head changes, and obtain the Consolidated (Conso) file from TRACES before filing correction statements.

Issue the correct TDS/TCS certificate (e.g., 16/16A/16C/27D) within the prescribed time; certificates downloaded from TRACES carry a unique identifier and are valid.

Closing Notes — TDS/TCS

Staying compliant with TDS/TCS is mostly about doing the basics on time: deduct/collect at the correct rate, deposit via ITNS-281, file the right quarterly statement (24Q/26Q/27Q/27EQ), and issue certificates (16/16A/27D) within the due dates. Reconcile credits in Form 26AS/AIS and fix any errors with challan/statement correction to prevent demand notices. Keep PAN/TAN details accurate (higher rates may apply if PAN is missing) and always check the current year’s thresholds and timelines before action.

Notes on rates, thresholds & dates

Rates/thresholds and some compliance dates change via Finance Acts, circulars and notifications (e.g., LRS/overseas tour TCS, quarterly due date relaxations). Always validate against the current year pages/circulars. Income Tax India+1

TDS/TCS FAQ simplified — right rate, right date.

TDS/TCS simplified — right rate, right date.

Sources (official)

Next steps

Last updated: Oct,2025. Tax thresholds/rates change; if something looks off or you need a scenario added, send us a note and we’ll update quickly.

Disclaimer: The information on this page is for general guidance only and is not tax, legal or professional advice. Laws and thresholds change, and application depends on your facts. While we aim to keep content current (Finance Act, 2025), errors or omissions may occur. Always refer to the Income-tax Act/Rules, CBDT notifications/circulars and consult a qualified advisor. If there is any conflict with the law, the official provisions prevail. TaxBizMantra and the authors accept no liability for actions taken or not taken based on this material; examples are illustrative and do not create a client–advisor relationship.