TDS & TCS Compliance in India: Rates, Returns & Due Dates 2026
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) ensure tax is collected at the point a transaction happens. Getting the mechanics wrong is one of the most common reasons businesses receive income-tax notices, so a clear process matters.
What Is TDS vs TCS?
Under TDS, the payer deducts tax before making a payment (salary, rent, professional fees, contractor payments) and deposits it with the government. Under TCS, the seller collects tax from the buyer on specified goods (scrap, minerals, motor vehicles above ₹10 lakh) at the time of sale.
Common TDS Sections & Rates
- 194C — Payments to contractors: 1% (individual/HUF), 2% (others).
- 194J — Professional or technical fees: 10% (2% for technical services).
- 194I — Rent: 10% on land/building, 2% on plant & machinery.
- 194Q — Purchase of goods above ₹50 lakh: 0.1%.
- 192 — Salary: as per the employee's applicable slab.
Deposit & Return Due Dates
- TDS deposit: By the 7th of the following month (30 April for March deductions).
- Quarterly returns: Form 24Q (salary), 26Q (non-salary), 27Q (non-residents) — due 31 July, 31 October, 31 January, and 31 May.
- TCS return (27EQ): Due 15 days after each quarter-end.
- TDS/TCS certificates: Form 16 by 15 June; Form 16A within 15 days of filing each quarterly return.
Penalties for Non-Compliance
- Late deduction/deposit: Interest of 1% per month (non-deduction) or 1.5% per month (deducted but not deposited).
- Late filing of return: ₹200 per day under Section 234E until filed.
- Disallowance: 30% of the expense can be disallowed if TDS is not deducted.
Best Practices
Validate every vendor's PAN, deduct at the correct section, reconcile Form 26AS/AIS each quarter, and never miss the 7th-of-month deposit. Outsourcing this to specialists eliminates most notices.
Statura manages TDS/TCS compliance and income-tax filings for hundreds of Indian businesses — accurate deductions, on-time returns, zero surprises.