📌 Introduction
TDS (Tax Deducted at Source) is one of the most crucial aspects of income tax compliance for businesses and professionals in India. Whether you're an employer, a company, or a freelancer managing vendors, filing accurate TDS returns is not just a legal requirement but also a reflection of your business’s financial discipline.
However, many taxpayers commit errors that result in notices, penalties, interest, and delays in processing refunds for deductees.
In this blog, we’ll uncover the most common TDS return filing mistakes, their consequences, and how to avoid them effectively.
🧾 What is a TDS Return?
A TDS return is a quarterly statement submitted by the deductor (payer) to the Income Tax Department. It includes:
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TAN details
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PAN of deductees
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Amounts paid
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Tax deducted and deposited
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Relevant section (e.g. 194C, 194J, 194I)
Returns must be filed using Form 24Q (salaries), Form 26Q (non-salaries), Form 27Q (NRI payments), or Form 26QB (property transactions).
⚠️ Common Mistakes to Avoid While Filing TDS Returns
❌ 1. Incorrect or Missing PAN/TAN
Using a wrong PAN or TAN, or failing to quote PAN of the deductee, leads to:
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Higher TDS rates (20% instead of normal rates)
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Rejection of returns
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Mismatch in Form 26AS
✔️ Solution: Always verify PAN and TAN details from the TRACES portal before filing.
❌ 2. Filing Returns Under the Wrong Form
Each type of payment requires a specific TDS return form:
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24Q for salaries
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26Q for resident contractors, professionals
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27Q for NRIs
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26QB for property payments
✔️ Solution: Select the correct form as per the nature of the transaction. Seek expert help if unsure.
❌ 3. Delay in TDS Deposit
TDS must be deposited by the 7th of the following month. For March, the deadline is 30th April.
Penalty: Interest under Section 201(1A) at:
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1% per month for late deduction
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1.5% per month for late deposit
✔️ Solution: Set up automated reminders for due dates.
❌ 4. Incorrect Challan Details (CIN)
Many filers enter the wrong:
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BSR Code
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Challan Number
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Amount
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Date of payment
This results in unmatched entries and return rejection.
✔️ Solution: Double-check challan details using NSDL OLTAS before uploading returns.
❌ 5. Mismatch in TDS Amounts
Mismatch between:
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TDS deducted vs. TDS deposited
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TDS return vs. challan
...leads to default notices and penalties.
✔️ Solution: Use reconciliation tools like Form 26AS, AIS, and TRACES reports before submission.
❌ 6. Not Filing NIL Returns
If no TDS was deducted in a quarter, some deductors skip filing. While not mandatory, filing a NIL return avoids unnecessary compliance follow-ups and notices.
✔️ Solution: File NIL returns as a best practice.
❌ 7. Delay in Filing Returns
TDS returns must be filed quarterly:
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Q1: by 31st July
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Q2: by 31st October
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Q3: by 31st January
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Q4: by 31st May
Late Filing Fee (Sec 234E): ₹200/day until return is filed (max up to TDS amount).
✔️ Solution: Maintain a TDS calendar and get professional help to file on time.
❌ 8. Not Issuing TDS Certificates (Form 16 / 16A)
Deductors must issue:
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Form 16 for salary (by 15th June)
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Form 16A for other TDS (within 15 days of filing return)
Failure results in penalties and employee/vendor dissatisfaction.
✔️ Solution: Use TRACES portal to generate and verify certificates.
❌ 9. Non-validation of Return File
Some people forget to validate the return file using the File Validation Utility (FVU) or submit a corrupt file. This leads to rejection of the return.
✔️ Solution: Always validate the TDS return file using the latest FVU tool.
❌ 10. Ignoring Revisions and Corrections
Errors, if not corrected promptly, can delay TDS credits for deductees and invite scrutiny.
✔️ Solution: Use the TRACES portal to file correction statements proactively.
💡 Best Practices for Accurate TDS Return Filing
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✅ Maintain a deductor-deductee master list
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✅ Use TDS software or outsource to professionals
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✅ Regularly reconcile TDS with Form 26AS
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✅ Keep updated on rates and section changes in each Budget
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✅ Download Justification Reports for defaults and resolve them quickly
📞 How Verotus Finlegal Solutions LLP Can Help
We specialize in end-to-end TDS compliance including:
✔️ Accurate TDS calculation and deduction
✔️ Timely deposit and challan management
✔️ Filing and correction of TDS returns
✔️ PAN validation and TRACES compliance
✔️ Generation and issuance of Form 16/16A
Whether you're a startup, SME, or freelancer – we simplify your TDS filing and keep you penalty-free!
📍 Based in Kolhapur | 📧 verotusllp@gmail.com| 🌐 www.verotusllp.com
📌 Conclusion
TDS compliance is non-negotiable, and even minor mistakes can lead to major consequences like penalties, interest, or refund delays. By avoiding these common errors and adopting best practices, you can ensure smooth TDS return filing and enhance your tax discipline.
If you need expert guidance or want to outsource your TDS filing process—Verotus Finlegal Solutions LLP is here to help.
