TDS Returns

Upstream dependency: A CA Engagement must exist for the client (the deductor). The engagement must carry a valid TAN (Tax Deduction Account Number) and be flagged as a TDS Deductor. Downstream: Filing a 26Q automatically creates a Form 16A issuance task for each deductee. Filing a 24Q in Q4 creates a Form 16 issuance task for all employees, due by 15 June. These tasks appear in the compliance task queue for follow-up.

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What is a TDS return?

A TDS return (auto-named TDS----) is a quarterly statement of all tax deducted at source by a deductor and the challans used to deposit that tax with the government. It records who was paid, under which section, how much TDS was deducted, and whether the deposited challan amounts reconcile with the deductions.

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Who uses this feature

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Before you start

• Confirm the correct TAN with the client before creating the return. Returns filed under a wrong TAN cannot be corrected by amendment; they require a fresh filing.
• Collect the deductee details: PAN, name, total amount paid, TDS rate, and TDS amount for each deductee in the quarter.
• Collect the challan details from the client’s bank records or OLTAS (Online Tax Accounting System): BSR code, challan number, deposit date, and amount for each deposit.
• Verify that the client has actually deposited the TDS with the government before filing. Filing without deposit creates a mismatch and attracts interest under section 201(1A).

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Form types

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Financial year and quarter

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Status track

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Step-by-step: prepare a TDS return

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Step 1: Create the return

Path: Filings section → TDS Returns → New

1. Select the CA Engagement (deductor TAN and name auto-populate).
2. Select the Form Type (24Q, 26Q, 27Q, or 27EQ).
3. Select the Financial Year.
4. Select the Quarter (Q1, Q2, Q3, or Q4).
5. Save. The record is created in Draft status with the auto-name TDS----.

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Step 2: Enter deductee lines

Tab: Deductees (CA TDS Deductee) Add one row for each deductee (the person or company from whom the tax was deducted). For each row: For 24Q (salary): enter one row per employee, covering the salary paid and TDS deducted in the quarter. Annualised salary calculations are done outside the system (typically in the payroll software); enter only the quarterly figures here. For 27EQ (TCS): the fields reflect the buyer’s PAN, the nature of goods, the collection rate, and the amount collected rather than deducted.

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Step 3: Enter challan lines

Tab: Challans (CA TDS Challan) Add one row for each challan used to deposit TDS with the government. For each row:

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Step 4: Validate the reconciliation

Once all deductee and challan lines are entered, click Validate. The system checks:

• Total TDS in deductee lines (sum of all TDS Deducted values) matches Total Challan amount (sum of all Amount Deposited values).
• The Reconciled indicator turns Yes if the two totals match exactly.
• If there is a mismatch, the indicator shows No with the difference amount. Correct either the deductee lines or the challan lines before proceeding.

A return cannot move to Validated status unless the Reconciled indicator shows Yes.

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Step 5: Submit for manager review

Once validated, the CA Staff submits the return for review. The status moves to Validated. The CA Manager:

1. Reviews the deductee lines against the challan receipts.
2. Confirms the form type, financial year, and quarter.
3. Downloads the FVU-format file for upload (generated by the system).
4. Uploads the file to the TIN-NSDL / TRACES portal.
5. Returns to the system and clicks Mark as Filed.
6. Enters the Provisional Receipt Number (PRN) and the Filing Date.
7. The return status moves to Filed.

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What happens after filing

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After filing 26Q

The system automatically creates a Form 16A issuance task for each deductee in the return. The task is assigned to the CA Staff responsible for this engagement. Form 16A must be generated from TRACES and issued to the deductee within 15 days of the filing due date.

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After filing 24Q (Q4 only)

The system creates a Form 16 issuance task for all employees in the return. Form 16 must be issued to all employees by 15 June of the same year. Q1, Q2, and Q3 filings of 24Q do not trigger Form 16 tasks.

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After filing 27EQ

No automatic task is created. The collected tax certificate (Form 27D) must be issued to the buyer within 15 days of the filing due date. A manual task can be created from the compliance task list if required.

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Nil returns

If the deductor made no payments in the quarter that would require TDS deduction, you are still required to file a nil return for that quarter. Create the return with no deductee lines and a nil challan entry. Validate and file as normal. Failure to file a nil return also attracts the section 234E late fee.

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Corrections to filed returns

If an error is discovered in a filed return (wrong PAN, incorrect challan, missing deductee), do not edit the original filed return. Instead:

1. Open the filed return.
2. Click Create Revised Return. The system creates a new Draft return pre-populated with all the original data.
3. Correct the specific error in the revised return.
4. Validate and file the revised return through TRACES Correction Statement.

The original filed return remains unchanged in the system for reference. The revised return is linked to it.

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Field guide

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Notifications and alerts

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Workspace access

TDS Returns are accessible from:

1. Portal (Filings section): Sign in to the portal, go to Filings, then Reconciliation to access TDS returns and reconciliation tools.
2. Desk workspace (Compliance Management card): Open Compliance Tasks and filter by the TDS obligation type to see the parent task linked to this return.

The compliance task linked to a TDS obligation shows the due date and the preparation status, so the CA Manager can track all quarterly TDS filings from the compliance ageing report.

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Best practices

• Match challan references exactly as they appear on OLTAS. Copy-paste the BSR code and challan number from the OLTAS enquiry page; do not re-type them. A single transposed digit will cause TRACES processing to fail.
• Validate the reconciliation before submitting for review. Never hand a return to the manager in Draft status; the Reconciled check must pass first. If it does not reconcile, check whether a challan was missed or a deductee amount was entered incorrectly.
• File nil returns on time. A nil return that is filed late still attracts the section 234E fee. Create a nil return shell at the start of each quarter for clients who may not have any deductions; update it with data if deductions occur before the due date.
• Update deductee PAN before filing. If a deductee’s PAN is missing or incorrect at the time of filing, the system applies the higher deduction rate under section 206AA. Getting the PAN corrected in a revised return is possible but adds work. Obtain PANs from deductees before the payment, not after.
• Issue Form 16A within 15 days of the due date. The Form 16A task created after filing 26Q has a system-calculated due date. Track it in the compliance task queue and do not let it slip; non-issuance of Form 16A carries a penalty of Rs. 100 per day per deductee.
• Reconcile with Form 26AS before filing 24Q Q4. The employee’s TDS as reflected in their Form 26AS must match what you are filing. Check for any short-deductions or excess deductions before the Q4 filing to avoid notices under section 154.
• Use revised returns for corrections, never edit filed records. The filed return in the system is your audit trail. Always create a revised return and file a correction statement through TRACES for any post-filing changes.

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Related features

• Income Tax Computations - TDS credits entered in the Tax Paid tab of a computation must match what was filed in these returns
• Workflow Overview - how TDS return preparation fits into the full compliance lifecycle
• Feature Overview - quick reference for all features including the TDS Return entry and its downstream Form 16/16A impact