TDS Return and Payment Due Date for FY 2025–26: A Simple, Practical Guide

Introduction

If you handle salaries, vendor payments, rent, contractor bills, or professional fees, there’s one system you simply cannot ignore: TDS, or Tax Deducted at Source. It’s one of those things everyone knows is important, but very few understand properly. Most businesses only think about TDS when a notice arrives, usually because of missed deadlines, interest, or penalties.

Here’s the thing: TDS isn’t complicated. What makes it stressful is missing dates. When you fall behind, you don’t just pay a small fine; you deal with interest, mandatory late fees, penalties, and extra paperwork. Suddenly, a five-minute task becomes a two-day headache.

This guide breaks down what TDS is, TDS return due dates for FY 2025–26, payment deadlines, late fees, interest, penalties, and everything else that matters in the simplest language possible. We’ll also add relatable examples so you understand how it works in real life.

What Is TDS?

Let’s start with the basics.

TDS stands for Tax Deducted at Source. It’s a system where tax is deducted at the time you make a payment or make his ledger credited , not at the end of the year.

Think of it like this:

When you buy a movie ticket online, the tax is automatically added at checkout. You don’t pay it separately later.

TDS works the same way, except here, you deduct the tax before making the payment.

A simple example:

You hire a freelance graphic designer and agree to pay them ₹50,000.

As per TDS rules, professional fees attract TDS at 10%.

So you do this:

• Pay freelancer: ₹45,000
• Deduct TDS: ₹5,000
• Deposit ₹5,000 with the government
  

That ₹5,000 goes to the government as  tax on behalf of the freelancer. When the freelancer files their ITR, they can claim credit for this.

Where is TDS applied?

TDS applies to:

• Salary
• Rent
• Contractor payments
• Professional fees
• Commission
• Interest
• Brokerage
• Certain business expenses and many more

The logic behind TDS is simple: deduct  tax at the source and reduce tax evasion.

How TDS Works In 4 Simple Steps

Here’s the step-by-step flow:

Step 1: You deduct TDS

Whenever you make a payment covered under TDS (like salary or contractor bills), you deduct the required percentage, if the threshold limits are crossed.

Step 2: You deposit TDS

The deducted TDS must be deposited with the government within the due date.

Step 3: You file the TDS return

This is where you report all the TDS you deducted and deposited every quarter. 

Step 4: The government updates Form 26AS

The person you paid (employee/vendor) sees the TDS credit in their Form 26AS.

Smooth and simple if you follow timelines. If you don’t, interest, penalties, and fees start adding up.

TDS Payment Due Dates for FY 2025–26

You must deposit TDS every month, based on when you deducted it.

Here is the rule:

• TDS deducted in any month (April to February) must be deposited on or before the 7th of the next month.
• TDS deducted in March must be deposited on or before 30th April. 
• Why does March get time till 30 April? Because March is the year-end. Businesses need extra time to close books, calculate salaries, incentives, bonuses, etc.

Example to Understand TDS Payment Dates

You paid a contractor on 10 May and deducted TDS.

Payment due date?
→ 7 June

Missing these dates triggers interest and penalties, which grow quickly.

TDS Return Due Date for FY 2025–26

TDS returns must be filed quarterly. They include details like:

• PAN of deductees
• Amount paid
• Amount of TDS deducted
• TDS challan details

Here are the filing due dates for FY 2025–26:

Quarter	Period	TDS Return Due Date
Q1	Apr–Jun	31 July 2025
Q2	Jul–Sep	31 October 2025
Q3	Oct–Dec	31 January 2026
Q4	Jan–Mar	31 May 2026

These filings typically use forms like:

• Form 24Q – Salary
  
• Form 26Q – Non-salary domestic payments
  
• Form 27Q – NRI payments
  

If you miss filing these returns, a mandatory late fee applies. There is no way to waive it.

Interest on Late Payment of TDS

This is where most people get caught.

If you delay TDS either deduction or deposit interest is charged under Section 201(1A).

The interest rates are:

1% per month, if you deducted TDS late

(Delay in deduction)

1.5% per month, if you deposited TDS late

(Delay in payment after deduction)

Even a 1-day delay = full month interest.

Real-life examples

Example 1: Late deduction

You should have deducted TDS on 10 June,
but you deducted it on 20 June.

Delay = 10 days
Interest = 1% of TDS amount (for 1 month)

Example 2: Late deposit

You deducted TDS on 5 December,
but deposited it on 20 December.

Delay = 15 days
Interest = 1.5% of TDS amount (for 1 month)

Example 3: Both delays

You deducted late and deposited late.

You’ll pay:

• 1% per month (deduction delay)
• 1.5% per month (deposit delay)
  

This adds up quickly.

Late Fee on TDS Return Filing (Section 234E)

Late filing of TDS returns attracts a mandatory late fee:

₹200 per day till the date of filing

(Non-negotiable)

The fee continues until:

• You file the return
• This fee keeps adding up until you finally submit the return. But there’s a built-in limit. The total late fee can never be more than the TDS amount you were supposed to report for that quarter.

Even if the delay is unavoidable, this fee must be paid.

Example

TDS for the quarter: ₹8,000
Delay: 20 days

Late fee = ₹200 × 20 = ₹4,000
You must pay this before filing the return. 

Penalty on TDS (Section 271H)

On top of interest and late fees, the Income Tax Department may impose a penalty if:

• TDS return is filed after one year,
• OR incorrect information is submitted,
• OR TDS isn’t filed at all.
  

Penalty range:

₹10,000 to ₹1,00,000

This is usually applied in more serious or repeated non-compliance cases.

Why Timely TDS Compliance Matters

You’re not just avoiding fines. You’re ensuring smoother operations.

Here’s why it matters:

Avoids interest charges

TDS interest is expensive and unavoidable.

Prevents accumulation of late fees

₹200 per day adds up quickly.

Avoids penalties

Section 271H penalties are heavy and stressful.

Keeps tax records clean

Businesses with poor compliance risk scrutiny.

Ensures payees get TDS credit in time

Employees and vendors rely on timely credits for filing their ITR.

Reduces notices and follow-ups

Most tax notices are about TDS mismatches and delays.

Strengthens credibility

Vendors, employees, and auditors trust organized businesses.

Relatable Examples: How TDS Mistakes Affect Real Businesses

Example 1: The Freelance Photographer

A small marketing agency forgets to deposit TDS deducted from a freelance photographer’s payment.

The result:

• Photographer doesn’t see credit in Form 26AS
• He can’t file ITR
• He panics and keeps calling the agency
• The agency has to pay interest and late fee
  

A 3-minute task became a week-long headache.

Example 2: The Small Manufacturing Unit

A factory owner delays TDS for a few months due to cash flow issues.

He thought interest will be minimal.
But once calculated:

• Interest at 1.5% per month
• Late fee ₹200 per day
• Penalty  may be there. 

The entire cost was far more than the TDS amount itself.

Example 3: The Restaurant

A restaurant deducts TDS on salaries, rent, and vendor payments.

They maintain an Excel sheet manually.

One month, an entry was missed.
The accountant realized it during quarterly filing.

Because the deposit was late, they paid:

• Interest
• Late fee

Had they used simple accounting software with reminders, this wouldn’t have happened.

Best Practices to Stay on Top of TDS Compliance

These simple habits can save you from most TDS issues:

• Deduct TDS as soon as your bill is approved
• Set monthly reminders and make sure to pay it within 7th of the following month 
• Use accounting or business management software
• Maintain correct PAN and details
• Reconcile challan vs books monthly
• File returns a week before the due date

Final Thoughts

TDS is not as complicated as it looks. The real challenge is staying on schedule. Once you understand:

• What TDS is
• When to deposit it
• When to file TDS returns
• What interest and penalties apply

…you’ll find the system quite manageable.

For FY 2025–26, sticking to the due dates ensures:

• No interest on late payment
• No late fees
• No penalties
• No notices
• No vendor or employee issues

Good record-keeping whether manual or through simple software ensures that TDS compliance becomes a routine habit instead of a constant stress point.