TDS (Tax Deducted at Source) is a crucial compliance requirement under the Income Tax Act, 1961, designed to ensure that tax is collected at the very point where income is generated. It helps the government prevent tax evasion, maintain transaction transparency, and streamline revenue collection.
Any person or business making specified payments such as salary, rent, professional fees, contractor charges, interest, commission, brokerage, or consultancy fees must deduct TDS before making the payment and deposit it with the Government.
To legally deduct and deposit TDS, you must have a TAN (Tax Deduction and Collection Account Number) — and this process is known as TDS Registration.
A valid TAN is mandatory for:
- TDS deduction
- TDS deposit
- Filing quarterly TDS returns
- Issuing Form 16/16A
- Compliance under Income Tax laws
Whether you are a company, LLP, partnership firm, trust, NGO, startup, or proprietor, obtaining a TAN is essential if you are making TDS-liable payments.
Benefits of TDS Registration
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Ensures legal deduction of TDS
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Helps avoid heavy penalties & prosecution
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Enables filing of TDS returns
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Required for issuing Form 16 & 16A
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Improves business credibility & compliance
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Smooth financial and payroll management
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Necessary for loans, audits, tenders, and government dealings
Penalties for Not Having TAN / Not Deducting TDS Properly
1. Penalty for non-application of TAN:
₹10,000 under Section 272BB.
2. Penalty for wrong TAN:
₹10,000.
3. Interest for non-deduction or late deduction:
1% to 1.5% per month.
4. Late filing of TDS returns:
₹200 per day (up to ₹10,000 per return).
5. Prosecution in severe cases
Applicable if TDS is deducted but not deposited.
TDS Payment & Return Due Dates
Add a due date section (clients love this):
TDS Payment Dates:
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7th of every month (except March: 30 April)
TDS Return Filing Dates:
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Q1 (Apr–Jun): 31 July
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Q2 (Jul–Sep): 31 Oct
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Q3 (Oct–Dec): 31 Jan
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Q4 (Jan–Mar): 31 May
Consequences of Wrong TDS Filing
Short but powerful:
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TDS mismatch in Form 26AS
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Vendors may not get credit
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Disallowance of expenses under Section 40(a)(ia)
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Higher tax liabilities
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Assessment proceedings
Why Businesses Choose CorpBuddy for TDS
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Monthly reminders
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End-to-end compliance
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