TDS Return Filing and Payment Due date for Tax Year 2026-27

TDS Return Filing and Payment Due date for Tax Year 2026-27

TDS Payment Due for tax year 2026-27

Refer RULE 218 INCOME-TAX RULES 2026 Time and mode of payment to Government account of tax deducted or collected at source or tax paid under section 392(2)(a).

Interest on Late Payment of TDS

Under the Income-tax Act, 2025, the interest rules for the late payment or late deduction of Tax Deducted at Source (TDS) are governed by Section 398(3)(a) of Income Tax Act 2025

If a person fails to deduct the tax or fails to pay the tax after deducting it, they are automatically liable to pay simple interest under the following two scenarios:

• Penalty for Late Deduction: If the tax is not deducted on time, simple interest is levied at 1% for every month or part of a month. This interest is calculated from the date on which the tax was supposed to be deductible up to the date it is actually deducted.
• Penalty for Late Payment: If the tax has been properly deducted but is not deposited to the credit of the Central Government on time, simple interest is levied at 1.5% for every month or part of a month. This interest is calculated from the date the tax was actually deducted up to the date it is finally paid.

Example

If TDS of April 2026 of Rs 20000 deducted in June 2026 and Deposited on 8th Aug 2026, Calulate Interest.

To calculate the interest for your scenario, we must apply the rules under Section 398(3)(a) of the Income-tax Act, 2025, which splits the interest into two separate components: one for late deduction and one for late payment.

Because the Act specifies that interest is calculated for “every month or part of a month,” any fraction of a month counts as a full month.

Here is the step-by-step calculation for a TDS amount of ₹ 20,000:

1. Interest for Late Deduction (Section 398(3)(a)(i))

• Rule: 1% per month (or part of a month) from the date the tax was supposed to be deducted until the date it was actually deducted.
• Period: April 2026 to June 2026. This counts as 3 months (April, May, and June).
• Calculation: ₹ 20,000 × 1% × 3 months
• Interest Amount: ₹ 600

2. Interest for Late Payment (Section 398(3)(a)(ii))

• Rule: 1.5% per month (or part of a month) from the date the tax was actually deducted until the date it is finally paid to the government.
• Period: June 2026 to 8th August 2026. This also counts as 3 months (June, July, and August).
• Calculation: ₹ 20,000 × 1.5% × 3 months
• Interest Amount: ₹ 900

Total Interest Payable You will need to pay the sum of both penalties before furnishing your TDS statement.

• Total Interest = ₹ 600 (Late Deduction) + ₹ 900 (Late Payment) = ₹ 1,500

(Note: This calculation assumes the standard interpretation of “part of a month” where the calendar months of April and June are both triggered. You will need to deposit this total interest of ₹ 1,500 along with your principal TDS amount of ₹ 20,000).

Key Compliance Rules regarding this interest:

• Prerequisite for Return Filing: The accumulated interest must be paid before you are allowed to furnish the quarterly TDS statement (under Section 397(3)(b)).
• Charge on Assets: If the deducted tax remains unpaid, the outstanding tax amount, along with the accumulated simple interest, becomes a formal charge upon all the assets of the defaulting person.
• Departmental Orders: If the Assessing Officer issues a specific order regarding the default, the interest must be paid by the person as directed in that order.

TDS Return filing Due Date for Tax Year 2026-27

TDS Statements :  Quarterly statements of Tax Deducted at Source (TDS) are required to be filed under Section 397(3)(b) of the Income-tax Act, 2025.

Quarterly Deadlines: Returns are still filed quarterly. For example, the Quarter 1 (April–June) return is due by 31 July 2026..

New TDS Return Filing form form Tax Year 2026-27

Refer  RULE 219 INCOME-TAX RULES 2026 Statement of deduction or collection of tax at source under section 397(3)(b).

New TDS/TCS Certificates and Declarations

Certificate under section 395 of the Income Tax Act 2025 to be issued for for tax deducted at source

Time Limit for issuance of TDS Certificate

Due date for issuing Form No. 130 :  Ans: The due date for issuance of Form No. 130 is by the 15th June of the Financial Year immediately following the Tax Year in which the income was paid and tax was deducted. For tax year 2026-27 , last date to issue form 130 will be 15th June 2027.

Due date for issuing Form No. 131 and Form 133  The due date for issuance of TDS certificate in Form No. 131 is within 15 days from the due date of furnishing of quarterly statement of tax deducted at source. The details are as follows:

Due date for issuing Form No. 132 :  Form No. 132 must be issued within 15 days from the due date for furnishing the challan-cum-statement in Form No. 141.

Late fees if tds certificate not issued on time

Under the Income-tax Act, 2025, the failure to issue a TDS certificate on time does not attract a “late fee” in the same way that a delayed TDS return does. Instead, it attracts a specific daily penalty.

According to Section 465(2)(g) of the Income Tax Act 2025, if a person fails to furnish a TDS certificate (as required under Section 395(4)) of Income Tax Act 2025, they are liable to pay a penalty of ₹ 500 for every day that the failure continues.

However, there is a maximum cap to protect deductors from unlimited liability:

• Maximum Cap (Section 465(3)(b) of Income Tax act A025): The total accumulated penalty for failing to issue the certificate shall not exceed the total amount of tax deductible or collectible.

(Note: This is distinct from the ₹ 200 per day late filing fee under Section 427 of Income Tax Act 2025, which specifically applies to the delay in filing the quarterly TDS statements/returns, not the issuance of the certificates themselves).

TDS Return Late Fees FY 2026-27

• If a deductor fails to file the TDS statement on time, a late filing fee is levied under Section 427 of Income Tax act 2025

Under Section 427 of the Income-tax Act, 2025, a late filing fee is specifically levied for defaults in furnishing Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) statements.

Here are the comprehensive key points regarding this late fee:

• Trigger for the Fee: The fee is automatically triggered when a person fails to deliver or cause to be delivered a TDS or TCS statement within the prescribed timeframe established under Section 397(3)(b).
• Daily Rate: The penalty is strictly calculated at a flat rate of ₹ 200 for every single day that the failure or delay continues.
• Maximum Cap: To prevent infinite accumulation, the total accrued fee is capped and shall not exceed the total amount of tax that was required to be deducted or collected for that specific statement.
• Prerequisite for Submission: The deductor or collector is mandatorily required to pay the calculated fee before delivering or submitting the delayed statement.
• Mandatory Form Disclosure: When filing the updated or delayed TDS/TCS return forms (such as the new Forms 138, 140, 143, and 144), the precise fee paid under Section 427 must be explicitly declared in a separate column labeled ‘Total Fee’.
• Departmental Processing: During the formal, centralized processing of TDS/TCS statements under Section 399, the Income-tax Department will systematically compute the fee under Section 427 and adjust it against any amounts already paid (via challan or book adjustment) before generating the final intimation of any outstanding demand or refund due.

Penalty for failure to file TDS return FY 2026-27

If you fail to file a TDS return (statement) within the prescribed time under Section 397(3)(b) of the Income-tax Act, 2025, you are liable for both a daily late filing fee and potentially a lump-sum penalty:

1. Late Filing Fee (Section 427 of Income tax Act 2025)

• A mandatory fee of ₹ 200 for every day the delay continues is automatically levied.
• The total accumulated fee is capped and shall not exceed the total amount of tax that was required to be deducted or collected.
• This fee must be paid before you are allowed to submit the delayed statement.

2. Penalty for Default (Section 461 of Income Tax Act 2025 )

• In addition to the daily fee, the Assessing Officer may impose a formal penalty ranging from a minimum of ₹ 10,000 up to a maximum of ₹ 1,00,000 for failing to file the statement on time or for furnishing incorrect information in the statement.
• How to avoid this penalty: This specific penalty will not be levied if you can prove that you have paid the deducted tax, along with any applicable late fees and interest, to the Central Government, and you furnish the delayed statement before the expiry of one month from its original prescribed due date.

3. Waiver for Reasonable Cause (Section 470 of Income Tax Act 2025)

• No penalty will be imposed for failing to file the statement if you can successfully prove to the authorities that there was a reasonable cause for the delay.

Disallowance of Expenses if Failed to Deduct TDS

Under the Income-tax Act, 2025, the disallowance of expenses for the failure to deduct or pay Tax Deducted at Source (TDS) is governed by Section 35  of Income Tax Act 2025 (which outlines “Amounts not deductible in certain circumstances”).

Here are the specific disallowance rules under this section:

1. Payments to Residents (Section 35(b)(i)) If you fail to deduct TDS on a sum payable to a resident, or if you deduct the tax but fail to pay it to the Central Government by the due date for filing your tax return (under Section 263(1)), 30% of the expenditure will be disallowed and added back to your taxable business/profession income.

2. Payments to Non-Residents or Outside India (Section 35(b)(ii)) If you fail to deduct or pay TDS on any interest, royalty, fees for technical services, or other chargeable sums payable outside India or to a non-resident, 100% of the expenditure will be disallowed if the tax is not paid by the return filing due date.

3. Salary Payments Outside India or to a Non-Resident (Section 35(c)) Any payment chargeable under the head “Salaries” that is payable outside India or to a non-resident will be completely disallowed if the required TDS has not been deducted or, after deduction, has not been paid.

Relief in Subsequent Years: The Act provides a mechanism for relief if you correct the default later. If the TDS is deducted in a subsequent year, or deducted in the current year but paid after the return filing due date, the previously disallowed sum (the 30% for residents or 100% for non-residents) will be allowed as a deduction in the tax year in which the TDS is actually paid.

TDS Payment Deadline to Avoid Expense Disallowance

• To successfully claim certain business expenses and avoid disallowances, any tax deducted at source must be paid to the credit of the Central Government on or before the due date specified for furnishing the return of income under Section 263(1).

Related Tax Deadlines Available in the Sources:  critical tax deadlines for the Tax Year 2026-27:

• Return of Income (ITR) Due Dates [Section 263(1) of Income Tax Act 2025]:
  • 31st July 2028: For general assessees who does not have business or profession Income
  • 31st August 2028 For general assessees who does have business or profession Income but not liable for Tax audit under Income tax
  • 31st October 2028: For companies and assessees whose accounts are required to be audited.
  • 30th November 2028 : For assessees required to furnish a transfer pricing report under section 172.
• Advance Tax Payment Due Dates:
  • 15th June: 15% of the advance tax due.
  • 15th September: 45% of the advance tax due.
  • 15th December: 75% of the advance tax due.
  • 15th March: 100% of the advance tax due.

Prosecution proceedings u/s 476 of Income Tax Act for default in TDS

Under the Income-tax Act, 2025, the prosecution proceedings for failing to deposit Tax Deducted at Source (TDS) to the credit of the Central Government are governed by Section 476 of Income Tax Act 2025.

Here are the comprehensive details regarding the prosecution proceedings:

1. Standard Punishment (Section 476) If a person fails to pay the tax deducted at source to the credit of the Central Government as required under Chapter XIX-B, they shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years, along with a fine.

2. Punishment for Subsequent Offences (Section 485) If a person who has already been convicted under Section 476 commits the offence again, the punishment becomes stricter. For a second or any subsequent offence, they shall be punishable with rigorous imprisonment for a term of not less than six months (extending up to seven years) and a fine.

3. Offences by Companies (Section 487) If the failure to deposit TDS is committed by a company, every person who was in charge of and responsible to the company for the conduct of its business at the time the offence was committed, as well as the company itself, shall be deemed guilty of the offence and liable to be proceeded against and punished.

4. Nature of the Offence (Section 492) The offence of failing to pay TDS under Section 476 is legally deemed to be a non-cognizable offence.

Exemptions and Defences: You can avoid these prosecution proceedings under specific circumstances outlined in the Act:

• Payment Before Statement Deadline (Section 476(2)): You will not face prosecution if you manage to deposit the deducted tax to the government on or before the prescribed due date for filing the respective quarterly TDS statement under Section 397(3)(b).
• Reasonable Cause (Section 486): No person shall be punishable for this failure if they can successfully prove to the authorities that there was a reasonable cause for the failure to deposit the tax.

Key Compliance Changes

Related Post

Section 398 Income Tax Act 2025 Consequences of failure to deduct or pay or, collect or pay.

Section 35 Income Tax Act 2025 Amounts not deductible in certain circumstances.

Section 263 Income Tax Act 2025 Return of income.

Section 395 Income Tax Act 2025 Certificates.

Section 397 Income Tax Act 2025 Compliance and reporting.

Section 427 Income Tax Act 2025 Fee for default in furnishing statements.

Section 470 Income Tax Act 2025 Penalty not to be imposed in certain cases.

Section 461 Income Tax Act 2025 Penalty for failure to furnish statements, etc.

Form 138 Income Tax Rules 2026 Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of salary paid to employee under section 392, or income of specified senior citizen under section 393(1) [Table: Sl. No. 8(iii)], for the quarter ended ……….. (June/September/December/March) ……. (Tax Year)]

Form 140 Income Tax Rules 2026 Quarterly statement of deduction of tax under section 397(3)(b) in respect of payments made other than salary for the quarter ended…………………………(June/September/December/March) ………………. (Tax Year)]

Form 141 Income Tax Rules 2026 pdf download (Earlier Form 26QB/26QC/26QD/26QD/26QR) New Income Tax Rules 2026

Form 144 Income Tax Rules 2026 Quarterly statement of deduction of tax under section 397(3)(b) in respect of payments other than salary made to non-residents for quarter ended…………………………June/September/December/March) ……………. (Tax Year)

Form 142 Income Tax Rules 2026 Quarterly statement of tax deposited in relation to transfer of virtual digital asset under section 393(1) [ Table: S. No. 8(vi)] to be furnished by an Exchange for the quarter ending ……. June/September/December/March of Tax Year

Form 143 Income Tax Rules 2026 Quarterly statement of collection of tax at source under section 397(3)(b) for the quarte ended………………………….. (June/September/December/March) ……………………….. (Tax Year)

Your Queries solved

TDS Return Filing due date FY 2026-27,

TDS payment due date FY 2026-27,

TDS return form FY 2026-27,

TDS Return Late Fees FY 2026-27,

Penalty for failure to file TDS return FY 2026-27