Direct and Indirect Taxation · Tax Deducted at Source and Tax Collected at Source

TDS Deposit, Returns, Certificates and TAN Explained

Updated 10 October 2026 · Fact-checked

After deducting or collecting tax, you must deposit it with the Central Government by the prescribed date, file a quarterly statement, and issue a certificate to the deductee or collectee. You quote your TAN on all of these. To solve questions, identify the payer, the month of deduction and the quarter, then apply the dates.

Understand Deposit, Returns, Certificates and TAN

TDS and TCS only work if the tax reaches the government and the person whose tax it is can claim credit. Three steps follow every deduction or collection: deposit the tax, report it, and certify it. Each step has a time limit.

Deposit. The tax you deduct belongs to the government. You pay it through a challan by the prescribed date. The usual date for a non-government deductor is the 7th of the next month. The exception is tax deducted in March, which is due by 30 April. A few payments, such as those on purchase of immovable property, have a 30-day-after-month-end deposit date. The exact dates are set by rules, so learn them from your ICMAI material.

Statement (TDS or TCS return). Every quarter you report who was paid, how much, and what tax was deducted or collected. This is filed within the due date fixed by the rules. The Act refers to these statements in section 397(3). The government uses them to put the deductee's credit in their account.

Certificate. Section 395(4) says every person deducting or collecting tax must issue a certificate to the deductee or collectee. It shows the amount of tax, the rate and other prescribed particulars, within the prescribed period. An employer paying salary issues a certificate to the employee showing tax paid to the Central Government. Under the 1961-Act pattern these were Form 16 (salary) and Form 16A (other payments). The Income-tax Rules under the 2025 Act may renumber forms, so focus on what each certificate does and when it is due.

TAN. The Tax Deduction and Collection Account Number is a 10-character alphanumeric number (four letters, five digits, one letter). A person who deducts or collects tax obtains it and quotes it in challans, statements and certificates. TAN belongs to the deductor or collector. PAN is the number of the person whose income is taxed.

Key rules to remember

Deposit date: ordinary case: Tax deducted in a month → deposit by 7th of the next month; For non-government deductors. Tax deducted in March is deposited by 30 April. Some specified payments have a 30th-of-next-month date. Check the rules for each.
Quarterly statement due dates: Q1 (Apr–Jun): 31 July | Q2 (Jul–Sep): 31 October | Q3 (Oct–Dec): 31 January | Q4 (Jan–Mar): 31 May; Same quarters apply to TDS and TCS statements. These are the dates ICMAI-style questions use. Confirm against the current rules.
Certificate time limit (non-salary TDS and TCS): Due date = 15 days from the due date of the quarterly statement; Section 395(4)(a) says 'within such period as may be prescribed'. The 15-day period comes from the rules.
Salary certificate: Employer issues annual certificate by 15 June after the end of the tax year; Section 395(4)(b) covers employer certificates. The period is as prescribed.
Penalty for failure to furnish certificate or statement: ₹500 per day of default, limited to the tax deductible or collectible; Section 465(2)(g) and (k). Section 465(3) caps the penalty at the amount of tax deductible or collectible for failures under section 395(4) certificates and section 397(3)(b) or (e) statements.
TAN format: 4 letters + 5 digits + 1 letter (10 characters); Quoted in challans, statements and certificates.
Lower or nil deduction certificate: Payee applies; Assessing Officer issues certificate; payer deducts at that rate or nothing till validity; Section 395(1). Sub-section (6) allows the application to be filed before the prescribed authority, who may issue or reject it after electronic verification. Section 395(5) lets the Assessing Officer cancel a certificate after giving a reasonable opportunity.

How to solve Deposit, Returns, Certificates and TAN questions

Use this order for any question on deposit, returns, certificates or TAN.

1Identify who is acting: a deductor or collector of tax, or a payee asking for something. TDS and TCS are treated alike here.
2Find the date of deduction or collection, and the month and quarter it falls in.
3Apply the deposit date: 7th of the next month, 30 April for March, or the special date if the payment is a specified one.
4Find the quarterly statement due date from the quarter, then add 15 days for the non-salary certificate. For salary, the certificate is due by 15 June.
5If there is a delay, count the days of default and apply ₹500 per day. Then compare with the tax deducted or collected and take the lower amount.
6If the question is about a lower or nil rate, check that the payee applied and has a valid certificate, and that the payer follows its rate.
7State TAN and PAN roles. TAN is the deductor's number. PAN is the deductee's number.
8Write the conclusion in one line with the date or amount.

Quickest way: Date ladder and penalty cap

When to use it: Use for numerical questions asking 'by what date' or 'what penalty'.

Write the month of deduction. Next to it write 7th of next month (30 April if March).
Write the quarter and its statement date: 31 Jul, 31 Oct, 31 Jan, 31 May.
Add 15 days for the certificate. Salary: 15 June.
If late, compute days × ₹500.
Compare with tax deductible or collectible. Pick the lower figure.

Common mistakes in Deposit, Returns, Certificates and TAN

Giving 31 March or 7 April as the deposit date for tax deducted in March.
Students apply the ordinary 7th-of-next-month rule to every month.
Fix: Remember the March exception: 30 April for non-government deductors. Write it on your date ladder.
Using 31 March as the Q4 statement date.
Students confuse the quarter end with the filing date.
Fix: Quarter end is not the due date. Q4 is due 31 May. The other three are 31 July, 31 October and 31 January.
Counting the 15 days for the certificate from the end of the quarter.
The words 'within 15 days' are remembered without the starting point.
Fix: Count from the due date of the statement, not from the quarter end or the date the statement was filed.
Charging ₹500 per day without applying the cap.
Students forget section 465(3).
Fix: For certificate and statement failures, the penalty cannot exceed the tax deductible or collectible. Always compare.
Saying the deductee must obtain TAN.
TAN and PAN are confused.
Fix: The deductor or collector obtains TAN. The deductee quotes PAN.
Treating a lower deduction certificate as automatic.
Students forget the application and the Assessing Officer's satisfaction.
Fix: The payee must apply. The certificate is issued only if the total income justifies it. The payer follows the rate in the certificate till validity.

Worked examples

Example 1

A company (non-government deductor) deducted tax from a contractor's bill on 12 August 2026 and from another payment on 20 March 2027. By which dates must each deduction be deposited? Which quarterly statements cover them and when are these due?

Show the solution

Deduction on 12 August 2026 falls in August. Deposit by the 7th of the next month: 7 September 2026.
August falls in Q2 (July to September). The Q2 statement is due on 31 October 2026.
Deduction on 20 March 2027 falls in March. The March exception applies: deposit by 30 April 2027.
March falls in Q4 (January to March). The Q4 statement is due on 31 May 2027.

Answer: 12 August 2026 deduction: deposit by 7 September 2026, reported in the Q2 statement due 31 October 2026. 20 March 2027 deduction: deposit by 30 April 2027, reported in the Q4 statement due 31 May 2027.

Example 2

Mehta Traders deducted tax of ₹6,000 in December 2026 on a non-salary payment. It filed the Q3 statement on time. The certificate to the deductee was issued on 7 March 2027. Compute the penalty for the delay in issuing the certificate. Assume a non-leap year.

Show the solution

December falls in Q3 (October to December). The Q3 statement is due on 31 January 2027.
The certificate is due 15 days after that: 15 February 2027.
Days of default: 16 to 28 February is 13 days. Add 1 to 7 March, which is 7 days. Total 20 days.
Penalty at ₹500 per day under section 465(2)(g): 20 × ₹500 = ₹10,000.
Section 465(3)(b) caps it at the tax deductible or collectible, which is ₹6,000.
Take the lower of ₹10,000 and ₹6,000.

Answer: The penalty is ₹6,000. The uncapped figure of ₹10,000 exceeds the tax of ₹6,000, so the cap in section 465(3) applies.

Exam tips

Memorise one date ladder: 7th of next month, 30 April for March, and the four quarterly dates. Most MCQs only test these.
In descriptive answers, name the three duties in order: deposit, statement, certificate. Add TAN quoting as a fourth point. This gives you a clean structure.
Quote section 395(4) for certificates, section 395(1) for lower deduction and section 465 for the penalty. These numbers are in the official text, so you can use them with confidence.
In penalty sums, show the days, the ₹500 multiplication, the cap and the final answer in separate lines. Step marks depend on it.
If a question uses form numbers, write the function as well, for example 'certificate of tax deducted on salary'. This protects you if the form numbers have changed.

Practice questions from Tax Deducted at Source and Tax Collected at Source

Deposit, Returns, Certificates and TAN in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Deposit, Returns, Certificates and TAN: frequently asked questions

What is the due date for depositing TDS?

For non-government deductors the tax is deposited by the 7th of the month following the month of deduction. Tax deducted in March is deposited by 30 April. A few specified payments have a 30th-of-next-month date. Check the rules for the payment in your question.

What are the quarterly TDS return due dates?

Q1 (April to June) is due 31 July. Q2 (July to September) is due 31 October. Q3 (October to December) is due 31 January. Q4 (January to March) is due 31 May.

What is TAN and who must obtain it?

TAN is the 10-character Tax Deduction and Collection Account Number. A person who deducts or collects tax must obtain it and quote it in challans, statements and certificates. It is different from PAN, which belongs to the person whose income is taxed.

When must a TDS or TCS certificate be issued?

Section 395(4) requires every person who deducts or collects tax to issue a certificate within the prescribed period. For non-salary TDS and for TCS, this is 15 days from the due date of the quarterly statement. For salary, the employer's certificate is due by 15 June after the tax year.

What is the penalty for not issuing the certificate on time?

Section 465(2) provides a penalty of ₹500 for every day the failure continues. Under section 465(3), it cannot exceed the tax deductible or collectible. The Joint Director or Joint Commissioner imposes it in the usual case.