TDS & TCS
Compliance.
Managing tax deducted and collected at source is crucial for businesses to stay compliant. Non-compliance is expensive in a quiet way — interest, late fees, disallowed expenditure and blocked credit for your vendors.
Overview
TDS defaults rarely announce themselves. They accumulate through wrong sections, missed thresholds and PAN errors, and surface later as a demand on the TRACES portal together with a disallowance in your own assessment.
We set up the deduction matrix for your business, run the quarterly cycle — payment, return, certificate — and reconcile it against your books and Form 26AS so that mismatches are caught in the same quarter they occur.
Where defaults already exist, we work backwards: identify the cause, file corrections, and close the demand rather than leaving it to compound.
What we handle
Scope of work.
Deduction & deposit
- Payment-code deduction matrix under sections 392, 393 and 394
- Rate determination including PAN-inoperative cases
- Monthly challan preparation and deposit
- TCS on sale of goods and specified transactions
- Interplay between purchase-of-goods TDS and TCS on sale of goods
- Non-resident payments under section 393(2), formerly section 195
Returns & certificates
- Quarterly returns — Forms 138, 140, 143 and 144 under the Act of 2025
- Salary and non-salary TDS certificates, including Form 131
- Correction statements and revisions
- PAN validation and vendor data clean-up
- Lower or nil deduction certificate applications
- TRACES account and profile management
Reconciliation & defaults
- Books to challan to return reconciliation
- Form 26AS and AIS matching
- Short deduction and short payment resolution
- Late fee and interest computation review
- Response to TRACES default notices
- Annual TDS health check
Common questions
Answers before you ask.
What changed when the Income-tax Act, 2025 came in?
The structure, not the arithmetic. From 1 April 2026 the forty-odd TDS sections of the 1961 Act are consolidated into section 392 for salary, section 393 for everything else and section 394 for TCS. Rates and thresholds carried over unchanged. What bites in practice is that challans and returns now identify a payment by a four-digit code rather than a section number, and the return forms were renumbered — 24Q, 26Q, 27EQ and 27Q became Forms 138, 140, 143 and 144. Filing against an old section number now makes the return defective, and the correction cycle is where the time goes. Which Act applies is decided by the earlier of credit or payment: on or before 31 March 2026 the old Act still governs.
What does a short deduction default actually cost?
Interest runs from the date the tax was deductible until it is deposited, a late filing fee applies for every day a return is delayed, and the corresponding expenditure can be disallowed in your income tax assessment. The combined cost regularly exceeds the tax that was short-deducted.
Do I need to deduct TDS on payments to a small vendor?
It depends on the section, the annual threshold for that vendor and the vendor's status. Thresholds are per-payee and per-year, so a series of small bills can cross the limit even when no single bill does. We build the matrix once and the rest becomes routine.
Can I apply for a lower deduction certificate?
Yes, where the tax deductible at the normal rate would exceed your likely liability. The application is made to the assessing officer with supporting computations, and is worth considering for contractors and professionals whose margins are thin relative to gross receipts.
Next step
Tell us what you need.
A partner will review your requirement and respond within one working day.