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Form 26Q: TDS Return filing for Non-Salary Deductions

Updated on: 23 May, 2024 03:01 PM

Most people are scared when it comes to filing income taxes. This is purely due to a lack of information and nothing else. Knowledge is only one of the things stopping most citizens from managing tax-related topics like filing TDS returns. If acquainted with a few rules, terms, and regulations, dealing with matters related to income tax becomes very easy.

One such keyword is Form 26Q. Every person is aware that TDS is deducted from the salary income. But the reality is that TDS is for more than just that purpose. Tax deducted at source is for all the income earned by an individual Like any other form of payment, when a payment other than salary is made to an individual or a company, TDS is deducted by the payer before crediting the payment amount.

While filing TDS returns, Form 26Q is submitted for all the payments made to the payee besides the salary. This payment is strictly for Indian citizens. The form 26Q is not for payments made to any individual or entity, not an Indian resident.

What is Form 26Q?

A taxpayer pays taxes on every kind of income. Form 26Q is a type of TDS (Tax Deducted at Source) return form used in India. It is specifically used for reporting TDS deductions made on payments other than salaries. Form 26Q is filed by the deductor, who is the person responsible for deducting TDS, to provide information about the TDS deductions made from various payments made to residents. The primary purpose of Form 26Q is to report TDS deductions on payments such as rent, professional fees, commission, interest, and other non-salary payments made to residents.


Sections under Form 26Q

Under Section 200(3) of the Income Tax Act, 1961, Form 26Q is applicable for the tax deducted at source for all payments except salary and payment to non -resident. The sections under this law provide the details of when TDS is applicable and the amount limit under which it is not applicable.

Section 192 – Tax is not deducted at source from salaries

Limit: The net income or the taxable income is below the taxable limit of 2.5 lakhs for individuals, 3 lakhs for citizens above 60 years, and 5 lakhs for citizens above 80 years.


Section 192A – Tax is not deducted at source from an employee’s Provident Fund

Limit: The paid amount is below Rs. 50000


Section 193 – Tds not deducted when interest on debenture recieved from public limited company by indvidual and huf through account payee cheque.

Limit: The amount should be lower than Rs. 5000.


Section 193 - No tax is deducted at source from the interest earned on 8% savings bonds 2003, which are taxable.

Limit: The amount, paid or to be paid, does not exceed Rs. 10,000.


Section 194 – No TDS is deducted if the dividend paid to a resident is through the a/c payee cheque.

Limit: The amount of the dividend should be lower than Rs. 5000


Section 194A – No TDS is deducted on the interest rewarded by a bank or co - operative society and post office. The interest paid should be on other than securities.

Limit: The amount of interest does not exceed Rs. 40000(Rs 50000 in case of senior citizen)


Section 194A – No TDS is deducted on interest earned on anything except securities

Limit: The amount of interest should be lower than Rs. 5000


Section 194A – No TDS is deducted on the interest awarded by Motor Accident Claims Tribunal

Limit: The amount of interest paid or to be paid should be lower than Rs. 50,000


Section 194B – No tax is deducted at source on the winnings of a crossword puzzle or a lottery

Limit: The amount earned does not exceed ten thousand rupees.


Section 194BB – Tax is not deducted at source on the winnings of a horse race

Limit: The amount earned does not exceed Rs. 10,000


Section 194C – No TDS is deducted on the amount paid or payable in this financial year to a contractor

Limit: The amount already paid or to be paid in a single payment does not exceed Rs. 30,000. The amount paid or to be paid to the contractor does not exceed Rs. 1,00,000 in aggregation.


Section 194D – No tax is deducted at source on the commission on insurance paid during the fiscal year

Limit: The amount has to be does not exceed Rs. 15,000


Section 194DA – No tax is deducted at source on the amount payable to the individual under the life insurance policy. It includes a bonus too.

Limit: The amount payable should be below Rs. 1,00,000


Section 194EE – No TDS is deducted on the payments made under NSS deposits

Limit: The amount should be below Rs. 2500


Section 194G – No tax is deducted at source on the commission earned from lottery tickets

Limit: The amount of commission earned does not exceed Rs. 15,000


Section 194H – No tax is deducted at source on the commission or brokerage earned.

Limit: The amount earned does not exceed Rs. 15,000. Also, no TDS is to be subtracted from the commission paid to the PCO franchisee by MTNL / BSNL.


Section 194-I – No tax is deducted at source on the rent paid on furniture and fittings, machinery and plant, land, and buildings.

Limit: The amount of rent paid during the fiscal year should be lower than Rs. 240000


Section 194-IA – No TDS is deducted on the amount to be paid for consideration for the acquisition of immovable property. The rule does not apply to agricultural land.

Limit: The amount of interest paid or to be paid should be lower than Rs. 5000000


Section 194-IB – No tax is deducted at source on the rent paid by an individual or HUF to an individual for building, land, or both. The books of both parties should not be required for audit below section 44AB.

Limit: The amount of rent to be paid per month or a part of a month should be below Rs. 50,000


Section 194J – No TDS on payment of technical fees, professional fees, royalty, or remuneration to the director.

Limit: The amount paid or to be paid does not exceed Rs. 30,000


Section 194LA – No tax is deducted at source on the payment of reimbursement made for compulsory procurement of land other than agricultural land.

Limit: The amount paid or to be paid in the fiscal year should be less than Rs. 2,50,000


Section 206A – No tax is deducted at source if the interest is paid on a quarterly return to the individual. Interest on securities is not included.

Limit: The amount of interest paid or to be paid is less than Rs. 10,000, where the payer is a bank or a cooperative society. The limit becomes Rs. 5000 in any other case.



Details to be filled in the form 26Q

Form 26Q only contains one annexure where the details are to be filled. These details are as follows:

Challan details

  1. The serial number of the challan
  2. TDS amount
  3. Surcharge amount
  4. BSR Code
  5. Education cess amount
  6. Amount of interest
  7. The total tax deposit
  8. The number of demand drafts or the cheque (if applicable)
  9. The collection code
  10. The tax deposit date
  11. Method of TDS deposition

Payer Details

  1. Name
  2. Address
  3. PAN Number
  4. Contact details

Payee Details

  1. Name of the payee
  2. Email ID
  3. Full Address
  4. Contact number
  5. PAN Number
  6. Telephone number

The deductor also has to mention the reason for not deducting TDS or deducting it in a lowercase, whichever is applicable.


Due Date of Filing the Form 26Q

All taxpayers are supposed to file the TDS return with form 26Q promptly and regularly. The form 26Q is filed quarterly, and the last dates for doing that are as follows:

  • Quarter 1 31st July
  • Quarter 2 31st Oct
  • Quarter 3 31st Jan
  • Quarter 4 31st May

While making the payment, the payer must deduct the TDS amount according to the applicable rate. This deducted amount should be deposited to the credit of the government exchequer through the challan ITNS 281 on time. It can also be filed online on the website of TIN. If the deduction and deposition process is not done on time, the penalty is levied, as mentioned below.

Also, if the TDS is deducted at a lower rate, then the payee needs to get a lower deduction certificate as per section 197 of the Income Tax Act, 1961. Suppose the payee obtains the certificate of lower deduction. In that case, the TDS is deducted according to the rate mentioned in the certificate, which will be reflected in the filing of the TDS via Form 26Q.

Late filing fees

If Form 26Q is not filed according to the due dates mentioned above, the taxpayer is liable to pay some penalties depending on the amount and how late the returns are filed. According to Section 234E, if form 26Q is not filed by the due date, a late filing fee of Rs. 200 per day is charged until the penalty becomes equal to the TDS amount.

Non-filing penalty

Similarly, if Form 26Q is not filed with in one year from due date and wrong filed then the penalty for such failure is minimun Rs. 10,000 but not more then Rs. 1,00,000 according to section 271H.

If the following conditions are met, no penalty will be levied under section 271H:

  • The TDS is deposited to the government.
  • The interest and penalty for late filing have also been deposited.
  • The return has been filed before completion of 1 year from the due date.

Interest charged on late deduction and deposition

On top of that, the government may also charge interest for non-deduction and non-deposition of TDS returns. If the TDS is not deducted on time, then an interest of 1% per month or part of month is charged on the days spent between the due date of deduction and the actual date of the TDS deduction.

If the TDS is not deposited on time, then an interest of 1.5% per month or part of month is levied on the period spent between the actual date of deduction and the actual date of deposition.


Preparing the form 26Q

Form 26Q and the TDS return can be prepared and filed using NSDL e-Gov eTDS/TCS Return Preparation Utility (RPU). The RPU can be downloaded from the website of TIN free of cost. The return has to be submitted to any of the TIN-FCs established by NSDL e-Gov. after filing the return, its status can be checked on the website by putting in the token number or the provisional receipt number, and the TAN on the NSDL website.


How to download form 26Q?

To download the form 26Q, follow the given steps:

  • Go to the official NSDL website - https://www.tin-nsdl.com/
  • Click on the downloads tab, and from the menu, choose E-TDS/E-TCS.
  • On this page, click ‘quarterly returns’ and then select 'regular.'
  • Once you do that, you will be transferred to a new web page.
  • This page will contain a section ‘form’ under which there will be form 26Q. Click on that.

Points to remember

While filing TDS returns through form 26Q, always remember to verify the PAN number, all the challans, and their respective challan numbers, and also try to match these challans with the OLTAS or NSDL. One more point to verify is Form 27A. While filing the TDS return, along with form 26Q, you should also have form 27A.


Revision of the form 26Q

If a mistake or discrepancy is noticed in the form after submitting the TDS returns, the deductor can file a correction statement. Of course, this process is not free. The deductor will need to pay charges for filing a Revised Return. But there is no limit to filing the correction form. The deductor can submit multiple Revised Returns.

Many changes can be incorporated easily on the already filed TDs returns, but avoiding those is better. The charges levied every time are an important reason why all the details should be checked for mistakes before you hit the submit button.


Frequently Asked Questions

Q- How can I map multiple deduction entries with challan?

You can map multiple entries with one challan by enabling the option of “ allowing linking deduction and challan of multiple sections.” in TDS general settings.


Q- Can I move the deduction entry from quarter 1 and quarter 2 ?

Yes, you can move, but you must file a revised return for quarter 1 before filing the return for quarter 2.


Q- I have generated a return and have yet to save the return. Can I re-generate the return?

Yes, you are allowed for the re-generation of returns.


Q- How can I add challan?

You can add a new challan by filing a request for correction in traces and filing the required information to file a correction statement. Then, in a type of correction, selection challan correction, add challan.


Q- How can I remove the deduction entries mapped with challan?

You can remove it by selecting the challan details and then selecting the deductee which needs to be removed. After selecting, an option appears: remove deductee.


Q- Is it possible to change a section for a particular challan?

Yes, you can change the section of a challan by clicking on challan correction, then selecting the concerned challan, and you can edit it in the edit option.


Q- Can I add challan for all quarters (Q1, Q2, and Q3)?

Yes, you can add for all the quarters,


Q- Can I move the Challan entries from Q1 to Q3?

No, you cannot move, but you delete entries from one quarter by filing the revised return and then add it in the other quarter by doing the same.


Q- Can I import challan through Excel sheet?

Yes, you can import.


Q- Can I move the deduction entries from 1 challan to another?

Yes, you can move challan entries to another challan by selecting challan entries and selecting the option of move deductee in traces.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.