In this guide
This blog is a reference document-the kind of data sheet a CFO prints and keeps on their desk, an HR manager bookmarks for payroll processing, and a CA consults before filing every quarter. It compiles every threshold, rate, deadline, penalty calculation, and compliance benchmark for salary TDS in one place. For the filing process walkthrough, see our CA-assisted TDS filing guide . For businesses completing company registration , TDS obligations begin from the first salary payment.
TDS Thresholds for Salary (Section 192)
Salary TDS under Section 192 has no fixed threshold amount-TDS is deducted based on the employee’s estimated annual taxable income and applicable slab rates. The employer estimates annual income, applies deductions (old regime) or standard deduction only (new regime), computes tax, and divides by 12 for monthly TDS.
New Tax Regime Slabs (Default from FY 2024-25 onwards)
| Income Slab | Tax Rate |
|---|---|
| Up to Rs 4,00,000 | Nil |
| Rs 4,00,001 to Rs 8,00,000 | 5% |
| Rs 8,00,001 to Rs 12,00,000 | 10% |
| Rs 12,00,001 to Rs 16,00,000 | 15% |
| Rs 16,00,001 to Rs 20,00,000 | 20% |
| Rs 20,00,001 to Rs 24,00,000 | 25% |
| Above Rs 24,00,000 | 30% |
Old Tax Regime Slabs
| Income Slab | Tax Rate |
|---|---|
| Up to Rs 2,50,000 | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% |
| Rs 5,00,001 to Rs 10,00,000 | 20% |
| Above Rs 10,00,000 | 30% |
Complete Penalty and Interest Matrix
| Section | Violation | Penalty / Interest | Calculation Notes |
|---|---|---|---|
| 234E | Late filing of TDS return | Rs 200 per day until filed | Capped at total TDS amount for that return. Starts from day after due date. |
| 271H | Non-filing or incorrect filing | Rs 10,000 to Rs 1,00,000 | Penalty not levied if: TDS paid, return filed within 1 year of due date, and late fee/interest paid. |
| 201(1A) | Late deduction of TDS | 1% per month (part month = full month) | From date TDS was due to be deducted to date of actual deduction. |
| 201(1A) | Late deposit of TDS (after deduction) | 1.5% per month (part month = full month) | From date of deduction to date of actual deposit. This is the most common penalty. |
| 206AA | TDS without PAN of deductee | Minimum 20% TDS rate (or applicable rate, whichever is higher) | If employee hasn’t furnished PAN, deduct at 20% regardless of slab. Higher of 20% or applicable rate. |
| 40(a)(ia) | Non-deduction or non-deposit (non-salary) | 30% disallowance of expense | Applies to non-salary TDS (26Q). The expense is disallowed in the employer’s income computation. Not applicable to salary TDS directly. |
| 276B | Failure to pay TDS to government | Rigorous imprisonment: 3 months to 7 years + fine | Criminal prosecution for wilful default. Requires sanction from revenue authority. Used in serious cases. |
Late Fee Calculator: Section 234E Worked Examples
| Scenario | TDS Amount | Days Late | 234E Fee (Rs 200/day) | Capped At | Actual Fee |
|---|---|---|---|---|---|
| A | Rs 50,000 | 10 days | Rs 2,000 | Rs 50,000 | Rs 2,000 |
| B | Rs 50,000 | 100 days | Rs 20,000 | Rs 50,000 | Rs 20,000 |
| C | Rs 15,000 | 100 days | Rs 20,000 | Rs 15,000 | Rs 15,000 (capped) |
| D | Rs 2,00,000 | 30 days | Rs 6,000 | Rs 2,00,000 | Rs 6,000 |
| E | Rs 5,000 | 200 days | Rs 40,000 | Rs 5,000 | Rs 5,000 (capped) |
Key insight: For small TDS amounts (Rs 5,000-15,000), the cap kicks in quickly. For large TDS amounts (Rs 50,000+), the Rs 200/day accumulation can become significant before the cap applies. In all cases, the late fee is IN ADDITION to interest under Section 201(1A) and potential penalty under Section 271H. For businesses managing professional accounting services , late fee calculator scenarios help employers understand the real cost of missing deadlines.
The 2-Year Correction Window: Data and Deadlines
| Original FY | FY End Date | 2-Year Correction Deadline | Status as of 25 March 2026 |
|---|---|---|---|
| FY 2018-19 (Q4) | 31 March 2019 | 31 March 2021 | TIME-BARRED (transition relief until 31 March 2026) |
| FY 2019-20 | 31 March 2020 | 31 March 2022 | TIME-BARRED (transition relief until 31 March 2026) |
| FY 2020-21 | 31 March 2021 | 31 March 2023 | TIME-BARRED (transition relief until 31 March 2026) |
| FY 2021-22 | 31 March 2022 | 31 March 2024 | TIME-BARRED (transition relief until 31 March 2026) |
| FY 2022-23 | 31 March 2023 | 31 March 2025 | TIME-BARRED (transition relief until 31 March 2026) |
| FY 2023-24 (Q1-Q3) | 31 March 2024 | 31 March 2026 | LAST CHANCE: 6 days remaining as of 25 March 2026 |
| FY 2023-24 (Q4) | 31 March 2024 | 31 March 2026 | LAST CHANCE: 6 days remaining |
| FY 2024-25 | 31 March 2025 | 31 March 2027 | Open (within 2-year window) |
| FY 2025-26 | 31 March 2026 | 31 March 2028 | Current FY (returns being filed now) |
URGENT: If you have any pending TDS corrections for FY 2018-19 through FY 2023-24 (Q1-Q3), you have only 6 days remaining (as of 25 March 2026) to file them on TRACES. After 31 March 2026, TRACES will permanently reject these corrections. CBDT estimates approximately 2 million pending corrections are affected. For businesses using income tax return filing services, ensure your CA has verified all historical TDS data before this deadline.
Complete Filing Deadline Reference
| Obligation | Form / Portal | Deadline | Penalty for Missing |
|---|---|---|---|
| TDS deposit (monthly) | Challan ITNS 281, IT portal | 7th of following month (30 April for March) | 1.5%/month interest (Section 201(1A)) |
| Q1 return (Apr-Jun) | Form 24Q, TRACES/IT portal | 31 July | Rs 200/day (234E) + Rs 10K-1L (271H) |
| Q2 return (Jul-Sep) | Form 24Q | 31 October | Same |
| Q3 return (Oct-Dec) | Form 24Q | 31 January | Same |
| Q4 return (Jan-Mar) | Form 24Q (with Annexure II) | 31 May | Same + Form 16 cascade risk |
| Form 16 to employees | Generated from TRACES | 15 June | Rs 100/day per certificate per employee |
| Correction statement | TRACES portal | Within 2 years from FY end (from 1 April 2026) | Time-barred if missed. Mismatch becomes permanent. |
Compliance Benchmarks: What Good Looks Like
Based on our practice across hundreds of employers in Pune, Mumbai, Delhi, and Gurugram, here are the compliance benchmarks that distinguish error-free employers from penalty-prone ones:
| Benchmark | Compliant Employer | Non-Compliant Employer |
|---|---|---|
| TDS deposit timing | Deposited by 5th of month (2-day buffer before 7th deadline) | Deposited on 7th or later. Frequently triggers interest. |
| Form 24Q filing | Filed 7-10 days before quarterly deadline | Filed on deadline day or after. FVU errors discovered too late. |
| Challan reconciliation | Monthly. Every challan mapped to employees immediately. | Quarterly (at filing time). Mismatches discovered late. |
| PAN verification | All employee PANs verified against IT database at onboarding | PANs taken at face value. Mismatch discovered at Form 26AS stage. |
| Form 16 issuance | Issued by 10 June (5-day buffer before 15 June) | Issued late or not at all. Employee ITR filing delayed. |
| 26AS/AIS reconciliation | Done within 15 days of Q4 filing. Employee mismatches identified and corrected. | Never done. Mismatches discovered when employees receive IT notices. |
| Annual penalty cost | Rs 0 | Rs 20,000-85,000+ (accumulated late fees, interest, correction costs) |
For businesses using GST registration alongside TDS, the monthly compliance calendar should integrate TDS deposit (7th), GST GSTR-3B (20th), and EPF/ESI (15th) into a single tracking system.
Key Takeaways
TDS return filing under Form 24Q is governed by precise thresholds, automatic penalties, and strict deadlines. The new regime makes income up to Rs 12.75 lakh effectively tax-free for salaried employees. The penalty matrix is layered: Section 234E (Rs 200/day), Section 271H (Rs 10,000-1,00,000), Section 201(1A) (1-1.5%/month), and Section 206AA (20% minimum for no-PAN). These penalties are cumulative-a single quarter’s non-compliance can generate Rs 20,000-85,000 in combined fees, interest, and penalties.
The 2-year correction window effective 1 April 2026 is the most consequential procedural change. Corrections for FY 2018-19 through FY 2023-24 must be filed by 31 March 2026-after which TRACES permanently rejects them. The benchmarks from compliant employers are clear: deposit by 5th (not 7th), file 7-10 days early, reconcile monthly (not quarterly), verify PANs at onboarding, issue Form 16 by 10 June, and reconcile 26AS within 15 days.
This data report is designed to be printed, bookmarked, and consulted every quarter. The numbers don’t change mid-year (except for budget amendments), but the deadlines arrive every 3 months with zero tolerance for delay. For businesses using tax audit services , the Form 3CD now requires verification of TDS compliance-making these benchmarks audit-relevant as well.
Get the Numbers Right Every Quarter
TDS compliance is a numbers game with zero tolerance for error. Every threshold, rate, and deadline in this report is fixed by law-the only variable is whether your filing is on time and accurate. Professional CA-assisted filing turns this data into action: correct computation, timely deposit, error-free returns, and proactive correction management.
Explore our professional accounting services for TDS return filing, Form 16 generation, correction management, and 26AS reconciliation across all four offices: Pune, Mumbai, Delhi, and Gurugram.
For queries, reach out at +91 945 945 6700 or WhatsApp us directly.
Common Questions
Frequently Asked Questions
Have a look at the answers to the most asked questions.
