{"id":7459,"date":"2026-09-08T12:27:42","date_gmt":"2026-09-08T06:57:42","guid":{"rendered":"https:\/\/www.cac.net.in\/blog\/?p=7459"},"modified":"2026-09-25T12:54:01","modified_gmt":"2026-09-25T07:24:01","slug":"tds-compliance-avoid-common-errors-stay-filing-ready","status":"publish","type":"post","link":"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/","title":{"rendered":"TDS Compliance: Avoid Common Errors &#038; Stay Filing-Ready"},"content":{"rendered":"<p>Tax Deducted at Source (TDS) is an important component of a business&#8217;s income-tax compliance framework. Under the TDS mechanism, a person making a specified payment is required to deduct tax and deposit it with the government on behalf of the recipient.<\/p>\n<p>TDS obligations may arise on payments such as salary, interest, commission, brokerage, professional fees, contractual payments, rent, purchase of immovable property and payments to non-residents.<\/p>\n<p>TDS compliance does not end with deducting and depositing tax. It also includes selecting the correct TDS section, applying the appropriate rate, filing quarterly statements, issuing certificates and reconciling the information with books of account and government records. Errors can lead to interest, late filing fees, penalties, incorrect tax credits and disallowance of expenses.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#What_TDS_Compliance_Includes\" >What TDS Compliance Includes<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Identify_Payments_Liable_to_TDS\" >Identify Payments Liable to TDS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Select_the_Correct_TDS_Section\" >Select the Correct TDS Section<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Verify_PAN_Residential_Status_and_Deductee_Details\" >Verify PAN, Residential Status and Deductee Details<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Determine_the_Correct_Time_of_Deduction\" >Determine the Correct Time of Deduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Deposit_TDS_Within_the_Applicable_Timeline\" >Deposit TDS Within the Applicable Timeline<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Maintain_an_Accurate_Deductee_Master\" >Maintain an Accurate Deductee Master<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Reconcile_TDS_With_Expense_Ledgers\" >Reconcile TDS With Expense Ledgers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Review_Salary_TDS_Separately\" >Review Salary TDS Separately<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Check_Vendor_and_Professional_Payments\" >Check Vendor and Professional Payments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Handle_Non-Resident_Payments_Carefully\" >Handle Non-Resident Payments Carefully<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#File_the_Correct_Quarterly_TDS_Statement\" >File the Correct Quarterly TDS Statement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Reconcile_With_Form_26AS_and_TRACES\" >Reconcile With Form 26AS and TRACES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#File_Correction_Statements_Promptly\" >File Correction Statements Promptly<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Issue_TDS_Certificates\" >Issue TDS Certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Monitor_Lower_or_Nil_Deduction_Certificates\" >Monitor Lower or Nil Deduction Certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Review_Year_End_Provisions\" >Review Year End Provisions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Understand_the_Consequences_of_Non-Compliance\" >Understand the Consequences of Non-Compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Common_TDS_Compliance_Errors\" >Common TDS Compliance Errors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Practical_TDS_Compliance_Checklist\" >Practical TDS Compliance Checklist<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.cac.net.in\/blog\/tds-compliance-avoid-common-errors-stay-filing-ready\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_TDS_Compliance_Includes\"><\/span><strong><b>What TDS Compliance Includes<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A complete TDS process covers identifying liable payments, verification of the deductee&#8217;s status and PAN, selection of the correct section and rate, timely deduction and deposit, quarterly reporting, certificate issuance, reconciliation and correction of errors.<\/p>\n<p>Every stage is connected. An incorrect PAN in the deductee master, for example, may result in a higher deduction rate, an incorrect statement and the non-availability of tax credit to the recipient.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Identify_Payments_Liable_to_TDS\"><\/span><strong><b>Identify Payments Liable to TDS<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The first step is to identify all payments and transactions that may attract TDS. Businesses should not rely only on the description in an invoice or accounting ledger. The actual nature of the payment should be examined.<\/p>\n<p>Common areas include salaries, contractor payments, professional and technical fees, rent, commission, interest, directors&#8217; remuneration, property purchases, non-resident payments, e-commerce payments and specified business benefits or perquisites. Periodic ledger reviews help identify taxable transactions before quarterly filing.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Select_the_Correct_TDS_Section\"><\/span><strong><b>Select the Correct TDS Section<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Different types of payments are covered by different provisions. Classification should consider the nature of services, agreement terms, relationship between the parties, residential status, goods and service components, and whether a specific provision overrides a general one.<\/p>\n<p>The agreement, scope of work and invoice should be examined together. The basis for selecting a section should be documented where professional judgement is involved.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Verify_PAN_Residential_Status_and_Deductee_Details\"><\/span><strong><b>Verify PAN, Residential Status and Deductee Details<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Before processing payment, verify the deductee&#8217;s legal name, PAN, address, entity type, residential status, bank information and relevant declarations or certificates. For non-residents, obtain appropriate tax residency and treaty documents.<\/p>\n<p>Where a valid PAN is not furnished, tax may be deducted at a higher rate, subject to applicable law. PAN verification is best completed during vendor onboarding instead of during return preparation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Determine_the_Correct_Time_of_Deduction\"><\/span><strong><b>Determine the Correct Time of Deduction<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For many payments, TDS is required at the earlier of credit to the recipient&#8217;s account or actual payment. Postponing payment therefore does not necessarily postpone the TDS obligation.<\/p>\n<p>Review amounts credited to suspense, provision and payable accounts. Where a recipient and amount are identifiable, year-end provisions may trigger TDS even when an invoice has not been paid.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Deposit_TDS_Within_the_Applicable_Timeline\"><\/span><strong><b>Deposit TDS Within the Applicable Timeline<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After deduction, tax must be deposited within the prescribed time. Verify the TAN, assessment year, nature of payment, section or payment code, tax, surcharge, cess, interest and challan details.<\/p>\n<p>A payment under the wrong TAN, assessment year or code may not match the statement even though the amount reached the government. Preserve the challan receipt immediately after payment.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Maintain_an_Accurate_Deductee_Master\"><\/span><strong><b>Maintain an Accurate Deductee Master<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The master should include the deductee name, PAN, residential status, entity type, applicable section, normal rate, lower or nil deduction certificate details, validity period and contact information.<\/p>\n<p>Changes should be controlled and approved. An expired certificate or incorrect status can affect several transactions before detection.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reconcile_TDS_With_Expense_Ledgers\"><\/span><strong><b>Reconcile TDS With Expense Ledgers<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>TDS statements should be reconciled with relevant expense and payment ledgers, not prepared solely from the tax payable ledger. Compare total expense, amount liable to TDS, exemptions or thresholds, amount deducted, rate, deposit and amount reported.<\/p>\n<p>Review salary, professional fees, legal fees, consultancy, contracts, repairs, rent, commission, interest, directors&#8217; remuneration, software, subscriptions and marketing. Give additional attention to manual journals, round-sum entries and provisions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Review_Salary_TDS_Separately\"><\/span><strong><b>Review Salary TDS Separately<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Salary TDS requires a structured payroll process covering salary components, perquisites, bonus, previous-employer income, deductions, exemptions, retirement benefits and the tax regime selected by the employee.<\/p>\n<p>Employee declarations should be supported where required. Payroll records should be reconciled with salary expense, bank payments and quarterly salary statements.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Check_Vendor_and_Professional_Payments\"><\/span><strong><b>Check Vendor and Professional Payments<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For major vendors, examine the agreement, purchase order, scope, invoice, material and service components, reimbursement terms, GST treatment and residential status.<\/p>\n<p>Reimbursements should not automatically be treated as outside TDS. Their treatment depends on contractual terms, supporting evidence and applicable provisions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Handle_Non-Resident_Payments_Carefully\"><\/span><strong><b>Handle Non-Resident Payments Carefully<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Payments to non-residents may require analysis of domestic law, tax treaties, beneficial ownership, permanent establishment, Tax Residency Certificate, Form 10F, grossing-up clauses, withholding rate, Form 15CA and Form 15CB requirements.<\/p>\n<p>The rate should not be selected only from the invoice. Review the agreement, nature of service, location of performance and treaty position. Professional advice may be appropriate for royalty, technical services, software, interest and other cross-border payments.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"File_the_Correct_Quarterly_TDS_Statement\"><\/span><strong><b>File the Correct Quarterly TDS Statement<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For transactions governed by the applicable provisions of the Income-tax Act, 1961, common TDS statements include Form 24Q for salary, Form 26Q for specified payments to residents and Form 27Q for payments to non-residents. Form 27EQ relates to Tax Collected at Source (TCS), not TDS. For transactions covered by the Income-tax Act, 2025, the applicable new forms and reporting requirements should be followed.<\/p>\n<p>Before filing, verify deductor information, PAN, TAN, challans, payment and deduction dates, section, rate, tax amount and reasons for lower or non-deduction. A validation utility may identify technical errors but not every omission or incorrect legal classification.<\/p>\n<p><strong><b>Match Challans with Deductee Records<\/b><\/strong><\/p>\n<p>Each challan must be correctly allocated to deductee transactions. Check the bank code, challan serial number, deposit date, quarter, tax and interest components, available balance and TAN.<\/p>\n<p>Where one challan covers several deductees, the amount allocated must not exceed the available balance.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reconcile_With_Form_26AS_and_TRACES\"><\/span><strong><b>Reconcile With Form 26AS and TRACES<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After filing, review statement processing, default summaries, short deduction, short payment, interest, late filing fee, invalid PAN records, unmatched transactions and outstanding demand.<\/p>\n<p>If a deductee reports missing credit, check the PAN, challan match, processing status, reporting quarter and whether the payment was omitted.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"File_Correction_Statements_Promptly\"><\/span><strong><b>File Correction Statements Promptly<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Eligible errors may be corrected through a correction statement. Corrections can cover PAN, amounts, section, challan details, dates, omitted entries and deductor information.<\/p>\n<p>Maintain the original acknowledgement, reason for correction, revised data and correction acknowledgement. Do not wait for a recipient complaint before examining default reports.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Issue_TDS_Certificates\"><\/span><strong><b>Issue TDS Certificates<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Common certificates include Form 16 for salary, Form 16A for non-salary payments, Form 16B for property purchases, Form 16C for specified rent and Form 16D for certain contractual or professional payments by specified persons.<\/p>\n<p>Certificates should be generated through the authorised system and issued within the applicable timeline. Verify the name, PAN, payment and tax before release.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Monitor_Lower_or_Nil_Deduction_Certificates\"><\/span><strong><b>Monitor Lower or Nil Deduction Certificates<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Verify the certificate number, PAN, section, approved rate, maximum amount, validity and deductor details. Do not use a certificate outside its scope or beyond the permitted amount.<\/p>\n<p>An internal utilisation tracker helps prevent excessive or expired use.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Review_Year_End_Provisions\"><\/span><strong><b>Review Year End Provisions<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Classify provisions based on whether the party and amount are identifiable. Evaluate the TDS position based on the facts and applicable law. When the actual invoice is posted, make sure tax is not deducted twice.<\/p>\n<p>A provision-to-invoice reconciliation should form part of the closing process.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Understand_the_Consequences_of_Non-Compliance\"><\/span><strong><b>Understand the Consequences of Non-Compliance<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Defaults may result in interest for late deduction or deposit, late filing fees, penalties, demands, expense disallowance, delayed credit to the deductee and, in serious cases, prosecution.<\/p>\n<p>The consequence depends on the nature and duration of the default. Early identification and correction can prevent further exposure.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Common_TDS_Compliance_Errors\"><\/span><strong><b>Common TDS Compliance Errors<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Frequent errors include choosing the wrong section or rate, missing year-end provisions, delayed deduction or deposit, incorrect PAN or assessment year, ignored journal entries, incomplete non-resident analysis, misuse of lower-deduction certificates, omitted transactions, challan mismatches, duplicate deduction on provision reversal and failure to review default reports.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Practical_TDS_Compliance_Checklist\"><\/span><strong><b>Practical TDS Compliance Checklist<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Confirm that relevant ledgers have been reviewed; liable payments identified; the correct section and rate used; PAN and residential status verified; certificates checked; tax deducted and deposited on time; challans allocated; statements filed; acknowledgements preserved; defaults reviewed; corrections completed; certificates issued; and books, returns and tax records reconciled.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong><b>Conclusion<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Effective TDS compliance requires coordination between accounts, payroll, procurement, tax and finance. Many defaults originate before return filing because of incorrect classification, incomplete documentation or failure to identify taxable payments.<\/p>\n<p>A strong process begins during onboarding and continues through payment, deposit, quarterly filing, reconciliation and certificate issuance. Regular reviews, accurate master data and documented tax positions can significantly reduce exposure.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span><strong><b>Frequently Asked Questions<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong><b>Q: What is TDS?<\/b><\/strong><\/p>\n<p>TDS stands for Tax Deducted at Source. The payer deducts tax from specified payments and deposits it with the government for the recipient.<\/p>\n<p><strong><b>Q: Who is responsible for deducting TDS?<\/b><\/strong><\/p>\n<p>The person making a payment covered by the applicable provisions is generally responsible for deducting TDS, subject to the applicable payer, payment type and threshold requirements.<\/p>\n<p><strong><b>Q: Is TAN compulsory for deducting TDS?<\/b><\/strong><\/p>\n<p>A TAN is generally required for deducting, depositing and reporting TDS. Certain specified transactions may be reported using the payer&#8217;s PAN instead.<\/p>\n<p><strong><b>Q: What happens if the deductee does not provide PAN?<\/b><\/strong><\/p>\n<p>Tax may be deducted at a higher rate, subject to law, and the deductee may face difficulty obtaining credit.<\/p>\n<p><strong><b>Q: When should TDS be deducted?<\/b><\/strong><\/p>\n<p>For many non-salary payments, it is deducted at the earlier of credit to the recipient or actual payment. The relevant provision should be checked.<\/p>\n<blockquote><p><strong>Also Read:<\/strong> <a href=\"https:\/\/www.cac.net.in\/blog\/nri-wealth-playbook-top-investments-tax-hacks-in-india\/\">NRI Wealth Playbook: Top Investments &amp; Tax Hacks in India<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Tax Deducted at Source (TDS) is an important component of a business&#8217;s income-tax compliance framework. Under the TDS mechanism, a person making a specified payment is required to deduct tax and deposit it with the government on behalf of the recipient. TDS obligations may arise on payments such as salary, interest, commission, brokerage, professional fees,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":7460,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[674],"tags":[1187,3211,3205,3212,3209,3207,3206,3210,3213,3208],"class_list":["post-7459","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-assurance-accounting","tag-tax-compliance","tag-tax-deducted-at-source","tag-tds-compliance","tag-tds-compliance-checklist","tag-tds-deadlines","tag-tds-errors","tag-tds-filing","tag-tds-records","tag-tds-reporting","tag-tds-return-filing"],"_links":{"self":[{"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/posts\/7459","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/comments?post=7459"}],"version-history":[{"count":1,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/posts\/7459\/revisions"}],"predecessor-version":[{"id":7461,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/posts\/7459\/revisions\/7461"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/media\/7460"}],"wp:attachment":[{"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/media?parent=7459"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/categories?post=7459"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cac.net.in\/blog\/wp-json\/wp\/v2\/tags?post=7459"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}