Suresh runs a small manufacturing unit in Indore. He’s good at what he does—quality work, happy clients. But one day, he got a notice. Something about TDS not deposited on time. He panicked. He had no clue what went wrong.
And truth is… he’s not alone.
TDS/TCS compliance sounds like a routine formality. But for many small businesses, it turns into a maze.
Let’s break it down. Easy. Like a step-by-step. No heavy jargon. No long lectures. Just what you need.
Step 1: Know What Applies to You
First things first—are you required to deduct TDS or collect TCS?
If you’re making certain payments—like salaries, contractor fees, rent, or commission—TDS probably applies. Selling goods over a certain value? That’s where TCS kicks in.
So check your business type. Your turnover. Your transactions.
Not sure? Ask a CA. Seriously, better safe than sorry.
Step 2: Deduct/Collect It Right
Okay. Now you know it applies. Great.
But now comes the tricky bit. The rate.
Different payments = different TDS/TCS rates. One mistake here? And the whole return can get messed up. Deducting too much is a problem. Too little? A bigger one.
Use the right section. Cross-check the PAN of the deductee. It matters.
Always.
Step 3: Deposit It On Time
This is where most people go wrong. Suresh did too.
TDS collected in a month must be deposited by the 7th of the next month. Simple rule. Easy to forget.
Delay? There’s interest. And penalty. Even prosecution in extreme cases.
So, mark your calendar. Set reminders. Automate it if you can.
Step 4: File the Returns
Quarterly TDS returns. Yeah, those boring .txt files you upload on TRACES.
But they matter.
Form 24Q, 26Q, 27Q—each for different types of payments. Upload with accurate challan details. No mismatches. No errors.
Because wrong filing = notices. And honestly, nobody wants to deal with those.
Step 5: Issue Certificates
Don’t skip this.
After filing, you need to issue TDS certificates—Form 16 for salary, Form 16A for other payments.
It’s not just a formality. Your deductees need these for their tax filings. Delay in issuing? That’s trouble too.
So don’t put it off.
Final Thought?
TDS/TCS compliance ain’t rocket science. But it does demand attention. And consistency.
Suresh now uses a CA. He learned it the hard way. But you don’t have to.
Whether you’re new to it or already managing this stuff, just remember—follow the steps. Stay timely. Stay clean.
Because when tax is done right, it’s one less thing to stress about.
And in business? That peace is golden.