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TDS Form 24Q: Filing Guidelines, Deadlines, and Penalties

  • 23 January, 2025
  • 5 Mins

Highlights

  • TDS Form 24Q is a quarterly statement filed by employers to report TDS on employee salaries.
  • It ensures accurate tax reporting and helps employees file their income tax returns.
  • Filing Form 24Q on time prevents penalties and ensures compliance with tax laws.

Tax compliance can be challenging for employers, but TDS Form 24Q simplifies one crucial aspect—reporting Tax Deducted at Source (TDS) on salaries. Filed quarterly, this form ensures that the taxes deducted from employees’ salaries get accurately reported to the Income Tax Department. It plays a key role in streamlining the tax collection process, providing a clear record of salary payments, TDS deductions, and employee PAN details.

In this blog, we’ll dive deep into what TDS Form 24Q is, who needs to file it, and why it’s vital for both employers and employees. Whether you’re a seasoned business owner or new to payroll management, understanding Form 24Q is essential to staying compliant and avoiding penalties.

What is TDS Form 24Q?

TDS Form 24Q is a quarterly statement that employers file to report the Tax Deducted at Source (TDS) on salaries paid to employees. It serves as a vital document that outlines the salary details, TDS deductions, and PAN information of all employees for a specific quarter. Find detailed format of TDS Form 24Q here: TDS Form 24Q Format

This form plays a crucial role in ensuring that the deducted tax is accurately deposited with the government and credited to the employee’s tax account, making it easier for them to file their income tax return and maintain tax compliance. You just have to ensure using the accurate TDS rate from the TDS rate chart to file accurately.

Who Must File TDS Form 24Q?

Employers are responsible for filing TDS Form 24Q. This includes any individual or entity that pays salaries and deducts TDS from their employees’ income. The obligation to file applies to:

  • Central/ State Government/ PSU
  • Private and public companies
  • Sole proprietors
  • Partnership firms
  • Hindu Undivided Families (HUFs)
  • Trusts

Why Do You Need to File this Form?

The primary purpose of TDS Form 24Q is to streamline the tax collection process and ensure that taxes on salaries are deducted and deposited correctly. It serves as a record for both the Income Tax Department and employees, helping to:

  • Prevent tax evasion by ensuring accurate and timely TDS return filing.
  • Provide employees with a clear summary of their salary and tax deductions, helping with their income tax return filing.
  • Helps with the issuance of Form 16, which summarizes the total salary paid and TDS deducted for the financial year.

Format of TDS Form 24Q

TDS Form 24Q consists of two parts:

1. Annexure I:

Filed in all four quarters, this annexure contains general details about the employer (deductor) and employee (deductee). It includes information such as:

  • PAN of the employer and employees
  • Total amount of TDS deducted and deposited
  • Challan details for TDS payments

2. Annexure II:

This annexure is filed only in the fourth quarter and includes a comprehensive breakdown of each employee’s salary and tax details for the entire financial year. It covers:

  • Gross salary paid
  • Exemptions and deductions (e.g., HRA, Section 80C)
  • Taxable income and TDS liability

Together, these annexures provide a complete picture of salary payments and tax deductions.

Penalties You Can Face for Late Submission of Form 24Q

Filing Form 24Q on time is critical to avoid penalties. The Income Tax Act imposes strict penalties for late submission, including:

  • Late Filing Fee under Section 234E:

A fee of ₹200 per day applicable for each day of delay until you file the return. However, the total fee cannot exceed the amount of TDS payable.

  • Penalty under Section 271H:

In cases where the delay exceeds one year or involves incorrect details, a penalty ranging from ₹10,000 to ₹1,00,000 may be imposed.

Due Dates for Filing TDS Form 24Q

What Do You Need to File in TDS Form 24Q?

Before filing Form 24Q, employers must ensure they have the following details ready:

1. Basic Information:

  • Employer’s TAN and PAN
  • Employee’s PAN and personal details

2. TDS Deduction Details:

  • Total salary paid to each employee
  • TDS deducted and deposited for each month

3. Challan Details:

  • BSR code of the bank
  • Challan serial number and payment date

Step-by-Step Guide to File TDS Form 24Q on TRACES

Filing TDS Form 24Q is a straightforward process when you follow these steps:

1. Collect the Necessary Information

Gather all employee details, including their PAN, salary information, and TDS deduction data.

2. Login to the TRACES Portal

Visit the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal using your TAN and password to access the filing section.

3. Prepare the Form

a. Select the relevant financial year and quarter.
b. Fill in the necessary details for each employee, ensuring accuracy in TDS amounts and deductions.

4. Validate the Data

Ensure that the data entered is accurate by validating it using the built-in validation tool on the TRACES portal. This reduces the chances of rejection.

5. Submit the Form

Once the form is validated, submit it electronically through the TRACES portal.

6. Download the Acknowledgment

After submission, download the acknowledgment receipt. This serves as proof of filing and should be retained for records.

How to Download TDS Form 24Q From TRACES

Exceptions to Filing Form 24Q in Q4

  • In certain cases, employers may not need to submit a statement for the fourth quarter (Q4) of Form 24Q. This typically happens when no salaries were paid during the fourth quarter or no TDS was deducted, then Form 24Q is not required for that quarter.

How to Handle TDS for Temporary Staff?

When an employee joins a firm for a short period, the TDS deduction process remains the same as for regular employees. However, the employer must ensure the following:

  • Pro-rated Salary Calculation: You must calculate the salary on a pro-rata basis for the period short-term employees have worked.
  • Accurate TDS Deduction: You should calculate the TDS according to the salary paid, ensuring you apply the appropriate tax slab.
  • File Form 24Q Properly: Even if the employee worked only for a short duration, the TDS deduction for their salary should be reported in Form 24Q for the relevant quarter.

Do All Employees Need a TDS Certificate?

Yes, a TDS certificate is crucial for employees to claim credit for the tax deducted. It helps employees verify that the TDS has been properly deducted and deposited with the government. This certificate is typically provided through Form 16 at the end of the financial year, which summarizes the total salary paid and TDS deducted for each employee.

However, not all employees may need a TDS certificate if their total salary does not exceed the taxable threshold, or if they have already provided other necessary documentation to claim exemptions. Still, for most employees, especially those who are liable to pay taxes, receiving a TDS certificate is essential for accurate tax filing.

Conclusion

Filing TDS Form 24Q is a straightforward but essential process for employers to stay compliant with income tax regulations. It ensures that the tax deducted at source from employees’ salaries is accurately reported and deposited with the government.

By understanding the purpose, format, filing process, and deadlines of Form 24Q, employers can avoid penalties and maintain smooth operations. Additionally, ensuring proper documentation and timely filing of Form 24Q helps employees track their tax payments and simplifies their income tax return process. However, it might not always be an easy task for employers with many employees. For them, an automated e-TDS software like GSTrobo®̥ is convenient, ensuring accurate reporting for Form 24Q.