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The Do’s and Dont’s in TDS Payment

Learn TDS payment nuances: steer clear of multiple TANs, verify preprinted challans, and embrace best practices for smooth compliance.

The Do’s and Dont’s in TDS Payment: Introduction

TDS or Tax Deducted at Source is just Tax on the income one receives. The Tax is deducted from the specific payments such as rent, salary, commission, interest, etc.

The aim of this concept is that the person liable to make a particular payment of any nature to another person shall deduct Tax and forward it to the Central Government. TDS deduction is important as It helps lower taxes as it will be deducted right when the TDS payment is being made. 

TDS is mandatory, Section 192 specifically deals with TDS on Salary. Every employer who pays a specific monthly income should pay TDS from the salary if the income amount is over the basic exemption limit. The TDS rates are set based on every individual’s age group and income.  

The deductor is responsible for deducting the TDS before making the payment to the deductee with the government. The amount is deducted irrespective of the mode of payment like cash, cheque or credit. It is also linked to the deductor and deductee’s PAN number. We need to take certain measures to ensure successful TDS filing, avoiding demand creation, demand closure, and finding help from traces. 

Do’s For Filing Of TDS And Depositing TDS Payment 

  • Ensure you deposit the amount on time, without any delays, to avoid last-minute hassles and extra charges for late  TDS payment.
  • Always double-check the TAN no. and the Assessment Year while depositing the challan.
  • Check if you have filled in the correct PAN/Aadhaar card details of the deductee.
  • Check if you have added the correct CIN/BIN in the TDS statement.
  • Ensure the correct receipt number is entered in the filing of the TDS.
  • Check the correct data in Annexure Form II of Form 24Q.
  • Form 16 for the Financial Year 2022-23 must be issued on or before 15th June 
  • In case an employee had more than one employer during a financial year, they must do the following:
  • Each employer shall issue a separate Form 16 Part A for the employee’s period in the company.
  • Part B shall be issued on Form 16, either by the current employers or both previous and current employers as per the employee’s choice.
  • Check the TIN NSDL website and download the latest quarterly TDS statement utilities (RPU and FYU) to prepare the statement.

Do’s For Avoiding TDS Demand Creation And Demand Closure

  • Go to the TRACES (Taxpayers Registration) website and double-check the challan details before filling out the statement to ensure that the wrong challan details have not been filled out, which will lead to a short payment demand due.
  • Deductor must file correction for Annexure-I and Annexure-II if demand is present in 24 Q and challan is paid against it.
  • Ensure to always raise the correct flags for higher/lower/no deduction of TDS as per reason in deductee rows.
  • Check the demand reflecting on the TRACES login regularly and take necessary action for closure of demand.

Do’s While Boarding Help From TRACES

  • Go to the TRACES website and check the e-tutorials and FAQs published on the website for any guidance. Contact the helpdesk at or raise a grievance on Request For Resolution (Ticket) if the problem persists.
  • While creating tickets and raising a grievance, ensure that you mention the complete query with Financial Year, form type and quarter details.
  • Always provide the correct contact details of the concerned person while creating a ticket.
  • If the grievance is regarding some errors in digital signature/online correction, then attach complete, clear screenshots of the errors for further analysis.

These are all of the DOs that you should follow while making your TDS payment and for the proper, correct filing of statements to avoid unnecessary late fees or extra payment. Now let’s look at some equally important DON’Ts. Follow these DON’Ts, and it will help you understand exactly what to avoid while filing  statements.

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Don’ts While Filing TDS Statements

  • Don’t share your TRACES website login details such as username and password to any unauthorised person. 
  • Don’t report PAN details in the statement without getting a copy of your PAN card. 
  • Don’t round off the amount at the Individual Deductee level since the TDS-CPC System does the round off at a statement level.
  • Don’t conclude and report the employees’ savings, deductions and rebates without taking proof from the Employees. 
  • Do not use incorrect types of challan.
  • Do not misquote PAN with TAN and give PAN in place of TAN or vice versa.
  • Do not use a single challan to deposit Tax deducted under different sections.
  • Do not use a single challan to deposit the Tax for corporate and non-corporate deductees altogether.
  • Do not use a single challan to deposit various types of taxes such as advance tax, self-assessment tax, etc. 
  • Do not confuse Financial Year (FY) with Assessment Year (AY) while indicating it in the challan. 
  • Using different TANs for different challans is not needed if you have more than one TAN for the same division filing. 
  • Do not use the preprinted challans that you receive without verifying if the TAN and PAN numbers in the challan are yours. You can check it on the allotment letter you have received from NSDL or ITD website.

These are all the DOs and DON’Ts you must follow for the proper filing of statements. Filing TDS is a crucial task. Hence, understanding and following these points are equally vital for a hassle-free, appropriate and acceptable TDS statement filing of your company.


However, checking and comprehending the vast set of rules and regulations every time while paying the can be exhausting.

That’s why we at VakilSearch assist you in grasping the tidbits about the process, leaving no room for ambiguity or uninvited legal expenses. Visit our website and take your first step towards running a foolproof and legally compliant business. Visit our website to learn more.

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