Founders: Don't Miss The Last Date To Deposit TDS

Key Takeaways

• Standard rule: TDS deducted in any month must be deposited by the 7th of the following month, no exceptions for most categories of payment
• March exception: TDS deducted during March, 1–31 March, gets an extended deadline of 30 April, this is a statutory rule, not a discretionary extension
• Government deductors, no challan: TDS must be deposited on the same day as deduction, zero grace period
• Missing the deadline costs money: Late deposit attracts interest at 1.5% per month under Section 201(1A), calculated from the date of deduction to the date of actual deposit
• TDS returns are separate: Quarterly filings, Forms 24Q and 26Q, are a different obligation from the monthly deposit, missing either has independent penalties
• Challan to use: Always ITNS 281 for TDS deposits, not ITNS 280, which is for advance tax

The Standard Last Date To Deposit TDS — The 7th-Of-The-Month Rule

The last date to deposit TDS is the 7th of the month following the month of deduction for all non-government deductors. That is the single rule covering the majority of Indian businesses.

Examples: TDS deducted in April 2026 → deposit by 7 May 2026. TDS deducted in July 2026 → deposit by 7 August 2026. TDS deducted in November 2026 → deposit by 7 December 2026.

This TDS deposit deadline applies uniformly across all payment categories, salary under Section 192, contractor payments under Section 194C, professional fees under Section 194J, interest under Section 194A, commission under Section 194H, and rent under Section 194I. There is no section-wise variation in the deposit date for standard payments.

The 7th rule applies to companies, LLPs, partnership firms, HUFs, and individuals who are required to deduct TDS. If you are running a Bengaluru SaaS company paying a freelance developer ₹80,000/month, a Delhi consulting firm paying rent on office space, or a Mumbai D2C brand paying a marketing agency, the 7th-of-next-month rule governs your deposit obligation in each case.

If you are a founder managing TDS compliance yourself or through a service like Virtual Accounting, knowing this deadline precisely is the first line of defence against penalties.

The March Exception — Why TDS Deposited In March Gets Extra Time

TDS deducted during 1 March to 31 March does not follow the standard 7th rule. The statutory deadline for March TDS is 30 April of the same assessment year.

So for FY 2026–27, any TDS deducted in March 2027 can be deposited as late as 30 April 2027 without attracting a late deposit interest charge. This is not a concession that the tax department issues on a case-by-case basis, it is written into the Income Tax Rules and applies automatically.

The rationale is practical. March is financial year-end. Businesses are reconciling accounts, closing books, computing final salary figures, and processing last-minute vendor payments. The extended window for TDS payment last date in March acknowledges that final payment amounts in March often get confirmed only in the first few days of April.

Two important caveats. First, this extension applies to the deposit only, the Q4 TDS return filing due date remains 31 May, unchanged. Second, waiting until 29 or 30 April to deposit March TDS is a risk not worth taking. Bank processing failures, NSDL portal downtime, or a public holiday landing on 30 April can push you into default. Deposit March TDS by the third week of April as a rule of thumb.

Government Deductors Vs. Non-Government Deductors — Different Rules Apply

Not all deductors are on the same monthly TDS deposit date schedule. Government deductors operate under a stricter set of rules.

Government deductors depositing without a challan, book entry method: TDS must be credited to the Central Government on the same day as the deduction. There is no 7-day window, no grace period, no exception for weekends. Deduct on Tuesday, deposit on Tuesday.

Government deductors depositing with Challan ITNS 281: The deadline relaxes to the 7th of the following month, same as non-government deductors.

For most founders, startups, and SMEs reading this, you fall entirely under the non-government category, and the 7th rule governs your obligations. But if you run a PSU subsidiary, work with a government entity, or have been roped into a government contract where you operate as a deductor, verify which category applies to your specific structure.

The distinction is not academic. Missing the same-day rule as a government deductor, no-challan category, means you are in immediate default from day one, there is no grace period to catch up within the month.

Full TDS Payment Schedule For FY 2026–27, Month-By-Month

Use this TDS payment schedule as your compliance calendar. Pin it to your finance team’s dashboard, add it to your accounting software reminders, or give it to whoever is responsible for TDS in your organisation.

Important Note On Holidays And Sundays: If the 7th of a month falls on a Sunday or a gazetted public holiday, the safe practice is to deposit TDS on the preceding working day. Do not wait for the next working day after the 7th, that is already a late deposit. Process payment on the Friday or last working day before the 7th in such months.

This schedule applies to non-government deductors for regular TDS categories. Special cases, property purchase, rent, contractor payments by individuals, follow different rules, covered in the next section.

Special Cases — Property, Rent, And Other One-Off TDS Challan Due Dates

Three specific sections fall outside the standard 7th-of-the-month framework. These are the sections most commonly missed by founders and solopreneurs because they apply to personal or one-off transactions, not regular payroll or vendor payments.

Section 194IA — Purchase Of Property Above ₹50 Lakh

If you buy a property, residential or commercial, for ₹50 lakh or more, you must deduct TDS at 1% of the sale value. The TDS challan due date here is 30 days from the end of the month in which the deduction is made. Filed via Form 26QB on the TIN-NSDL portal. No TAN required, your PAN is sufficient.

Example: You buy an office in Bengaluru for ₹1.2 crore in September 2026. TDS of ₹1,20,000 must be deposited by 31 October 2026.

Section 194IB — Rent Paid By Individuals Or HUF Above ₹50,000/Month

If you personally, not through your company, pay rent above ₹50,000 per month, you are required to deduct TDS at 5%. The deposit deadline is again 30 days from the end of the month of deduction. Filed via Form 26QC. PAN-based, no TAN needed.

This catches a lot of founders paying high-value residential rent in metros. If you are paying ₹80,000/month in rent for your Mumbai apartment from your personal account, 194IB applies to you directly, not to your company.

Section 194M — Contractor Or Professional Payments By Individuals Above ₹50 Lakh/Year

If you, as an individual, not through a company, make aggregate payments to contractors or professionals exceeding ₹50 lakh in a financial year, TDS at applicable rates applies. Same 30-day deposit window. Filed via Form 26QD.

All three of these sections, 194IA, 194IB, and 194M, use the 30-day rule and separate forms, not Challan ITNS 281 in the standard sense. Each has its own dedicated challan form online. Missing these is common precisely because business owners do not register the personal-level compliance obligation when their mind is on company-level TDS.

TDS Return Filing Due Dates — Separate From Deposit Dates

Depositing TDS monthly is one obligation. Filing quarterly TDS returns is a completely separate obligation. Many founders conflate the two. They are not the same, and penalties for each are independent.

TDS returns are filed quarterly using these forms:

• Form 24Q, salary payments, Section 192
• Form 26Q, non-salary domestic payments
• Form 27Q, payments to non-residents
• Form 27EQ, Tax Collected at Source, TCS

Quarterly TDS Return Filing Schedule For FY 2026–27:

The penalty for late return filing is ₹200 per day under Section 234E, capped at the total TDS amount in that return. So if your Q2 return covers ₹1,80,000 in TDS and you file 20 days late, you owe ₹4,000 in late fees, on top of any interest already accrued on late deposits.

If you miss the return filing entirely, not just late, actually do not file, the penalty under Section 271H can go up to ₹1,00,000.

The core distinction to remember: deposit = monthly obligation, return = quarterly obligation. You can deposit TDS on time every single month and still get hit with a Section 234E penalty if you miss the quarterly return. Both boxes must be ticked.

What Happens If You Miss The TDS Deposit Deadline

Missing the TDS deposit deadline is not a clerical oversight that gets quietly forgotten. The Income Tax Act has three layers of consequences, and they stack.

Layer 1 — Interest Under Section 201(1A)

This is the immediate and automatic cost:

• TDS not deducted at all: interest at 1% per month from the date it was deductible to the date of actual deduction
• TDS deducted but not deposited on time: interest at 1.5% per month from the date of deduction to the date of deposit

The calculation is monthly, not daily. A delay of even one day into a new month is counted as a full month of interest. So depositing on 8 May instead of 7 May means you pay interest for the entire month of delay, not one day’s worth. (Payment Of TDS And TCS Tax Calendar)

Layer 2 — Expense Disallowance Under Section 40(a)(ia)

This one hurts your bottom line in a less obvious way. If TDS was not deducted or not deposited on time, 30% of the underlying payment gets disallowed as a business expense when you file your ITR.

Concrete example: Your Delhi consulting firm pays a legal firm ₹5 lakh in FY 2026–27. TDS at 10% under Section 194J = ₹50,000. If you skip the TDS deduction or deposit it late, ₹1,50,000, 30% of ₹5 lakh, gets added back to your taxable income. At a 30% corporate tax rate, that is ₹45,000 in additional tax, on top of the ₹750/month in 201(1A) interest.

Layer 3 — Penalty And Prosecution

Section 271C allows a penalty up to the amount of TDS not deducted or deposited, so up to ₹50,000 in the example above, in addition to everything else.

Section 276B covers prosecution in serious default cases: imprisonment of 3 months to 7 years. This is not routine for a first-time missed deposit. It applies to repeated or wilful defaults where the deductor collected TDS from the payee but deliberately withheld it from the government. If you are reading this article, you are trying to comply, that context matters. But the provision exists and tax officers can invoke it.

The practical takeaway: a single missed TDS deposit is a fixable problem. Deposit immediately, pay the 201(1A) interest, file the return on time. Do not compound it by waiting.

How To Actually Deposit TDS — Challan ITNS 281 And The Payment Process

The challan for all standard TDS deposits is ITNS 281. Not ITNS 280, that is for advance tax, self-assessment tax, and regular income tax payments. Using the wrong challan creates reconciliation problems that take months to fix with the assessing officer.

How To Deposit TDS Online — Step By Step:

1. Go to the Income Tax e-Filing Portal or the TIN-NSDL Portal
2. Select Challan ITNS 281
3. Enter your TAN, Tax Deduction Account Number, this is not your PAN. TAN is a 10-character alphanumeric number starting with 4 letters
4. Select the nature of payment: company deductee or non-company deductee
5. Select the relevant section code, for example, 194J for professional fees, 194C for contractors, 192 for salary
6. Enter the amount, TDS principal plus any applicable surcharge and education cess
7. Choose payment mode: net banking, instant, or over-the-counter at an authorised bank branch
8. On successful payment, you receive a BSR code, 7-digit bank branch code, and a challan serial number, save both. You will need these when filing your quarterly TDS return

Physical deposit at bank branches, SBI, HDFC, ICICI, and other authorised banks, is still permitted using a paper ITNS 281 form, but online payment is faster, generates instant acknowledgement, and eliminates the risk of data entry errors in manual challans.

TAN is mandatory. You cannot deposit TDS without a TAN. If your business has not registered for TAN yet, apply via Form 49B, available on the NSDL portal. Processing typically takes 5 to 7 working days.

Businesses that work with an outsourced finance team or a managed TDS compliance service like Virtual Accounting have this process handled end-to-end, TAN maintenance, monthly deposit execution, challan tracking, and quarterly return filing, without the founder or CFO having to log into the portal each month.

Can TDS Deposit Deadlines Be Extended?

The short answer: only by official CBDT notification, and only in extraordinary circumstances.

The government has extended TDS deadlines before. During COVID-19 in FY 2019–20 and FY 2020–21, the CBDT issued circulars pushing back several compliance deadlines including TDS payments. Those extensions were announced through official government notifications and applied to all taxpayers automatically.

Outside of a CBDT circular, there is no mechanism for a taxpayer to request or obtain a personal extension. You cannot write to your assessing officer and ask for more time. You cannot self-declare a delay and expect it to be treated differently. The deadline is the deadline.

For FY 2026–27, no general extension to standard TDS deposit dates has been announced as of the time of writing. Standard dates apply in full.

The best practice is to check the CBDT Website for circulars near year-end, March to April, or during any period of significant disruption. Extensions, if announced, appear there first.

If you have already missed a deposit deadline, the correct action is straightforward: deposit immediately, calculate and include the 201(1A) interest for the period of delay, and file your quarterly return on time. Every additional day of delay adds to the interest liability. Do not wait.

For situation-specific advice, especially for complex deductor structures, non-resident TDS under Section 195, or compounding applications, consult your CA.

Let Virtual Accounting handle your monthly TDS deposits, quarterly return filings, and any penalty notices — so your team focuses on running the business, not chasing compliance calendars. Starting at ₹4,000/month. Learn more

Frequently Asked Questions

What Is The Last Date To Deposit TDS For April 2026?

TDS deducted in April 2026 must be deposited by 7 May 2026. This follows the standard 7th-of-the-following-month rule applicable to all non-government deductors.

Why Is The TDS Deposit Deadline For March Different From Other Months?

TDS deducted in March has a statutory extended deadline of 30 April under the Income Tax Rules. This carve-out exists because March is financial year-end and businesses are finalising accounts and payroll. It applies automatically, no application required.

What Should I Do If The 7th Falls On A Sunday Or A Public Holiday?

Deposit TDS on the preceding working day. Do not wait for the next working day after the 7th. Depositing after the 7th, even by one day, is technically a late deposit and attracts 201(1A) interest.

What Is The Interest Rate If I Deposit TDS Late?

If TDS was deducted but deposited late, interest runs at 1.5% per month, or part of a month, under Section 201(1A). If TDS was not deducted at all, interest is 1% per month from the date it was deductible to the date of actual deduction. If you prefer expert handling of the calculation and challan payment, consider Virtual Accounting by AI Accountant.

Is The TDS Deposit Deadline The Same As The TDS Return Filing Deadline?

No. Deposit is a monthly obligation, typically due by the 7th of the following month, while the return is a quarterly obligation, due on 31 July, 31 October, 31 January, and 31 May. Many businesses outsource this to avoid misses; Virtual Accounting by AI Accountant can manage both deposit scheduling and quarterly return filings end-to-end.

Which Challan Do I Use To Deposit TDS?

Always use Challan ITNS 281 for TDS deposits. ITNS 280 is for income tax payments, advance tax and self-assessment tax, and should not be used for TDS. Using the wrong challan creates reconciliation issues.

What Is The TDS Deposit Deadline For Property Purchases Under Section 194IA?

For property purchases above ₹50 lakh, TDS at 1% must be deposited within 30 days from the end of the month in which the deduction is made. It is filed via Form 26QB using your PAN, TAN is not required.

Does The 30 April Extension For March Also Apply To The TDS Return?

No. The 30 April extension applies only to the deposit of March TDS. The Q4 TDS return, covering January to March, must still be filed by 31 May. These are separate obligations with separate deadlines.

Can I Request A Personal Extension For The TDS Deposit Deadline?

No. There is no provision for taxpayer-specific extensions. Deadline extensions are possible only via official CBDT circulars that apply generally. Absent such a circular, the standard due dates apply.

What Is The Penalty If I Do Not File My TDS Return On Time?

Late filing attracts a fee of ₹200 per day under Section 234E, capped at the total TDS amount in that return. Complete non-filing can attract a penalty up to ₹1,00,000 under Section 271H, separate from any interest on late deposits.