Tax Deducted at Source (TDS) is where many small businesses first stumble into compliance trouble — not because the rules are impossible, but because the obligations are monthly and quarterly, and each missed step compounds. This short guide covers the basics every business owner should know.
When Do You Have To Deduct?
If you pay salaries, contractor bills (above Rs. 30,000 per contract or Rs. 1 lakh per year), professional fees (above Rs. 30,000 per year), rent (above Rs. 2.4 lakh per year) or commission, you likely have a TDS obligation. Companies and firms must deduct regardless of size; proprietors must deduct once their previous-year turnover crossed Rs. 1 crore (Rs. 50 lakh for professionals).
“The TDS cycle is simple once it’s a habit: deduct when you pay, deposit by the 7th, file every quarter, issue certificates. Break the habit and the late fees start.”
Janani Tax Services Old Alwal, HyderabadThe Compliance Calendar
Four dates cover most of your TDS life. Put them in your phone — or let us track them for you.
What Late Compliance Costs
Late deposit attracts interest at 1.5% per month. Late return filing costs Rs. 200 per day under Section 234E (capped at the TDS amount), and continued default can invite penalties from Rs. 10,000 to Rs. 1 lakh. A missing or wrong PAN forces deduction at 20% and blocks the deductee’s credit.
The good news: none of this is hard to avoid. A fixed monthly process — compute, deposit, record — plus quarterly filing keeps you permanently clear.
