Form 24Q

What Is Form 24Q? A Guide to TDS Returns

Form 24Q is a quarterly TDS (Tax Deducted at Source) return that employers must file with the Income Tax Department of India for tax deducted from employees’ salaries under Section 192 of the Income Tax Act. This form serves as an official record of the salary payments made to employees and the corresponding tax deducted at source during each quarter of the financial year.

Employers who deduct TDS on salaries must submit Form 24Q four times annually, corresponding to the quarters ending in June, September, December, and March. This quarterly filing ensures regular reporting and remittance of deducted taxes to the government. The form captures comprehensive details about both the employer (deductor) and employees (deductees), creating a transparent record of tax compliance.

The structure of Form 24Q consists of two primary annexures, each serving a distinct purpose:

• Annexure I: Must be filed for all four quarters of the financial year. It includes essential information about:
  • The employer’s details (name, address, and TAN)
  • Challan information (number, date, and amount)
  • Employee information (PAN, name, and payment details)
  • TDS deduction and deposit details
• Annexure II: Required only for the last quarter (January-March). This annexure provides:
  • Detailed breakdown of each employee’s salary
  • Allowances and perquisites information
  • Deductions under Section 80C
  • Complete tax computation as per income tax slabs

Any entity that functions as an employer, including individuals, HUFs, firms, or companies, must file Form 24Q when they deduct TDS on salaries exceeding the basic exemption limit. The Tax Deduction Account Number (TAN) is a mandatory requirement for filing this form.

When completing Form 24Q, employers must include specific challan details such as the unique challan serial number, deposit date, the bank’s BSR code, and the total amount paid (including TDS and interest). Additionally, comprehensive employee information must be provided, including PAN, name, amount paid, date of payment/credit, and the specific TDS amount deducted.

The primary purpose of Form 24Q is to ensure proper accounting of tax deducted from employee salaries. It creates accountability for employers by requiring them to report all salary payments and corresponding tax deductions. Furthermore, accurate and timely filing of Form 24Q is essential for employees as it directly impacts the generation of their Form 16, which they need for filing their individual income tax returns.

Non-compliance with Form 24Q filing requirements can result in penalties for employers and potentially disrupt employees’ tax filing processes. Therefore, understanding the structure, purpose, and filing requirements of Form 24Q is crucial for employers to maintain tax compliance.

Why is Form 24Q used for TDS returns?

The primary purpose of Form 24Q revolves around tax compliance and reporting for employee salaries. This specialized TDS return form serves as a critical mechanism for employers to report tax deducted from their employees’ salaries to the Income Tax Department.

Under Section 192 of the Income Tax Act, employers must deduct TDS on salaries that exceed the basic exemption limit. Consequently, they are required to file Form 24Q on a quarterly basis throughout the financial year to maintain proper tax records. This regulatory requirement applies to all types of employers, whether individuals, HUFs, firms, or companies.

Form 24Q functions primarily as a declaration tool for TDS based on salary payments. The form creates accountability by requiring detailed reporting of:

• Total remuneration paid to each employee
• Amount of TDS deducted from employee salaries
• Dates and methods of tax deposit to government accounts
• Challan information used for tax payments

This quarterly statement ensures proper reconciliation between the tax collected and the tax deposited with the government. Moreover, the information submitted through Form 24Q is reflected in each employee’s Form 26AS and Annual Information Statement (AIS), which serves as a consolidated tax credit statement.

One crucial aspect of Form 24Q is its role in facilitating the issuance of Form 16. Timely and accurate filing of Form 24Q is essential because it directly enables employers to generate Form 16 certificates for their employees. These certificates are vital documents that employees need to complete their personal income tax returns accurately.

The filing structure of Form 24Q is specifically designed to capture comprehensive tax information throughout the year:

• Annexure I must be filed for all four quarters, containing details about the deductor, deductee, and challan information
• Annexure II is required only with the fourth quarter filing (January to March) and provides the complete salary breakup for the entire financial year

Particularly with the introduction of the New Tax Regime under Section 115BAC, Form 24Q has gained additional importance as it must now reflect employee tax regime preferences. This helps ensure proper tax credit reconciliation regardless of which tax regime an employee has selected.

Beyond mere compliance, Form 24Q serves as an essential link in the broader tax ecosystem. It creates transparency in the employer-employee tax relationship while providing the government with critical data on salary-based tax collections. Non-compliance with Form 24Q filing requirements can result in significant penalties and may adversely impact employees’ ability to claim tax credits.

The Tax Deduction Account Number (TAN) remains a fundamental prerequisite for filing Form 24Q. This unique identifier helps the tax department track and reconcile all TDS transactions made by an employer, thus maintaining the integrity of the tax collection system.

Structure of Form 24Q: Parts and Annexures

Form 24Q divides into distinct parts and annexures that work together to provide a comprehensive record of salary payments and tax deductions. The structure follows a logical organization that allows employers to report TDS information in a systematic manner across all four quarters of a financial year.

Part A: Summary of TDS deductions

Part A of Form 24Q contains fundamental information about the deductor (employer) and the overall tax deduction details. This section includes the Tax Deduction Account Number (TAN), Permanent Account Number (PAN), financial year, and assessment year details. Additionally, it requires the employer to indicate whether any statement has been filed earlier for the same quarter. Essentially, Part A serves as the identifying section of the form that establishes who is filing the return and for which period.

Part B: Employee salary details

Part B encompasses details regarding the person responsible for tax deduction and a summary of the tax deducted and paid to the Central Government. This portion requires comprehensive information about the tax deduction officer, including name, address, and contact details. Notably, it also contains a tabular format where employers must record the TDS amount, surcharge, education cess, interest, and other components that constitute the total tax deposited.

Annexure I: Quarterly challan and deductee info

Annexure I must be submitted for all four quarters of a financial year. This annexure primarily serves as a deductee-wise breakdown of TDS against each particular challan. It contains two major information sets:

• Challan details: BSR code of the branch, challan serial number, date of deposit, total amount in challan, and amounts of TDS and interest to be allocated among deductees
• Employee information: Employee reference number (if available), name, PAN, date of payment/credit, amount paid, TDS amount, TDS section code, and education cess

This annexure helps the Income Tax Department match the TDS deposited with the PAN of each employee.

Annexure II: Year-end salary and tax breakup

Unlike Annexure I, Annexure II is required only with the fourth quarter (January-March) filing. This annexure provides a complete salary breakdown for the entire financial year and contains crucial information about each employee’s tax computation. It includes the total remuneration paid to employees, any deductions claimed (such as HRA, Section 80C), other income declared by employees, and their total tax liability. Forthwith, Annexure II also indicates whether the employee has opted for the old or new tax regime. The employer must calculate each employee’s tax liability based on salary and deductions, subsequently entering this information in the annexure.

Annexure III: Pension and other income details

Annexure III applies specifically to banks and similar entities that pay pension to senior citizens aged 75 years and above under the provisions of Section 194P. This annexure, similar to Annexure II, is required only in the fourth quarter filing. By submitting pensioner data through this annexure, the assessee (senior citizen) will not be required to file income tax returns separately. The annexure contains three main sections: left panel for recording employee data, right panel that lists recorded data in sequence of entry, and bottom section with self-labeled action buttons. It includes comprehensive information about pension income, tax computation, and total TDS deducted during the financial year.

The entire structure of Form 24Q facilitates proper tax administration by providing the tax authorities with detailed information about salary payments, deductions, and tax remittances throughout the financial year.

How to file Form 24Q online and offline

Employers have multiple options for filing Form 24Q with the Income Tax Department. The filing can be done either electronically through designated portals or physically at authorized centers, depending on specific requirements and deductor status.

Using NSDL or TRACES portal

Filing Form 24Q online involves a structured process that requires preparation and validation of the return file:

1. Download the Return Preparation Utility (RPU) from the NSDL Protean portal
2. Prepare the return file in clean text ASCII format with ‘.txt’ extension
3. Enter the required details in the utility, including:
   • TAN and PAN information
   • Financial year and quarter details
   • Employer information and challan particulars
   • Employee-wise deduction details
4. Validate the file using the File Validation Utility (FVU) provided by NSDL
5. Generate the FVU file after successful validation
6. Log in to the Income Tax portal and navigate to e-filing > income tax forms
7. Upload the FVU file and verify electronically

For the final quarter filing, select both Annexure I and II options, as Annexure II appears only in the fourth quarter. The challan information, including the BSR code, challan serial number, and date of deposit, must be entered accurately in the designated fields.

In case of errors in the TDS return, a correction statement can be filed by downloading the return correction utility, importing the consolidated TDS file from TRACES, making the necessary corrections, and submitting the revised statement.

Filing through TIN-FC centers

Although electronic filing is increasingly common, offline submission through TIN Facilitation Centers (TIN-FC) remains an option:

1. Prepare the TDS statement using the Return Preparation Utility
2. Validate the file using the File Validation Utility
3. Print and sign Form 27A after generating the FVU file
4. Submit the signed Form 27A along with the FVU file to the nearest TIN-FC

TIN-FC centers serve as intermediaries that receive TDS statements and upload them to the central system. These centers are particularly useful for deductors who face challenges with online submission or prefer in-person assistance with their filing.

Mandatory e-filing cases

Certain categories of deductors are legally required to file Form 24Q electronically:

• Government officers
• Company principal officers
• Assessees whose accounts were audited for the previous year under Section 44AB of the Income Tax Act
• Entities with 20 or more deductees (employees) recorded in the statement during any quarter of a financial year

For online submission of TDS statements, registration of the organization on the Income Tax e-filing portal is mandatory. The TRACES portal (TDS Reconciliation Analysis and Correction Enabling System) offers additional services for NRI users through a dedicated URL.

Before filing, employers should ensure they possess an active TAN, as this is a fundamental requirement for TDS return submission. Additionally, the file format must strictly adhere to guidelines, with all constant values like ‘Record Type’ and ‘Upload Type’ written in uppercase letters.

First-time filers should pay particular attention to date formats (DDMMYYYY), amount fields (rounded to two decimal places), and TDS rates (specified to four decimal places) to avoid rejection of their submission.

Penalties and interest for late or incorrect filing

Non-compliance with Form 24Q filing requirements results in financial repercussions for employers. The Income Tax Act prescribes specific penalties and interest charges for delays or inaccuracies in TDS returns.

Late filing fee under Section 234E

First of all, the Income Tax Department imposes a fee of ₹200 per day under Section 234E for delayed filing of Form 24Q. This late filing fee accumulates from the due date until the actual date of submission. However, the total penalty cannot exceed the amount of TDS for which the statement was required to be filed. For instance, if an employer deducts TDS of ₹5,000 and files Form 24Q 109 days late, the calculated penalty (₹21,800) would be capped at ₹5,000.

The late filing fee must be paid before submitting the TDS return. This payment is mandatory regardless of the reason for delay and applies to each Form 24Q filed after the quarterly deadlines.

Penalty under Section 271H

In addition to late fees, Section 271H authorizes the Assessing Officer to impose a more substantial penalty ranging from ₹10,000 to ₹1,00,000. This penalty applies in two scenarios: when Form 24Q is not filed within the prescribed timeframe, or when incorrect information (such as wrong PAN, challan details, or TDS amounts) is provided.

Nevertheless, this penalty may be waived if three conditions are met simultaneously:

1. The tax deducted at source is deposited with the government
2. All late filing fees and interest have been paid
3. The TDS return is filed before one year from the due date expires

Unlike the automatic late fee under Section 234E, the Section 271H penalty is discretionary and imposed after providing the deductor an opportunity to be heard.

Interest for non-deduction or non-payment

Besides penalties, interest charges apply based on specific defaults related to Form 24Q:

• Interest for non-deduction: If an employer fails to deduct TDS, interest at 1% per month or part thereof is levied from the date on which tax was deductible until the actual deduction date.
• Interest for non-payment: When TDS is deducted but not deposited with the government, interest at 1.5% per month or part thereof is charged from the date of deduction until the date of payment.

Significantly, interest is calculated on a monthly basis, with part of a month considered as a full month. This interest must be paid before filing the TDS return and is not allowable as a business expenditure.

Given that Form 24Q specifically deals with TDS on salaries, these penalties and interest provisions help ensure employer compliance with tax deduction and remittance obligations.

Form 24Q vs Form 26Q and other TDS forms

Various TDS forms serve different purposes within the Indian taxation system, each designed for specific types of payments and deductions.

Form 24Q: TDS on salary

Form 24Q exclusively handles TDS deducted from employee salaries under Section 192 of the Income Tax Act. Unlike other forms, it requires two distinct annexures—Annexure I for quarterly reporting and Annexure II for annual salary details submitted only in the fourth quarter. Employers must file this form quarterly, with specific filing deadlines for each quarter (April-June: July 31, July-September: October 31, October-December: January 31, and January-March: May 31).

Form 26Q: TDS on non-salary payments

Form 26Q encompasses TDS on all payments except salaries. This form covers numerous section codes including 193 (interest on securities), 194A (interest other than securities), 194C (contractor payments), 194H (commission), 194I (rent), and 194J (professional services). Apart from covering different payment types, Form 26Q contains only one annexure, contrasting with Form 24Q’s multi-annexure structure.

Form 27Q and 27EQ: Other use cases

Form 27Q manages TDS on payments to non-residents and foreign companies. It applies to various income sources like interest, bonuses, and other sums owed to NRIs. Fundamentally different, Form 27EQ handles Tax Collected at Source (TCS) rather than TDS. TCS applies to specific transactions including alcoholic liquor sales, timber, scrap materials, minerals, and vehicle sales exceeding ₹10,00,000. Both forms follow the same quarterly filing deadlines as Forms 24Q and 26Q.

Key Takeaways

Form 24Q is essential for employers to maintain tax compliance and ensure employees receive proper tax credits for their salary deductions.

• Form 24Q must be filed quarterly by all employers who deduct TDS on salaries exceeding basic exemption limits under Section 192
• Annexure I is required for all four quarters, while Annexure II (complete salary breakdown) is only filed in the fourth quarter
• Late filing incurs ₹200 per day penalty under Section 234E, plus potential ₹10,000-₹1,00,000 penalty under Section 271H
• Electronic filing is mandatory for companies, government officers, and entities with 20+ employees or audited accounts
• Form 24Q differs from 26Q (non-salary TDS), 27Q (NRI payments), and 27EQ (TCS collections) in scope and structure

Accurate and timely Form 24Q filing is crucial as it directly enables the generation of Form 16 certificates that employees need for their individual tax returns, making it a vital link in the tax compliance chain.

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