Monthly TDS payment to the Government

• Every person other than a government office who deducts tax at source, including a listed company

• rule 30(2), Income-tax Rules, 1962read the provision
• section 397(3)(a), Income-tax Act, 2025read the provision
• Income-tax Rules, 2026, G.S.R. 198(E), rule 218(2) (notified text)2026-03-20
• Income Tax Department, Tax Payments FAQ (Income-tax Act 2025 help set), Q7 and Q8
• Income Tax Department tax calendar, FY 2026-272026-05-25

• Get a TAN before you deduct tax.
• Calculate the tax deducted for each month separately.
• Select the regime by the earlier of credit or payment. Use the 1961 Act up to 31 March 2026. Use the 2025 Act from 1 April 2026.
• Keep the deductee PAN for each deduction.

1. 1Open the e-filing portal.
2. 2Select the challan for tax deducted at source.
3. 3Enter the deduction month and the assessment year or tax year.
4. 4Enter the tax, the surcharge and the cess separately.
5. 5Pay the challan.
6. 6Save the challan receipt. You need the challan number for the quarterly statement.

Income Tax Department e-filing portal, e-Pay Tax

Interest runs at two rates and the rates are the same under both regimes. Tax that should have been deducted and was not carries 1% for every month or part of a month from the date it was deductible to the date it is deducted. Tax that was deducted but not paid over carries 1.5% for every month or part of a month from the date of deduction to the date of actual payment. Up to 31 March 2026 that sits in section 201(1A) of the 1961 Act; from 1 April 2026 it sits in section 398(3)(a) of the 2025 Act, which reproduces both rates. The interest has to be paid before the quarterly statement is filed. A failure to deduct also carries a penalty equal to the tax not deducted, under section 271C of the 1961 Act or section 448 of the 2025 Act. Deducting the tax and then not paying it over is prosecutable: rigorous imprisonment of three months to seven years plus a fine, under section 276B of the 1961 Act or section 476 of the 2025 Act, which does not apply if the payment reaches the Government before the statement for it is due.

• Thirty per cent of the payment is disallowed in computing business income where tax on a resident payment was deductible and was not deducted, or was deducted and not paid by the return due date, under section 40(a)(ia) of the 1961 Act or section 35(b) of the 2025 Act. The Department's own worked example: no deduction on ₹5 lakh of professional fees means ₹1.5 lakh disallowed
• The disallowed amount comes back as a deduction in the later year in which the tax is actually paid, so the cost is timing rather than permanent, unlike the interest
• The deductor becomes an assessee in default and the tax is recoverable from it, even though the liability was the payee's
• The unpaid tax and its interest become a charge on all the assets of the deductor
• Where the payee has filed a return, taken the amount into account and paid the tax, the deductor escapes assessee-in-default status on a certificate in Form 26A, but still owes the interest for the period of delay