TDS Payment Due Date: Complete Guide for 2026

If you deduct tax at source from a salary, contractor payment, rent, or professional fee, deducting it is only half the job — the amount has to reach the government's account by a fixed date every month. Miss it, and interest starts running immediately, with no grace period. This guide covers the current due dates, interest and penalty rules, and how the new Income-tax Act, 2025 affects TDS payments from April 2026 onward.

What is TDS Payment?

TDS (Tax Deducted at Source) payment refers to depositing the tax you've deducted from a payment — salary, contractor fees, rent, professional charges — into the Central Government's account. It's a separate step from deducting the tax: you deduct TDS at the time of payment or credit (whichever is earlier), then deposit that amount with the government by the prescribed due date.

Payment is made electronically through the Income Tax Department's e-Pay Tax service on the e-filing portal (incometax.gov.in). Deposits for FY 2025-26 and earlier use Challan ITNS 281, referencing your TAN. For TDS deducted on or after 1 April 2026 (Tax Year 2026-27), deposits use the new Challan ITNS 281N, introduced under the Income-tax Act, 2025.

Who Must Deposit TDS

Anyone who deducts TDS must deposit it — this includes:

• Employers deducting TDS on salaries
• Businesses and professionals deducting TDS on contractor payments, professional fees, rent, commission, or interest
• Companies, LLPs, firms, and proprietorships holding a TAN
• Government offices (which follow a slightly different mechanism, covered below)

If you've deducted any TDS in a month, you must deposit it — there's no minimum threshold below which deposit can be skipped.

Due Date

The standard rule: TDS deducted in a calendar month must be deposited by the 7th of the following month. March is the one exception, where non-government deductors get an extended deadline. This is unchanged under the new Income-tax Act, 2025 regime — the Income Tax Department's own TDS Compliance guidance confirms the same timelines carry forward under Rule 218 of the Income-tax Rules, 2026 (successor to old Rule 30).

Government deductors follow a different rule: TDS deposited without a challan (by book entry/transfer credit) is due the same day it's deducted. If a government deductor deposits via challan instead, the normal 7th-of-next-month rule applies, with 7th April for March deductions.

A note on the Act transition: Whether a payment falls under the Income-tax Act, 1961 or the new Income-tax Act, 2025 depends on when the underlying event (credit or payment, whichever is earlier) occurred. On or before 31 March 2026: the 1961 Act and Challan ITNS 281. On or after 1 April 2026 (Tax Year 2026-27): the 2025 Act and Challan ITNS 281N. The due-date pattern itself is identical on both sides of that line — only the applicable Act, challan form, and some section numbers change.

Always cross-check the exact due date for your tax period on the e-Pay Tax section of incometax.gov.in before paying, since due dates can be extended by CBDT notification in specific circumstances (natural disasters, portal outages, etc.).

Interest and Penalty for Late Deposit

There are two distinct failures under TDS law, and they carry two different interest rates. Don't conflate them:

1. Late deduction (TDS deducted late, after it should have been deducted) Interest is charged at 1% per month or part of a month, computed from the date the tax was deductible to the date it was actually deducted.

2. Late deposit (TDS deducted on time but paid to the government late) Interest is charged at 1.5% per month or part of a month, computed from the date of deduction to the date of actual payment.

These rates are levied under section 201(1A) of the Income-tax Act, 1961. A part of a month counts as a full month, so even a one-day delay attracts a full month's interest. This interest is a mandatory levy — there's no discretion to waive it for a genuine mistake — and it isn't allowed as a deductible business expense.

Disallowance of the expense itself: Separately, under section 40(a)(ia) of the Income-tax Act, 1961, if TDS on certain specified expenses is not deducted, or is deducted but not deposited by the due date (including the extended due date for filing the return), 30% of that expense is disallowed while computing business income for that year. This is on top of the interest charge — it hits your deductible expenses, not just cash flow. Relief exists: if the payee has already reported the income and paid tax on it, the payer may avoid being treated as an "assessee in default," but check this carefully with your tax advisor.

Under the Income-tax Act, 2025: These interest and disallowance concepts continue for TDS from Tax Year 2026-27 onward, but section numbers have been renumbered as part of the Act's restructuring — old section 201(1)/201(1A) is now section 398, and old section 40(a)(ia) is now section 35(b). The interest rates (1% / 1.5% per month) and consequences (disallowance risk, mandatory interest) are unchanged; only the section references moved. Still worth cross-checking against the Act text or a current CBDT notification before citing a section number in a formal filing.

Separately, late filing of the TDS return attracts its own fee under section 234E (₹200/day, capped at the TDS amount) — distinct from, and often confused with, late deposit.

How to Pay

1. Log in to the e-filing portal at incometax.gov.in with your TAN credentials.
2. Go to e-File → e-Pay Tax and create a new challan.
3. Pick the right challan (ITNS 281 for periods up to FY 2025-26; ITNS 281N from Tax Year 2026-27), select the Assessment Year/Tax Year and TDS section code, and enter the tax, surcharge, cess, and interest breakup.
4. Choose a payment mode — net banking, debit card, RTGS/NEFT, UPI, or pay at bank counter — and complete payment.
5. Save the challan receipt (with CIN/challan details); you'll need it for your quarterly TDS return.

Frequently Asked Questions

Q: What happens if the 7th falls on a Sunday or bank holiday?

Don't assume the deadline auto-shifts to the next working day — this can vary. Confirm on the e-Pay Tax portal for your specific due date, and when in doubt, pay a day early.

Q: Is there a threshold below which TDS deposit isn't required?

No. If you've deducted any TDS in a month — even a small amount — it must be deposited by the due date. There's no minimum threshold for the deposit obligation itself (deduction thresholds apply separately, per TDS section, to when TDS must be deducted in the first place).

Q: Can I correct a TDS challan after payment if I made an error?

Minor corrections (assessment year, TAN, amount mismatches) can generally be made via the online challan correction facility on the e-filing portal, subject to conditions. For bank-counter payments, correction requests may need to go through the bank within a limited window. Check the current process on the e-Pay Tax portal, since procedures are updated periodically.

Q: Does paying interest under section 201(1A) protect me from the section 40(a)(ia) expense disallowance?

No — they're independent. Paying interest addresses the delay in tax payment; it doesn't restore deductibility of the underlying expense. The 30% disallowance turns on whether TDS was deducted and deposited by the due date (or the return-filing due date, per relief provisions), not on whether interest was later paid.

Sources

• Income Tax Department – TDS Compliance — confirms the 7th-of-following-month rule, the 30 April due date for March 2026 TDS, and the Act-1961-vs-Act-2025 applicability rule based on date of the taxable event.
• Income Tax Department – ITNS 281N FAQs — confirms Challan ITNS 281N applies to Tax Year 2026-27 onward under the Income-tax Act, 2025, while ITNS 281 continues for earlier years.
• Income Tax Department – e-Pay Tax FAQs — confirms the e-Pay Tax service on the e-filing portal as the current payment mechanism (successor to the old OLTAS/TIN-NSDL e-payment system).
• TaxGuru – Section 201(1A): Interest on late payment of TDS — confirms 1% per month interest for late deduction and 1.5% per month interest for late deposit, and that interest is non-deductible.