TDS Compliance
TDS deduction, deposit, and return filing for salary, rent, professional fees, and contractor payments.
Tax Deducted at Source (TDS) compliance requires food businesses to deduct tax at prescribed rates when making specified payments, including salaries (Section 192), rent exceeding ₹2.4 lakh/year (Section 194I), professional fees exceeding ₹30,000 (Section 194J), contractor payments (Section 194C), and commission (Section 194H). Deducted TDS must be deposited with the government by 7th of the following month (30th April for March) and quarterly TDS returns (Form 24Q for salary, 26Q for non-salary) filed by prescribed due dates. TDS certificates (Form 16/16A) must be issued to deductees. Non-compliance attracts interest, penalties, and disallowance of expenses. Complianceer manages end-to-end TDS compliance for food businesses with employees, rented premises, and professional consultants.
At a glance
- Timeline: Monthly deposit by 7th; quarterly returns per prescribed schedule
- Government fee: Free (interest on late deposit: 1.5% per month; penalty for late return filing: ₹200/day)
- Professional fee: Starting from ₹1,499/quarter
Who needs this
- Restaurants and food businesses with salaried employees requiring Form 16
- Businesses paying rent above ₹2.4 lakh/year requiring TDS on rent (Section 194I)
- Companies paying professional fees to consultants, lawyers, and accountants
- Manufacturers deducting TDS on contractor and transport payments
- Businesses required to deduct TDS on commission to delivery platform partners
Benefits
- Compliance with TDS provisions avoids interest (1–1.5% per month) and penalties
- Form 16/16A issuance maintains employee and vendor relationships
- TDS deduction reduces annual tax liability through advance tax mechanism
- Clean TDS compliance record for tax audits and scrutiny assessments
- Avoid expense disallowance in income tax if TDS not deducted on applicable payments
Eligibility
- TAN mandatory for any entity deducting TDS
- TDS deduction thresholds vary by section. You must track cumulative payments per deductee per year
- Lower/nil TDS certificate (Form 13) from AO exempts deduction if obtained by deductee
Documents
- Employee salary details and PAN for Form 24Q (salary TDS)
- Rent agreement and landlord PAN for TDS on rent (Form 26Q)
- Vendor/consultant invoices with PAN for professional fee TDS
- Contractor payment details for Section 194C TDS
- TAN (Tax Deduction Account Number) allotment certificate
- Previous quarter TDS return copies for continuity
FAQs
Does a small restaurant need TDS compliance?
If you have employees (salary TDS), pay rent above ₹2.4L/year (rent TDS), or pay professional fees above ₹30,000 (professional TDS), TDS compliance is required. TAN needed once any TDS applies.
What is the TDS rate on restaurant rent?
10% TDS on rent (Section 194I) if annual rent exceeds ₹2.4 lakh. Deducted from rent payment and deposited monthly. Landlord receives net rent; TDS credit available in their ITR.
TAN vs PAN: do I need both?
PAN identifies the entity for income tax. TAN (Tax Deduction Account Number) is specifically required for TDS deduction and deposit. Apply TAN when first TDS obligation arises.