TDS challan: interest runs from the deduction date, not the due date
The instrument by which deducted tax is deposited with the government, filed on ITNS 281 — and reconciled against the quarterly return.
The Form
Challan ITNS 281, identifying the deductor, assessment year, nature of payment and amount.
The Deadline
Generally the 7th of the following month for salary TDS, with a longer window for March.
Adjustments Are Movements
Record a correction against a challan as a movement, never by editing the original entry.
A TDS challan is how deducted tax is actually paid to the government — challan ITNS 281 for tax deducted at source, identifying the deductor, the assessment year, the nature of payment and the amount.
The due date for salary TDS is generally the 7th of the following month, with a longer window for March.
Late deposit attracts interest calculated from the date of deduction rather than from the due date. That distinction has a sharp practical edge: a delay of only a few days can straddle two calendar months and therefore attract two months of interest, because the interest is charged per month or part thereof.
The challan details must then reconcile with the quarterly Form 24Q. Where amounts or challan identification numbers do not match, the return throws a mismatch and tax credit does not flow through to employees — which turns an internal reconciliation problem into an employee-facing one.
One discipline is worth building in from the start. An adjustment to a previously deposited amount should be recorded as a movement against the challan, never by editing the original entry. Editing history leaves you with a reconciliation that balances but cannot be explained, and challan reconciliation is precisely the exercise where being able to explain each figure is the whole point.
TDS Challan FAQs
When must TDS be deposited?
Generally by the 7th of the following month for salary deductions, with a longer window for tax deducted in March.
How is interest on late deposit calculated?
From the date of deduction rather than the due date, per month or part of a month — so even a short delay can attract interest for two months.
What if the challan does not match the return?
The return throws a mismatch and employee tax credit does not flow. Correct the reconciliation rather than adjusting figures to force a match.
Can one challan cover several months?
Deposits follow their own periodicity and each must be traceable to the period it relates to. Combining months into one payment makes reconciliation against the return harder than the convenience is worth.
We deposited under the wrong section. What now?
Corrections are possible but slow, and until resolved the credit may not map to the deduction. Check the section before paying rather than after the return is rejected.
Why does our challan not match the return?
Usually a difference between what was deducted and what was deposited for the period — an adjustment made in payroll after the deposit, or a late joiner added afterwards.
Stop working this out by hand
Klok applies these rules on every payroll run, from your own attendance and salary data, with the working shown.