Monthly TDS/TCS Deduction

• Under TAN compliance, deductors or collectors must deduct or collect tax at source each time a qualifying payment is made—such as salary, rent, professional fees, or sale of goods (in the case of TCS).
  
• This obligation is triggered immediately at the time of payment or credit, whichever is earlier.
  
• Hence, TAN holders must assess and execute TDS/TCS actions throughout the month whenever transactions occur.
  

Deposit of TDS/TCS by 7th of the Following Month

• The tax deducted or collected during the month must be deposited to the Central Government by the 7th of the following month.
  
• For example, tax deducted in April must be deposited by May 7.
  
• For March deductions, the due date for government deductors is April 30, while non-government deductors also follow similar timelines depending on the transaction.
  

Challan Generation and Payment

• The monthly obligation includes generating Challan 281 for each category of TDS or TCS.
  
• The correct section code, nature of payment, and TAN must be quoted.
  
• A separate challan is often required for each type of payment (e.g., contractor fees, salary, rent).
  

Record Maintenance and Ledger Updates

• TAN holders must record all deductions and deposits accurately in their accounting system.
  
• They must maintain a monthly ledger or register of:
  
  • Date of deduction
    
  • Amount deducted
    
  • Date of deposit
    
  • Challan Identification Number (CIN)
    

Prepare for Quarterly Return Filing

• Though TDS/TCS returns are filed quarterly, the monthly deductions and payments form the basis of those returns.
  
• Accurate monthly compliance ensures that quarterly filings (due in July, October, January, and May) are correct and on time, avoiding penalties under Sections 234E and 271H.