{"id":232,"date":"2025-06-18T07:58:16","date_gmt":"2025-06-18T07:58:16","guid":{"rendered":"https:\/\/www.cashweta.co.in\/blog\/?p=232"},"modified":"2025-06-18T07:58:17","modified_gmt":"2025-06-18T07:58:17","slug":"tds-tcs-compliance-small-businesses-2025","status":"publish","type":"post","link":"https:\/\/www.cashweta.co.in\/blog\/tds-tcs-compliance-small-businesses-2025\/","title":{"rendered":"TDS and TCS Compliance for Small Businesses in India: 2025 Edition"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1536\" height=\"1024\" src=\"https:\/\/www.cashweta.co.in\/blog\/wp-content\/uploads\/2025\/06\/image-9.png\" alt=\"\" class=\"wp-image-233\" srcset=\"https:\/\/www.cashweta.co.in\/blog\/wp-content\/uploads\/2025\/06\/image-9.png 1536w, https:\/\/www.cashweta.co.in\/blog\/wp-content\/uploads\/2025\/06\/image-9-300x200.png 300w\" sizes=\"auto, (max-width: 1536px) 100vw, 1536px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Introduction<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are crucial aspects of tax compliance for small and medium-sized businesses (SMEs) in India. Non-compliance can result in hefty penalties, disallowance of expenses, and even legal scrutiny. This 2025 guide by <strong>Makwana Sweta &amp; Associates<\/strong>, trusted <strong>Chartered Accountant in Mumbai<\/strong>, walks you through everything SMEs must know about TDS and TCS.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is TDS?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">TDS is the tax deducted at the point of making specific payments such as salary, contractor payments, rent, professional fees, etc. It ensures tax collection at the source of income.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Applicability for SMEs:<\/strong> If your turnover exceeds Rs. 1 crore (business) or Rs. 50 lakh (profession), you must deduct TDS under various sections such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Section 194C<\/strong>: Payments to contractors<\/li>\n\n\n\n<li><strong>Section 194J<\/strong>: Professional or technical service fees<\/li>\n\n\n\n<li><strong>Section 192<\/strong>: Salary payments<\/li>\n\n\n\n<li><strong>Section 194I<\/strong>: Rent<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>TDS Rate Example (FY 2024-25):<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Professional fees above Rs. 30,000\/year: 10%<\/li>\n\n\n\n<li>Rent above Rs. 2.4 lakh\/year: 10%<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What is TCS?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">TCS is the tax collected by a seller while receiving payment for goods\/services specified under the Income Tax Act, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sale of scrap<\/li>\n\n\n\n<li>Sale of minerals, timber<\/li>\n\n\n\n<li>Sale of goods exceeding Rs. 50 lakh\/year (Section 206C(1H))<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Example:<\/strong> If you sell goods worth over Rs. 50 lakh, 0.1% TCS must be collected on the excess amount.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Key TDS\/TCS Compliance Requirements<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">1. <strong>Obtaining TAN (Tax Deduction and Collection Account Number)<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Every business deducting TDS or collecting TCS must obtain a TAN.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">2. <strong>Timely Deduction &amp; Collection<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">TDS must be deducted <strong>at the time of payment or credit<\/strong>, whichever is earlier. TCS must be collected <strong>at the time of sale or receipt<\/strong>, as specified.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">3. <strong>Deposit of TDS\/TCS<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Due Date:<\/strong> 7th of the following month<\/li>\n\n\n\n<li><strong>Mode:<\/strong> Online through challan ITNS 281<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">4. <strong>Filing of TDS\/TCS Returns<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Returns must be filed quarterly:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>TDS: Form 24Q, 26Q<\/li>\n\n\n\n<li>TCS: Form 27EQ<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">5. <strong>Issuance of Certificates<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>TDS: Form 16 (Salary), Form 16A (Non-salary)<\/li>\n\n\n\n<li>TCS: Form 27D<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">6. <strong>Late Fees &amp; Penalties<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Late filing fee: Rs. 200\/day under Section 234E<\/li>\n\n\n\n<li>Penalty for non-filing: Up to Rs. 1 lakh under Section 271H<\/li>\n\n\n\n<li>Interest: 1%\/1.5% per month for delayed deduction or deposit<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Budget 2025 Updates<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Threshold for TDS on online gaming winnings lowered<\/strong> to Rs. 10,000 per month.<\/li>\n\n\n\n<li><strong>Relaxation for MSMEs<\/strong>: TDS not applicable on delayed payments within 45 days.<\/li>\n\n\n\n<li><strong>Digital payments:<\/strong> UPI and online payments above Rs. 5 lakh may trigger automated TDS alerts.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">(Source: <a href=\"https:\/\/incometax.gov.in\">Budget Highlights 2025 &#8211; Income Tax Department<\/a>)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Practical Tips for Small Businesses<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Automate TDS calculations using accounting software<\/li>\n\n\n\n<li>Set reminders for TDS deposit deadlines<\/li>\n\n\n\n<li>Reconcile TDS with Form 26AS monthly<\/li>\n\n\n\n<li>Outsource compliance to <strong>Tax Consultants Mumbai<\/strong> for accuracy<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Common Mistakes to Avoid<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Not obtaining a TAN before deduction<\/li>\n\n\n\n<li>Incorrect TDS section usage (e.g., applying 194J instead of 194C)<\/li>\n\n\n\n<li>Missing quarterly filing deadlines<\/li>\n\n\n\n<li>Failure to issue TDS certificates<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Role of a Chartered Accountant in Mumbai<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A professional <strong>CA in Mumbai<\/strong> like <strong>Makwana Sweta &amp; Associates<\/strong> helps you:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Determine applicable TDS\/TCS sections<\/li>\n\n\n\n<li>File accurate returns<\/li>\n\n\n\n<li>Avoid penalties<\/li>\n\n\n\n<li>Maintain full audit readiness<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Inbound Link:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.cashweta.co.in\/blog\/advance-tax-guide-india\/\">Understanding Advance Tax<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Outbound Link:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/incometaxindia.gov.in\/pages\/communications\/circulars.aspx\">TDS &amp; TCS Circulars &#8211; Income Tax India<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Final Thoughts<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">TDS and TCS compliance may seem daunting, but with timely actions and expert support, it becomes a smooth process. At <strong>Makwana Sweta &amp; Associates<\/strong>, we ensure that your business meets all statutory requirements with ease.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Need help with <strong>TDS compliance for SMEs<\/strong>? Get in touch with our <strong>Chartered Accountant Services Mumbai<\/strong> team today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are crucial aspects of tax compliance for small and medium-sized businesses (SMEs) in India. Non-compliance can result in hefty penalties, disallowance of expenses, and even legal scrutiny. This 2025 guide by Makwana Sweta &amp; Associates, trusted Chartered Accountant in Mumbai, walks you through &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,34],"tags":[13,25],"class_list":["post-232","post","type-post","status-publish","format-standard","hentry","category-chartered-accountant","category-tax-consultants","tag-accounting-services-in-mumbai","tag-tax-consultants-in-mumbai"],"_links":{"self":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts\/232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/comments?post=232"}],"version-history":[{"count":1,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts\/232\/revisions"}],"predecessor-version":[{"id":234,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts\/232\/revisions\/234"}],"wp:attachment":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/media?parent=232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/categories?post=232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/tags?post=232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}