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Form 24Q – Quarterly Salary TDS Return, Due Dates, Annexure I & II and Form 16 Generation

Form 24Q is the quarterly electronic statement of Tax Deducted at Source (TDS) on salary payments — filed by every employer (deductor) under Section 192 of the Income-tax Act, 1961, read with Rule 31A of the Income-tax Rules, 1962 — to the Income Tax Department through the TIN / TRACES portal. Of the four principal TDS returns in the Indian TDS architecture (Form 24Q for salary, Form 26Q for non-salary domestic, Form 27Q for non-resident, and Form 27EQ for TCS), Form 24Q is the most employee-facing — because the data disclosed in Form 24Q directly feeds into each employee's Form 16, Form 26AS, Annual Information Statement (AIS), and ultimately their individual income-tax return. An employer's failure to file Form 24Q correctly and on time therefore does not stay within the employer's four walls — it cascades into employee TDS-credit failures, delayed refunds, ITR mismatches, and CPC-TDS default notices on both sides. Getting Form 24Q right is, in effect, a workforce-level compliance responsibility — not just a tax-department filing exercise.

Form 24Q is structured around two annexures — each serving a distinct disclosure function. Annexure I is filed with every quarter (Q1, Q2, Q3, and Q4) and contains employee-wise details of salary paid and TDS deducted for that particular quarter — deductee PAN, name, employment period within the quarter, gross salary, TDS deducted, deposit challan reference, and other transactional particulars. Annexure II, in contrast, is filed only with the Q4 (January-March) return — and is the comprehensive annual salary reconciliation statement. It captures, for each employee, the full financial-year salary computation — Section 17(1) salary, Section 17(2) perquisites, Section 17(3) profits in lieu, exempt allowances (HRA, LTA, etc.), deductions under Section 16 (standard deduction, professional tax), income under other heads declared to the employer, Chapter VI-A deductions (Sections 80C, 80D, 80G, 80CCD etc.), regime choice (Section 115BAC old vs new), rebate under Section 87A, surcharge, health & education cess, TDS deducted in each of the four quarters, and reconciliation with Form 16 Part B. The Annexure II data is what later enables the TRACES portal to auto-generate Form 16 Part A (TDS certificate) and Form 16 Part B (salary detail) for each employee — which the employer must then download and issue by 15 June of the following financial year.

Our Form 24Q Services cover the full salary-TDS lifecycle — starting from TAN registration and TRACES onboarding for the employer, through monthly salary-TDS computation under Section 192 (with regime choice for each employee, Chapter VI-A deduction capture, perquisite valuation under Rule 3, HRA / LTA / leave-encashment / gratuity exemption calibration, Section 89 relief for arrears, and Section 206AA higher-rate application for no-PAN employees); monthly TDS deposit via ITNS 281 by the 7th of the following month; preparation and filing of quarterly Form 24Q (Annexure I for Q1-Q3, Annexure I + II for Q4) using NSDL / Protean FVU-validated utilities; PAN validation through TIN portal (critical, since wrong PAN invalidates employee TDS credit); Form 24Q upload with DSC authentication; Form 16 generation on TRACES post return acceptance; Part A download (auto-generated TDS certificate) and Part B preparation (salary-detail certificate based on Annexure II); distribution of Form 16 to all employees by 15 June; correction-return filing for PAN errors, amount errors, challan-reference errors, and regime-miscapture issues; defence against Section 234E late-fee (Rs. 200 per day), Section 271H penalty (Rs. 10,000 to Rs. 1,00,000), Section 201 short-deduction interest (1% / 1.5%); and year-round payroll-tax advisory spanning regime changes, new tax-regime default treatment under Section 115BAC(1A), revised investment-declaration handling, mid-year joinees, full-and-final settlement, and ESOP / RSU / sweat-equity perquisite valuation.

Section 192
Salary TDS
4 Quarters
Filing cycle
Annexure I & II
Two-part schema
15 June
Form 16 issue date
Provisions We Work Under
Sec 192 – Salary TDS
Rule 31A
Rule 31 – Form 16
Sec 115BAC – Regime
Sec 206AA – No PAN
Sec 234E – Late Fee
Sec 271H – Penalty
Sec 89 – Relief

Form 24Q — Core Framework at a Glance

Who Files

Applicability

Every employer paying taxable salary — company, LLP, firm, trust, government entity, educational institution, HUF, individual proprietor with employees.

  • Corporate employers
  • Government bodies
  • Trusts / institutions
  • Firms / LLPs
  • Proprietor employers
  • Branch employers
Annexure I

Quarterly Schedule

Filed with every quarter — employee-wise salary paid and TDS deducted for the quarter.

  • Deductee PAN
  • Employee name
  • Employment period
  • Gross salary Q-wise
  • TDS deducted
  • Challan reference
Annexure II

Q4 Reconciliation

Filed only in Q4 — full-year salary computation per employee, Chapter VI-A, regime choice, Form 16 reconciliation.

  • Full-year salary
  • Perquisites & profits
  • Exempt allowances
  • Chapter VI-A
  • Regime choice
  • Final tax / rebate
Due Dates

Rule 31A Schedule

Q1 — 31 July; Q2 — 31 October; Q3 — 31 January; Q4 — 31 May. Monthly TDS deposit — by 7th of following month.

  • Q1 — 31 July
  • Q2 — 31 October
  • Q3 — 31 January
  • Q4 — 31 May
  • Monthly — 7th
  • March — 30 April
Form 16

Employee Certificate

Annual TDS certificate — Part A (TDS data auto-pulled from 24Q) and Part B (salary detail).

  • Part A — TRACES auto
  • Part B — employer prep
  • Issue by 15 June
  • Basis for ITR
  • Employee-facing
  • Rule 31(1)(a)
Filing Mode

Electronic Only

FVU-validated file uploaded through TIN / Protean portal or e-Filing portal — with DSC authentication.

  • FVU validation
  • TIN / Protean upload
  • DSC mandatory (co.)
  • TAN-based login
  • Acknowledgement token
  • PAN validation

Key Form 24Q Concepts at a Glance

Section 192

Slab-Based Salary TDS

Unlike flat-rate Section 194 series, Section 192 TDS is on actual slab tax computed on projected annual salary.

Slab-Based Projection
Section 115BAC

Regime Choice

New regime is default from FY 2023-24; employee must opt for old regime via declaration to employer.

New Default Old Opt-In
Perquisites

Rule 3 Valuation

Rent-free accommodation, motor car, ESOPs, interest-free loans, sweat-equity — all valued under Rule 3.

Rule 3 Sec 17(2)
Exempt Allowances

HRA / LTA Carve-Outs

HRA under Section 10(13A), LTA under Section 10(5), gratuity Section 10(10), leave encashment 10(10AA).

Sec 10 Exemptions
Chapter VI-A

Deduction Declarations

80C (Rs. 1.5L), 80D (health), 80G, 80CCD(1B) NPS — employer captures for old-regime employees.

80C 80D
Section 206AA

No-PAN Higher TDS

Employee without PAN — TDS at higher of slab rate, 20%, or the rate in force; no Section 87A rebate.

20% Min No Rebate
Section 89

Arrears Relief

Where salary arrears are paid, Section 89(1) relief must be claimed through Form 10E and adjusted in 24Q.

Form 10E Arrears
Previous Employer

Form 12B

Mid-year joinee must submit Form 12B so new employer can consolidate salary TDS for correct full-year slab.

Form 12B Mid-Year

What Our Form 24Q Engagement Covers

Set-Up

TAN, TRACES & Payroll Framework

TAN allotment, TRACES registration, DSC setup, payroll-tax framework, and employee master.

  • TAN allotment
  • TRACES register
  • DSC setup
  • Payroll schema
  • Employee master
  • Regime capture
Monthly / Quarterly

Computation, Deposit & Return

Monthly Section 192 computation, ITNS 281 deposit, and quarterly Form 24Q filing.

  • Monthly TDS computation
  • Perquisite valuation
  • ITNS 281 deposit
  • Annexure I prep
  • PAN validation
  • FVU upload
Year-End

Annexure II & Form 16

Q4 Annexure II reconciliation, Form 16 Part A & B generation, and employee distribution.

  • Annexure II build
  • Form 16 Part A
  • Form 16 Part B
  • Employee issuance
  • 15 June delivery
  • Full-year reconciliation

Our Form 24Q Services

01

TAN & TRACES Set-Up

TAN allotment, TRACES registration, DSC setup, and employer-deductor framework onboarding.

02

Monthly Section 192 TDS

Salary projection, regime-wise slab computation, perquisite valuation, and ITNS 281 monthly deposit.

03

Quarterly Annexure I Filing

Q1 / Q2 / Q3 Annexure I prep, PAN validation, FVU generation, and TIN / Protean portal upload.

04

Q4 Annexure II Reconciliation

Full-year salary reconciliation, Chapter VI-A capture, regime finalisation, and Annexure II build.

05

Form 16 Generation

Part A auto-download from TRACES, Part B build, employee-wise distribution by 15 June.

06

Correction Returns

C1 / C3 / C5 correction returns for PAN errors, amount errors, regime errors, and challan fixes.

07

Section 89 / Arrears / Bonus

Section 89 relief computation, Form 10E, arrears treatment, and bonus / variable-pay TDS handling.

08

Default & Notice Defence

Section 234E late-fee, Section 271H penalty, Section 201 interest, and CPC-TDS default notice response.

When You Need Expert Form 24Q Support

First-Time Employer

New company / LLP / firm / startup crossing threshold — TAN, TRACES, Section 192 framework needed.

Regime-Choice Miscapture

Default new-regime treatment under Section 115BAC(1A) but some employees opted old — 24Q fix required.

Mid-Year Hiring

Employee joined mid-year with prior-employer salary — Form 12B consolidation and 24Q disclosure.

ESOP / RSU / Sweat Equity

Perquisite valuation under Rule 3(8) and TDS on exercise / vesting — separate 24Q treatment.

Salary Arrears / Revision

Pay-commission arrears, backdated increments — Section 89 relief, Form 10E, 24Q adjustment.

Q4 Annexure II Build-Up

March-quarter — full-year reconciliation, Chapter VI-A verification, Form 16 preparation.

Late Filing / Default Notice

Section 234E late-fee or Section 271H penalty notice — defence and rectification strategy.

Employee TDS Credit Failure

Employee's Form 26AS missing TDS credit — PAN error, wrong AY, or return-acceptance issue.

Information & Documents Needed

Employer Identity

  • TAN allotment letter
  • PAN of employer
  • TRACES portal login
  • e-Filing portal login
  • DSC credentials
  • Authorised signatory
  • Branch details

Salary & Employee Data

  • Payroll register
  • Employee PAN / Aadhaar
  • Regime-choice forms
  • Investment declarations
  • Rent / HRA proofs
  • LTA / travel bills
  • Form 12B (new joinees)

TDS Deposit & Filings

  • ITNS 281 challans
  • BSR code & CIN
  • Challan serial number
  • OLTAS verification
  • Prior-quarter 24Q
  • Acknowledgement tokens
  • Correction history

Our End-to-End Form 24Q Approach

1

Set-Up / Year Start

TAN / TRACES setup, payroll-tax framework, employee master, and regime capture.

2

Monthly Cycle

Section 192 computation, perquisite valuation, ITNS 281 deposit by the 7th.

3

Quarterly Annexure I

Quarter-wise Annexure I prep, PAN validation, FVU generation, portal upload.

4

Q4 Annexure II

Full-year reconciliation, Chapter VI-A, regime final, Annexure II build.

5

Form 16 & Corrections

Form 16 Part A / B generation, employee issuance, corrections, and default defence.

Why Choose Us for Form 24Q Filing

✓
Senior CA-led team
✓
Payroll / HRIS integration
✓
Regime-choice discipline
✓
ESOP / sweat-equity depth
✓
Section 89 / arrears mastery
✓
PAN validation rigour
✓
Timely Form 16 issuance
✓
Correction / default defence

FAQs on Form 24Q

What is Form 24Q and who must file it?
Form 24Q is the quarterly electronic statement of TDS on salary payments that every employer (deductor) is required to file with the Income Tax Department under Section 192 of the Income-tax Act, 1961, read with Rule 31A of the Income-tax Rules, 1962. The form reports employee-wise particulars — PAN, name, employment period, salary paid, TDS deducted, deposit challan reference — for each quarter of the financial year, and in its Q4 edition additionally includes Annexure II containing the full-year salary computation and reconciliation for each employee. Any entity that pays taxable salary must file Form 24Q — this includes companies, LLPs, partnership firms, proprietorships with employees, trusts, societies, educational institutions, cooperative societies, government departments and PSUs, and even branches / divisions of larger organisations holding their own TAN. The obligation arises from the TAN (Tax Deduction Account Number) held by the employer — every TAN under which Section 192 deductions are made must file its own Form 24Q. Failure to file attracts Section 234E late-fee at Rs. 200 per day (capped at the TDS amount of the return), Section 271H penalty of Rs. 10,000 to Rs. 1,00,000, and Section 201 interest on any TDS default.
What is the difference between Annexure I and Annexure II of Form 24Q?
Annexure I and Annexure II serve two distinct but complementary disclosure purposes within Form 24Q. Annexure I is filed with every quarter (Q1, Q2, Q3, and Q4) and contains employee-wise quarter-specific data — deductee PAN, name, period of employment within the quarter, gross salary paid during the quarter, TDS deducted, deposit challan reference (BSR code, CIN, date), and Section 192 code. Annexure I is essentially the transactional salary-TDS record for the quarter and flows into each employee's Form 26AS credit quarter by quarter. Annexure II, by contrast, is filed only with the Q4 (January-March) return and is the full-year salary reconciliation statement. For each employee, Annexure II captures — Section 17(1) salary; Section 17(2) perquisites (Rule 3 valuation of rent-free accommodation, car, ESOPs, interest-free loans, sweat-equity); Section 17(3) profits in lieu; exempt allowances (HRA, LTA, gratuity, leave encashment); Section 16 standard deduction and professional tax; income under other heads declared to employer (house property loss, etc.); Chapter VI-A deductions (80C, 80D, 80G, 80CCD(1B)); regime choice under Section 115BAC; Section 87A rebate; total tax, surcharge, cess; TDS deducted quarter-wise; and Section 89 relief where applicable. Annexure II data drives Form 16 Part B auto-generation on TRACES.
What are the due dates for Form 24Q filing?
Under Rule 31A of the Income-tax Rules, 1962, Form 24Q is filed quarterly on the following schedule — Q1 (April-June) return is due by 31 July; Q2 (July-September) by 31 October; Q3 (October-December) by 31 January; and Q4 (January-March) by 31 May of the following financial year. The Q4 return carries the additional Annexure II reconciliation, so it is operationally heavier than the other three quarters. These are statutory due dates and are uniform for all deductors regardless of size — CBDT occasionally extends them through Circulars, but such extensions are infrequent and should not be assumed. Separately, the monthly TDS deposit cycle under Section 200 read with Rule 30 is also critical — TDS deducted during any month must be deposited to the Central Government by the 7th of the following month, with the March-month deduction due by 30 April. Missing the monthly deposit triggers Section 201 interest (1% per month for non-deduction, 1.5% for late deposit) and compounds the eventual Form 24Q filing issues. Missing the Form 24Q filing deadline triggers Section 234E late-fee at Rs. 200 per day and potential Section 271H penalty. Employers should treat the quarterly Form 24Q due dates as hard calendar milestones, with a clear cut-off for payroll data freeze typically 10-12 days before the filing date to allow for validation and correction.
How is Form 16 generated from Form 24Q?
Form 16 is the annual TDS certificate issued by an employer to each employee under Section 203 read with Rule 31(1)(a) of the Income-tax Rules, and is generated directly from the data filed in Form 24Q through the TRACES portal. The form has two parts with distinct generation mechanics. Part A contains the employer's TAN and PAN details, employee's PAN, employment period, quarter-wise summary of salary paid and TDS deducted, and deposit challan references. Part A is auto-generated and downloaded from TRACES only after all four quarterly Form 24Q returns for the financial year have been filed and accepted — it essentially aggregates the Annexure I data across the four quarters. Part B is the detailed salary-computation certificate — Section 17(1) salary, perquisites, profits in lieu, exempt allowances, Section 16 deduction, Chapter VI-A deductions, regime choice, tax computed, TDS deducted, Section 89 relief. Part B draws from the Annexure II data filed in Q4. From FY 2018-19 onwards, TRACES provides auto-generation of Part B as well (based on Annexure II), though employers can also prepare Part B separately using payroll / TDS-utility software. Under Rule 31(3), employers must issue Form 16 to each employee by 15 June of the year following the financial year. Delay in issuance of Form 16 attracts Rs. 100 per day penalty under Section 272A(2)(g) subject to the cap, and triggers employee complaints and ITR-filing delays.
What happens if Form 24Q is filed late or contains errors?
Late filing or erroneous filing of Form 24Q carries multi-layered consequences for the employer. Late filing attracts Section 234E mandatory late-fee of Rs. 200 per day from the day after the due date until actual filing — capped at the total TDS amount the return pertains to, and payable before filing the return (else upload is rejected). In addition, Section 271H penalty of Rs. 10,000 to Rs. 1,00,000 is leviable for failure or late filing — this is discretionary and requires a Section 274 show-cause notice; the "no penalty" escape is available under the second proviso if the TDS was paid, the late-fee / interest was paid, and the return was filed within one year of the original due date. Errors in a filed Form 24Q — wrong PAN (the most common and most consequential, since it blocks employee Form 26AS credit), wrong amounts, wrong challan references, incorrect regime capture, or missing employees — are corrected by filing a "correction return" on the TRACES portal using C1 / C3 / C5 correction types. Correction returns are filed against the original Token Number and typically process within 7-10 working days, after which corrected data flows into Form 26AS. PAN correction is the highest-priority fix because wrong PAN causes immediate employee complaints, blocked refunds, and ITR mismatches. Additionally, under Section 201, the employer is treated as "assessee-in-default" for any TDS that was required but not deducted / deposited, with 1% / 1.5% monthly interest, and under Section 40(a)(ia) certain expenses claimed in the employer's own income computation may be disallowed if TDS compliance fails.
How does the regime choice under Section 115BAC affect Form 24Q?
The tax-regime choice — old regime versus new regime under Section 115BAC — has a significant bearing on Form 24Q because the regime directly affects how Section 192 TDS is computed, which Chapter VI-A deductions are allowed, and what Annexure II captures. From Financial Year 2023-24 onwards, the new regime is the default regime under Section 115BAC(1A); an employee who wishes to opt for the old regime must submit a specific regime-choice declaration to the employer at the start of the FY (usually April). In the absence of such declaration, the employer is obliged to compute Section 192 TDS under the new regime — which has wider slabs, Section 87A rebate up to Rs. 7 lakh taxable income (with marginal relief), but disallows most Chapter VI-A deductions except Section 80CCD(2) employer NPS contribution, Section 80CCH(2) Agniveer, and a few others. Employees who opt for the old regime retain the benefit of Section 80C, 80D, 80E, 80G, 80CCD(1B), HRA, LTA, standard deduction, and other old-regime benefits — but at the cost of narrower slabs. The regime choice is captured in Annexure II, flows into Form 16 Part B, and is subsequently visible in the employee's ITR. Once an employee with business / profession income opts out of the new regime, they cannot re-opt in except once in their lifetime (different rule for salaried employees — they can switch regimes year-on-year). Employers must obtain the regime declaration at the start of the FY, keep it on file, apply it consistently through the year, and capture it correctly in 24Q Annexure II — miscapture is one of the commonest causes of employee TDS disputes and ITR mismatches.
What should an employer do if an employee's PAN is invalid or missing?
An invalid or missing employee PAN creates serious downstream problems for both the employer and the employee, and needs proactive handling. Under Section 206AA of the Income-tax Act, where a deductee (employee) fails to furnish his PAN, TDS must be deducted at the higher of — (a) the rate specified in the Act or rules, (b) the rate in force, or (c) 20%. For salaried employees, this means TDS is deducted at a minimum of 20% on the taxable salary, without the benefit of Section 87A rebate or the basic exemption threshold — a substantial over-deduction. Additionally, a wrong or invalid PAN in Form 24Q causes the employee's TDS credit to not reflect in Form 26AS / AIS, making it impossible for the employee to claim the TDS in their ITR — triggering employee complaints and legal exposure for the employer. Recommended employer process — at onboarding, collect the employee's PAN along with Aadhaar linkage status, verify PAN validity through the TIN portal's PAN-verification facility, and block payroll activation until PAN is validated. For existing employees with invalid / unlinked PANs (especially post the Aadhaar-PAN linking regime), issue a formal notice to correct the PAN within a specified period, and deduct 20% TDS under Section 206AA in the interim. If an employee later provides a valid PAN, the employer cannot retroactively re-classify past-quarter TDS at the lower rate — but the wrong-PAN Form 24Q records must be corrected via TRACES correction returns to re-route the TDS credit correctly. The regime-default under Section 115BAC also mandates that no-PAN / invalid-PAN employees are further disadvantaged, since Section 87A rebate is denied where TDS rate is governed by Section 206AA.
Can Form 24Q be revised after filing?
Yes — Form 24Q can be revised (technically referred to as "correction return" or "revised TDS statement") after the original filing, through the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal using specified correction-type codes. The correction mechanism is essential because PAN errors, amount errors, challan-reference errors, wrong employment periods, and missing employees are common in an originally-filed return, and each type of error has its own correction pathway. Correction types include — C1 (correction of deductee details — PAN, name, amount, deduction particulars); C3 (addition or deletion of deductee records, with or without challan updates); C5 (correction of PAN for existing deductees — the most common correction due to wrong-PAN causing employee TDS credit failures); and specialised corrections for challan reference, tax deducted amount, and section-code modifications. Corrections are filed using the same FVU (File Validation Utility) framework as original returns, uploaded through the TIN / Protean portal or TRACES portal, and processed against the original return's Token Number. Processing typically takes 7-10 working days, after which the corrected data flows into Form 26AS and the employee's AIS. Correction returns can be filed multiple times against the same original return, and the Income Tax Department generally permits corrections within a reasonable window — though certain correction types (particularly C9 for adding missed deductees / challans) are restricted under the current regime. Where an error is discovered after Form 16 has already been issued, the employer should file the 24Q correction return, download the revised Form 16 from TRACES, and reissue the corrected Form 16 to the affected employee with a covering communication.

Every Salary Slip Captured. Every Form 16 Delivered. Every Return Closed Clean.

Partner with our CAs for end-to-end Form 24Q Services — TAN / TRACES onboarding, monthly Section 192 computation, quarterly Annexure I, Q4 Annexure II reconciliation, Form 16 generation, corrections, and default defence.

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