How to File TDS Form 24Q on TRACES: Quarterly Employer Walkthrough for Income Tax Deductions in India 🇮🇳

Form 24Q is India's quarterly TDS return for salary income, filed by employers on the TRACES platform. Employers withhold income tax from employee salaries every month under Section 192 and remit it by the 7th of the following month. Form 24Q consolidates those monthly remittances into a quarterly return filed four times per year. It is also the source data for Form 16 — the annual TDS certificate issued to every employee.

Who Must File

All employers who deduct TDS under Section 192 must file Form 24Q, including Indian companies, foreign companies with employees in India, proprietorships and partnership firms, and government employers. A nil return must still be filed if the employer is registered as a TDS deductor but made no deductions in a quarter.

Step 1: Register a TAN and Activate TRACES

TAN registration: Apply via Form 49B on the NSDL portal (0.5.1) or the Income Tax e-filing portal. NSDL issues a 10-digit TAN within 15 working days.

TRACES activation: Register the TAN at traces.tdscpc.gov.in and activate the account via the email link. All Form 24Q filings use the TAN as the primary identifier.

Step 2: Deduct and Remit TDS Monthly

For each employee each month:

1. Determine the employee's chosen tax regime (new or old — declared annually to the employer).
2. Compute projected annual taxable salary and annual tax liability.
3. Divide annual liability by remaining months in the financial year to get monthly TDS.
4. Deduct from net salary and remit by the 7th of the following month (30 April for March) via Challan 281 on the Income Tax e-filing portal.
5. Retain the challan acknowledgement (BSR code and challan serial number — required for Form 24Q).

Step 3: Prepare Form 24Q Data

For each employee for the quarter:

• Name, PAN, and designation
• Gross salary paid each month in the quarter
• Deductions claimed under the applicable regime
• TDS deducted each month
• Challan details for each monthly remittance (BSR code, serial number, date, amount)

Validate all employee PANs before filing. Invalid or missing PANs trigger a 20% TDS flag and compliance notices.

Step 4: Prepare the Return File Using the RPU

1. Download the latest Return Preparation Utility (RPU) from here.
2. Open the RPU, select Form 24Q, and enter deductor details (TAN, company name, responsible person's PAN).
3. Enter challan details for each monthly payment.
4. Enter per-employee salary and TDS data for the quarter.
5. Validate within the RPU and generate the return file (.fvu format).

Alternatively, payroll software with TDS compliance features (Greythr, Keka, Spine, SAP HR) generates the 24Q file directly from payroll data.

Step 5: Validate via FVU

1. Download the latest FVU (File Validation Utility) from https://www.incometaxindia.gov.in/tax-services/file-validation-utility.
2. Run the .fvu file through the FVU.
3. Correct any errors in the RPU and regenerate.
4. Once the FVU returns "No error," the file is ready for submission.

Step 6: Submit on the Income Tax Portal

1. Log in to incometaxindia.gov.in using TAN credentials.
2. Navigate to "e-File" and select "Income Tax Forms."
3. Select Form 24Q and the relevant quarter.
4. Upload the FVU-validated file and submit.
5. The portal generates a provisional receipt. A final acceptance receipt follows within 3 to 5 working days.

Filing Deadlines

Quarter	Period	Deadline
Q1	April to June	31 July
Q2	July to September	31 October
Q3	October to December	31 January
Q4	January to March	31 May

Step 7: Generate Form 16 from TRACES

After the Q4 return is processed (early June):

1. Log in to TRACES Portal.
2. Navigate to "Downloads" and select "Form 16."
3. Request Form 16 for the financial year — TRACES generates Part A based on 24Q data.
4. Add Form 16 Part B (salary breakup and deductions) from payroll records.
5. Issue the complete Form 16 to each employee by 15 June.

Common Mistakes

1. Not updating TDS calculation mid-year. A salary increment, a new 80C investment, or a regime change must trigger a TDS recalculation. Employers who do not recompute after mid-year changes over or under-withhold, with shortfalls accumulating in Q4.

2. Incorrect challan details in the 24Q return. The BSR code, challan serial number, and amount must exactly match the original challan. A transposed digit causes FVU validation failure. Keep copies of all monthly Challan 281 receipts before filing.

3. Missing employee PANs. Employees without a registered PAN generate a 20% TDS flag. Collect and verify all employee PANs at onboarding and before each 24Q filing.

4. Late Form 16 issuance. Filing Q4 late means Form 16 cannot be generated from TRACES on time, triggering Rs 100/day per-employee penalties.

5. Not reconciling monthly challan totals before filing. The sum of monthly challan payments must equal the total TDS declared in the quarterly return. Any mismatch generates a short-deduction or short-payment notice.

How Cadana Supports Indian Payroll Compliance

Computing monthly TDS under both regimes per employee, generating challan payment data, preparing FVU-validated Form 24Q files, and managing Form 16 generation from TRACES — Cadana's global payroll tax engine handles the full TDS compliance cycle at the API layer.

Book a demo at cadanapay.com/book-demo to see how it works in practice.

Sources and References

• Income Tax Department India — Form 24Q filing guide and e-portal
• TRACES — Form 16 download and TDS certificate portal
• NSDL TIN — RPU and FVU download
• Income Tax Act 1961 — Section 192 (TDS on salaries), Section 203 (Form 16 obligation)
• Income Tax Rules 1962 — Rule 31A (Form 24Q filing and deadlines)

Process current as of April 2026. Verify the latest RPU and FVU versions from NSDL before filing — updates are released regularly.