How to File Nil TDS Return: Step-by-Step Guide

A nil TDS return is a quarterly return filed when you hold a valid TAN but did not deduct any tax at source during that quarter. Filing it is mandatory under the Income Tax Act, 1961, even if you made zero transactions. Skipping it attracts a late fee of Rs. 200 per day under Section 234E. The return is filed through the TRACES portal or the Income Tax e-filing portal using Form 24Q for salary or Form 26Q for non-salary payments. Whether you are a startup, a private limited company, or a sole proprietor, this guide walks you through every step of how to file a nil TDS return, the correct forms to use, applicable deadlines, and what happens if you miss them.

What Is a Nil TDS Return?

A nil TDS return is a quarterly compliance filing that declares you had no tax deductions at source during the period. It is not an optional filing. Any entity registered with a TAN (Tax Deduction and Collection Account Number) is legally required to file TDS returns every quarter, including quarters with no activity.

For example, a newly incorporated private limited company that has not yet started paying salaries must still file Form 24Q as a nil return for those quarters.

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Who Must File a Nil TDS Return?

Any deductor who has been allotted a TAN must file a TDS return every quarter, regardless of whether deductions were made. This includes:

• Private limited companies
• LLPs and partnership firms
• Sole proprietors with a TAN
• Trusts and associations
• Any business that registered for TAN for a one-time contract but has no ongoing transactions

There is no provision to “skip” a quarter simply because there was no deduction. If you have a TAN, the obligation to file stands.

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What Are the Nil TDS Return Due Dates for FY 2025-26?

Missing the due date means penalties begin accruing immediately. Here are the filing deadlines for non-government deductors:

Quarter	Period	Due Date
Q1	April to June	31st July 2025
Q2	July to September	31st October 2025
Q3	October to December	31st January 2026
Q4	January to March	31st May 2026

Government deductors have a due date of the 31st of the month following the end of the quarter for Q1 to Q3, and 15th May for Q4.

Mark these dates. The Rs. 200 per day fee under Section 234E starts from the day after the due date.

How to File a Nil TDS Return: Step-by-Step Process

Filing a nil TDS return involves offline preparation and online submission. Here is the exact process:

Step 1: Log in to the TRACES Portal Visit traces.gov.in and log in using your TAN, PAN, and registered credentials.

Step 2: Download the RPU Software Download the Return Preparation Utility (RPU) from the TRACES or NSDL website. This is a free Java-based tool used to prepare your return file.

Step 3: Prepare the Nil Return Open the RPU, select the appropriate form (24Q or 26Q), enter your TAN details, and fill in the quarter and financial year. Since there are no deductions, you will not add any deductee records. Save the file.

Step 4: Validate with FVU Download the File Validation Utility (FVU) and run your prepared file through it. If there are no errors, the FVU generates a validated .fvu file.

Step 5: Upload on the Income Tax Portal Log in to incometax.gov.in, go to the TDS section, and upload the validated file. After a successful upload, download the acknowledgement receipt (PRN number).

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Which Form Should You Use for a Nil TDS Return?

Choosing the wrong form is one of the most common errors. Here is a quick reference:

Form	Used For
Form 24Q	TDS on salary payments
Form 26Q	TDS on non-salary domestic payments
Form 27Q	TDS on payments to non-residents
Form 27EQ	Tax Collected at Source (TCS)

Most startups and SMEs with no salary disbursals in a given quarter will file Form 26Q as a nil return.

What Is the Penalty for Not Filing a Nil TDS Return?

Two penalty provisions apply to late or non-filing:

Section 234E: A late filing fee of Rs. 200 per day is charged from the due date until the return is filed. This fee cannot exceed the total TDS amount for the quarter.

Section 271H: The Assessing Officer can impose an additional penalty ranging from Rs. 10,000 to Rs. 1,00,000 for failure to file or for filing an incorrect return.

These are statutory penalties, not estimates. Even a one-month delay on a nil return can accumulate to Rs. 6,000 in late fees under Section 234E alone.

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How Bharat Comply Supports Your TDS Compliance

Bharat Comply works with startups, SMEs, and entrepreneurs across India to handle TDS return filing, GST compliance, and other regulatory requirements, so business owners can focus on growth rather than government portals.

From preparing your RPU file and validating it through FVU to uploading the return and generating the acknowledgement, Bharat Comply provides end-to-end filing support with accurate, timely submissions every quarter.

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Need help filing your nil TDS return? Contact Bharat Comply today and let our compliance team handle it for you, every quarter, on time.

Frequently Asked Questions

Q1: Is it mandatory to file a nil TDS return if I made no payments during the quarter?

Yes. Any entity with a valid TAN must file a TDS return every quarter, including quarters with zero transactions or deductions. Non-filing attracts a late fee under Section 234E.

Q2: What is the late fee for not filing a nil TDS return on time?

Under Section 234E, a fee of Rs. 200 per day applies from the due date until the return is filed, subject to a maximum of the total TDS amount for the quarter. Section 271H allows an additional penalty of Rs. 10,000 to Rs. 1,00,000.

Q3: Which form do I use to file a nil TDS return for a company with no salary payments?

Use Form 26Q for non-salary domestic payments and Form 24Q for salary-related TDS. If there were no salary disbursals, a nil Form 24Q must still be filed for those quarters if the company holds a TAN.

Q4: Can I file the nil TDS return fully online?

The return is prepared offline using the RPU tool and validated using the FVU, then uploaded online through the Income Tax e-filing portal. It is a two-step process combining offline preparation with online submission.

Q5: Can a nil TDS return be revised after it has been filed?

Yes. A nil TDS return can be corrected through a correction statement on the TRACES portal if you later identify transactions that were missed. Filing accurately at the outset avoids the additional effort of corrections.