Income Tax Due Date Alert – Non-Deduction of Tax (July–September 2025)

 

Ensure Compliance Before 31st October 2025!

As the financial year progresses, it is essential for every banking company and financial institution to stay updated with statutory compliance dates under the Income-tax Act, 1961. One such critical deadline is the filing of quarterly returns of non-deduction of tax at source for the quarter ending September 2025 (July–September 2025).

The due date for submission of this return is 31st October 2025. Missing this deadline can lead to non-compliance issues, penalties, and unnecessary complications with the Income Tax Department. Let’s understand this in detail.

🔍 Understanding Non-Deduction of Tax at Source (TDS)

TDS (Tax Deducted at Source) is a mechanism by which tax is collected at the time of payment or credit of income. However, there are specific situations where no TDS is deducted, either due to declarations furnished by the payee or due to the nature of the income itself.

When a banking company does not deduct TDS on certain payments—especially interest on time deposits—it becomes mandatory to report such instances through a quarterly return of non-deduction of tax.

This helps the Income Tax Department monitor compliance and ensure transparency in transactions.

🏦 Who Should File the Return?

The obligation to file this quarterly statement rests primarily with banking companies, co-operative banks, and financial institutions that receive declarations from customers stating that their income is below the taxable limit.

Typically, these declarations are furnished by customers through Form 15G or Form 15H under Section 197A of the Income-tax Act. Based on these forms, banks do not deduct TDS on interest payments.

Once such declarations are received, the bank must report the details in a quarterly return of non-deduction of tax.

📅 Due Date – 31st October 2025

For the quarter ending 30th September 2025 (July to September 2025), the due date for filing the quarterly statement of non-deduction of tax is 31st October 2025.

This report should include all instances of non-deduction for the specified quarter and must be furnished to the concerned Director or Joint Director of Income Tax (Investigation).

Timely filing ensures compliance and helps avoid scrutiny or penalties.

📘 Relevant Legal Provisions

The filing of quarterly returns of non-deduction of tax is governed by provisions under the Income-tax Rules, 1962, and Section 206A of the Income-tax Act, 1961.

According to these provisions:

  • Banks and financial institutions must collect and preserve declarations from customers in Form 15G or 15H.

  • These declarations must then be reported to the Income Tax Department.

  • The return must be filed in a prescribed electronic format within the due date.

Additionally, Form 60 may also be applicable when customers do not have a PAN and submit declarations under Rule 114B.

⚠️ Consequences of Late Filing or Non-Compliance

Failure to furnish the return of non-deduction of tax within the due date can result in the following consequences:

  1. Penalty under Section 272A(2)(f):
    A sum of ₹100 per day for each day of default until the statement is furnished. However, the total penalty cannot exceed the amount of tax deductible.

  2. Scrutiny or Notices from the Income Tax Department:
    Delays in reporting may trigger inquiries, notices, or verification proceedings.

  3. Loss of Credibility:
    Consistent non-compliance can affect a bank’s reputation and its record with the tax authorities.

Thus, timely filing is not just a statutory requirement but also a good business practice.

🧾 Steps to Ensure Timely Compliance

Here are some practical steps to help banking institutions meet the deadline efficiently:

  1. Maintain Proper Documentation:
    Ensure all declarations in Form 15G or 15H are correctly filled, signed, and preserved for audit or inspection.

  2. Verify PAN and Eligibility:
    Confirm that the customer furnishing the declaration is eligible and holds a valid PAN.

  3. Automate the Reporting Process:
    Use accounting or compliance management software to track declarations and generate returns automatically.

  4. Cross-Verify Data:
    Before filing, cross-check interest details, PAN entries, and declaration counts to avoid mismatches.

  5. Consult Tax Professionals:
    Partner with experienced tax practitioners like Taxla Services P. Ltd to ensure accuracy and compliance.

🧮 Role of Tax Professionals

For most financial institutions, managing multiple compliance requirements can be challenging. This is where tax consultants and auditors play a key role.
Professionals help in:

  • Preparing and validating Form 15G/15H declarations,

  • Compiling quarterly returns,

  • Filing accurate and timely reports with the concerned authorities, and

  • Advising on compliance under the Income Tax Act and Rules.

By entrusting this responsibility to experts, banks can focus on their core operations while maintaining full compliance with tax laws.

✅ Conclusion

The quarterly return of non-deduction of tax at source is a crucial compliance requirement for banking companies. The due date—31st October 2025—for the July to September 2025 quarter must be strictly adhered to.

Timely submission helps maintain transparency, avoid penalties, and uphold the credibility of the organization.

At Taxla Services P. Ltd, we assist businesses, banks, and financial institutions with all tax-related compliances, ensuring smooth, timely, and stress-free filing.

📞 Contact us today: +91 7305701454
📧 Email: auditsiva2@gmail.com
🌐 Website: www.taxlaservices.com

#IncomeTaxUpdate #TDSCompliance #NonDeductionOfTax #BankingCompliance #TaxDueDate #TaxFilingInPadi #CBDTUpdate #FinanceProfessionals #TaxlaServices #BestAuditorInTamilnadu



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