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The TDS Payable ledger shows a balance that never clears, and the accountant cannot tell whether the books, the challans or the return are wrong.
Compare three totals per quarter and per section or payment code: books, challans and the filed return. Each difference points to a cause.
TDS Payable ledgers by section or payment code, a challan register with identifiers, and the filed return's deductee summary.
Three totals that agree, with differences explained as not deposited, not reported or posted to the wrong head.
A TDS Payable balance that will not clear usually means one of three things: tax was deducted but not deposited, deposited under the wrong section or payment code, or deposited but not reported in the quarterly return. Check the books, then the challans, then the return, in that order.
Likely causes, by symptom
| Ledger symptom | Likely cause | Record to check | Fix |
|---|---|---|---|
| Balance left after the monthly deposit | Some deductions not deposited | Ledger vs challans for that month | Deposit the shortfall with interest |
| Deposit larger than the ledger | Interest or fee in the same challan; double posting; deduction reversed in books | Challan breakdown | Split interest to its own ledger; reverse duplicates |
| One section’s ledger over, another under | Challan paid under the wrong section or code | Nature of payment on the challan | Challan correction |
| Return total lower than ledger and challans | Deductions not reported | Return deductee details | Correction return |
The three records and what each should show
For each quarter, and each section or payment code:
- Books: total credited to TDS Payable.
- Challans: total deposited, with BSR code, date and serial number for each.
- Filed return: total TDS reported against deductee PANs.
All three should agree. Differences between books and challans are a deposit problem. Differences between challans and the return are a reporting problem.
Worked example
For the quarter:
| Record | Total |
|---|---|
| Books (TDS Payable credited) | ₹1,24,000 |
| Challans deposited | ₹1,20,000 |
| Return (reported) | ₹1,18,000 |
- Books minus challans = ₹4,000 not deposited. Say it is TDS on a June bill booked late. Deposit it now, with interest at 1.5 percent a month or part of a month from the date of deduction under the 1961 Act’s Section 201(1A).
- Challans minus return = ₹2,000 not reported. Say one vendor had no PAN in the master and was left out of the return. Add the deductee in a correction return so the vendor gets the credit.
After both fixes, all three records show ₹1,24,000. Doing the same check section by section, for example ₹80,000 under 194C and ₹44,000 under 194J, shows exactly which ledger holds the gap.
How often should you run the check?
Twice:
- After each monthly deposit, by the 7th: ledger versus challans for that month. Catches the ₹4,000 type gap within weeks.
- Before filing the quarterly return: challans versus the return draft. Catches the ₹2,000 type gap before it is filed.
Running it only at year end means interest has been building for months and vendors are already asking about missing credits.
What to read next
- Next in the series: Monthly and quarterly TDS reconciliation runbook
- TDS quarterly filing reconciliation
- Journal entries for TDS when you pay a vendor
TransactIG reconciles TDS across books, challans and returns, with gaps shown in an exception queue and audit-ready exports. See TDS reconciliation software and reconciliation software for India.