Prepare your TDS return (26Q) and supplier TDS statements

Turn the TDS you deducted on supplier bills into quarterly 26Q data, record your challans, and send each supplier a statement of the tax you deducted.

When you deduct TDS on supplier bills, Axis keeps every deduction ready for your quarterly 26Q return. You add the challans you paid, check the list for problems, and download the data for the Return Preparation Utility. You can also send each supplier a statement of the tax you deducted from them.

Before you start: you need permission to view accounting reports. Adding or deleting challans needs permission to post accounting entries. Emailing statements also needs permission to send messages from a connected email channel.

Set your TAN and check the TDS sections

  1. Open Invoices & Payments, then Invoice settings → Taxes.
  2. In TDS on supplier bills, enter Your TAN (4 letters, 5 digits and a letter, for example MUMA12345B) and click Save TAN.
  3. Check the sections in the table. Each one shows its normal Rate and its No PAN rate. Click the pencil on a row to change the rate, the thresholds, the Rate without a PAN % or the 26Q section code.

Your business name, address and PAN on the return come from your business profile.

When a supplier has no PAN

Add the supplier's PAN to a PAN field on their record. If there is no PAN field, Axis reads the PAN inside their GSTIN. If neither gives a valid PAN, the bill deducts TDS at the higher no-PAN rate (section 206AA): usually 20%, or 5% for purchase of goods (194Q). The bill shows a note saying so before you issue it. Add the PAN before you issue the bill to deduct at the normal rate.

Record a challan

After you pay TDS to the government (challan 281):

  1. Open Accounting → Reports → TDS → Quarterly return (26Q).
  2. Pick the Financial year and Quarter.
  3. Click Add challan and enter the month the TDS was deducted in, the Date of deposit, the BSR code, the Challan serial no. and the TDS amount. Add interest or late fee if you paid them. Leave Section code blank if one challan covers every section that month.
  4. Click Save.

Each deduction is matched to the first challan of its month (and section, if you gave one). The Challan column under Deductees shows which one.

Check and download the 26Q data

  1. Read the warnings at the top. They point out a missing TAN, months with no challan, a challan smaller than the TDS booked to it, a deposit made after the due date, and suppliers with no PAN.
  2. Click Excel or CSV to download the return data: deductor details, challans and one row per supplier bill, in the column order of the Return Preparation Utility.
  3. Open the file in the Return Preparation Utility, validate it there and generate the file you upload to the income-tax portal.

The return's due date for the quarter is shown at the top (31 July, 31 October, 31 January and 31 May).

Send suppliers their TDS statement

  1. Under TDS statements for suppliers, click PDF next to a supplier to download theirs, or Download all for a zip of every supplier in the quarter.
  2. To email one, click Email, pick the email channel to send from, check the address, and click Send statement.

Good to know

  • The statement Axis prepares is worked out from your books. The legally valid Form 16A is the one you download from TRACES after your return is filed. The statement says this on every page.
  • Axis prepares the data for the Return Preparation Utility. It does not create the upload file itself.
  • Deductions are dated on the day the bill was issued. TDS deducted on an advance before the bill is not included.
  • Lower or nil deduction certificates (section 197) and payments below the threshold are not reported.
  • Only bills in rupees are included. Salary TDS (24Q) is prepared in People → Payroll → Statutory.
  • Axis checks that a PAN has the right shape, not whether it is linked to Aadhaar. Check that on the income-tax portal.