In Kerala, a large number of schools, hospitals, charitable trusts, and non-governmental organizations (NGOs) play a vital role in serving communities and driving social impact. While their core focus is on education, healthcare, or welfare activities, many of these institutions often overlook or struggle with one crucial compliance obligation—Tax Deducted at Source (TDS) return filing.
Under the Income Tax Act, 1961, entities such as educational institutions, charitable hospitals, NGOs, and public trusts are also liable to deduct and deposit TDS on specified payments. Non-compliance can lead to financial penalties and loss of credibility. Fortunately, these responsibilities can be efficiently managed with professional support. OurTaxPartner.com provides expert TDS return filing solutions tailored to these sectors in Kerala.
Understanding TDS Obligations for Non-Profit and Service-Based Entities
Many assume that being a non-profit automatically exempts an organization from TDS obligations. That is incorrect. If your institution—whether it’s a school, hospital, NGO, or trust—is making payments subject to TDS under the law, you are legally required to deduct the appropriate tax and file quarterly TDS returns, regardless of your income tax exemption status under Section 12A or 80G.
Key payments that require TDS deduction include:
- Salaries paid to staff (Section 192)
- Professional fees (Section 194J)
- Rent for buildings and equipment (Section 194I)
- Payments to contractors (Section 194C)
- Commission or brokerage payments (Section 194H)
Failing to deduct or deposit TDS, or not filing returns on time, can result in interest, penalties, and denial of expense deductions during assessments—even for charitable organizations.
Unique Compliance Challenges for Kerala-Based Institutions
Kerala’s social landscape includes thousands of private unaided schools, religious and charitable trusts, specialty hospitals, and grassroots NGOs. These entities often operate with limited administrative staff and lack the in-house expertise needed to handle complex tax filing procedures like TDS.
Common challenges include:
- Difficulty understanding changing TDS rules and thresholds
- Manual recordkeeping and errors in PAN or challan data
- Infrequent or inconsistent payment cycles, making deduction tracking hard
- Confusion over TAN registration, return forms (24Q, 26Q), and due dates
- Issues in downloading or issuing TDS certificates (Form 16/16A)
These factors often lead to missed deadlines, mismatches in Form 26AS, or CPC notices. The solution lies in outsourcing the task to a qualified professional team.
Step-by-Step: How TDS Return Filing Works for Institutions
Here is the standard TDS compliance process applicable to schools, hospitals, NGOs, and trusts in Kerala:
- Obtain TAN: Every entity required to deduct TDS must have a valid TAN (Tax Deduction and Collection Account Number).
- Track Payments: Maintain records of all payments made that attract TDS, including professional fees, rent, salaries, etc.
- Calculate TDS: Apply the correct deduction rate under the relevant section based on the nature of payment.
- Deposit TDS: Use Challan ITNS 281 to pay TDS to the government by the 7th of the following month.
- File Quarterly Returns: Submit TDS returns in the prescribed forms (24Q, 26Q) before the due date.
- Generate Certificates: Provide Form 16 or 16A to deductees, downloaded from the TRACES portal.
Need support for any of these steps? OurTaxPartner.com provides full assistance including challan tracking, return filing, and correction handling.
Applicable TDS Return Forms
- Form 24Q: For salary-related TDS (Section 192)
- Form 26Q: For all domestic non-salary payments like rent, contractor fees, and professional services
- Form 27Q: If the institution makes payments to non-residents (rare but applicable in donor-funded NGOs)
Quarterly Due Dates for Filing TDS Returns
| Quarter | Period | Return Filing Due Date |
|---|---|---|
| Q1 | April – June | 31st July |
| Q2 | July – September | 31st October |
| Q3 | October – December | 31st January |
| Q4 | January – March | 31st May |
Penalties for Non-Compliance
Even if your organization operates with a charitable or non-profit intent, failing to meet TDS filing requirements can result in:
- Late filing fee of ₹200 per day under Section 234E
- Penalty between ₹10,000 to ₹1,00,000 under Section 271H
- Interest for delayed deduction or deposit (1% and 1.5% per month)
- Scrutiny of expense claims if TDS was not properly deducted
These penalties can severely impact donor trust, budget planning, and eligibility for government grants or audits.
Why Choose OurTaxPartner.com for Your TDS Compliance?
At OurTaxPartner.com, we understand the specific needs and limitations of non-profits and service institutions in Kerala. Our services are designed to provide accurate, timely, and affordable support for:
- New TAN registration
- Challan and deduction tracking
- Quarterly TDS return filing
- Correction return filing and default resolution
- TRACES portal management and Form 16/16A generation
- Audit response support for CPC or Income Tax queries
We work with private schools, mission hospitals, religious and charitable trusts, and NGOs throughout Kerala—ensuring complete compliance without affecting their core operations.
Conclusion: Focus on Service, Leave Compliance to Us
Running an institution for the greater good shouldn’t mean getting entangled in compliance worries. TDS return filing is a serious responsibility—but it doesn’t have to be a burden. With expert assistance, you can eliminate errors, meet deadlines, and maintain a clean compliance record, which is crucial for your transparency and funding reputation.
Let OurTaxPartner.com be your partner in managing tax compliance so you can focus on education, health, and community development.
Visit www.ourtaxpartner.com/filing-service/tds-compliance/ to learn more and get started today.
