Record TDS challans and generate Form 24Q in Zoho Payroll

Table of contents

  1. Perfecting payroll management:  What's new in Zoho Payroll 
  2. A quick recap
  3. What business pain points are we solving?

TDS and Form 24Q in Zoho Payroll

Keeping track of your tax deducted at source (TDS) liabilities is as important as deducting the right amount of tax before paying your employees. Once you've calculated and paid your tax to the government, you have to record payment challans and generate Form 24Q. This form can be generated through your in-house software or through the TDS return filing utility provided by the government. The TDS cycle is complete only if you validate and upload this form on the Tax Information Network website.

We understand that filing your TDS returns each quarter can be a demanding exercise for you and your payroll team. That's why we're introducing TDS liabilities and Form 24Q in Zoho Payroll.

Let's take a look at how these enhancements can make your payroll operations effortless.

Perfecting payroll management: What's new in Zoho Payroll

Premium users of Zoho Payroll can now track TDS liabilities, record multiple payment challans, associate employees with the challan, and generate Form 24Q hassle free. To enable this feature, click View Details on the left pane and select Enable in the pop-up window.

Enable TDS in Zoho Payroll

Prerequisite: You should enable the feature and submit and approve a month's pay run to access the TDS module.

1. Track TDS liabilities

In addition to deducting the right tax amount, Zoho Payroll can help you track the TDS you're liable to pay to the government, view payment challans, and view payment statuses in one place. In the TDS Liabilities section under the Taxes & Forms module, you can view the total amount, period for which you have deducted, and the last date to pay. To provide a holistic view, we have enabled challan-wise and employee-wise TDS details, too.

Track TDS liabilities in Zoho Payroll

Here's a step-by-step guide on how to enable and track TDS liabilities in Zoho Payroll.

2. Record multiple payment challans

Previously, you could record only one payment challan in a month's TDS cycle in Zoho Payroll. We've now built multiple challan recording capabilities to support businesses that pay TDS through multiple challans. We have enhanced this feature by making the challan amount field editable. The total tax liability will no longer be taken as the default challan amount. You can also add interest and penalties, if any, during the creation of challan in Zoho Payroll.

To record multiple tax payments, go to the Challans section in the Taxes & Forms module and select Record Challan.

Record TDS challans in Zoho Payroll

3. Associate employees with challans

Once you've recorded a challan, you can associate employees individually by going to the Unassociated Challans tab, click View Details, and select the Associate Now option from the top banner.

Associate employees with TDS challans

A new tab with employee-wise TDS details will open. There, you can find each employee's breakup of tax, paid, and unpaid tax amounts. Select the employee for whom you want to allocate the challan, and proceed. After the successful allocation of employees, Zoho Payroll will autofill the payment details and display the remaining tax liability, if any.

Tip: If the challan amount exceeds the total liability amount, the system will auto-allocate employees to the challan and the rest of the challan amount can be used for other TDS liabilities.

Click here to learn how you can record and associate TDS payment challans in Zoho Payroll.

4. Generate Form 24Q

The employer or the person who deducted tax from employees' salaries must mandatorily file TDS returns once every quarter by submitting Form 24Q to the Income Tax Department. With Zoho Payroll, you can generate Form 24Q as a text file once all the pay runs for that period are completed and the total TDS liabilities are paid.

To generate this form, go to the Form 24Q module and click View Details. Verify the challan details, TDS amount, and the employer details and click Generate Text File. Once the form has been generated, download the File Validation Utility (FVU) from the Tax Information Network and run the Form 24Q text file through the FVU. On successful validation, a new file in .fvu format will get generated. Upload the newly generated file on the Tax Information Network website and complete your quarterly TDS returns filing process.

Learn more about Form 24Q generation in Zoho Payroll here.

5. Post transaction entries in Zoho Books

Journal entries of tax payments can be posted in Zoho Books if you have enabled integration between your Payroll and Books account. The entries can be posted automatically either through the primary bank account of Payroll or a bank account of your choice.

For businesses that operate out of different branches and have enabled branching in Payroll, transaction entries can be posted based on two criteria:

  • Based on the primary branch in their Zoho Books account.

  • Based on the work location of employees.

A quick recap

TDS liabilities and Form 24Q in Zoho Payroll

What business pain points are we solving?   

Payroll admins, founders, and the decision makers of a company need to be aware of the tax being deducted from their end to ensure business transparency. A comprehensive view of the employee-wise TDS details inside the payroll software enables stakeholders to achieve this transparency. By enabling them to track their liabilities, we're also letting them know if they have an overdue amount.

We also understand that deductors make TDS payments through multiple challans in one given period for various financial reasons and these challan amounts can be lesser than or greater than their actual liabilities. To accommodate such cases, Zoho Payroll is engineered to accept partial payments and excess payments of challans.

  • If the challan amount is lesser than the actual liabilities, the challan will be associated to the employee and the balance amount will be displayed on the TDS Liabilities module.

  • If the challan amount exceeds the actual liabilities, the challan will get auto-allocated to the employees in the TDS cycle and the excess amount can be used for TDS liabilities in subsequent cycles in the same fiscal year.

Generating Form 24Q and filing quarterly TDS returns are the next two steps in keeping your business compliant with the tax laws. To help our customers streamline the filing process, we've built the Form 24Q module inside the software. The software also keeps a copy of all the Form 24Q text files for any future reference.

Spend less time worrying about TDS and focus more on the growth of your business with Zoho Payroll.


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