Nil return of TDS

Hello, in this post we will be discussing the procedure to file NIL Return of TDS through TRACES and also some questions about NIL return.

TRACES introduced a new system for NIL return filing of TDS from the FY 2014-15. This is applicable for deductors who did not deduct any tax during the relevant quarter. Therefore, did not file any statement for deduction of tax at source u/s 200(3) of the Income Tax Act’1961.

In this system, the deductor has to declare the reason of Non-filing of TDS return for the particular quarter. This, in turn, will help the deductor to be free from the notices which otherwise is sent to the deductor for Non-filing of TDS return for that quarter. It is going to be a big sigh of relief for the deductors, saving of paper, cost and valuable manpower.

What is a NIL Declaration of TDS Statement?

A NIL Declaration is basically a declaration for non-filing of TDS Statements. This declaration is made by those deductors who were not liable to deduct any tax during the relevant quarter. It is also applicable for deductors who have not deducted tax during any quarter and subsequently did not file a TDS Statement U/s 200(3) of the Income Tax Act, 1961 for any quarter.

Is a NIL Declaration mandatory?

As per the Income Tax Act, 1961 and the Income Tax Rules, it is not mandatory to file a NIL TDS Return.

As NIL TDS Return is not mandatory, the TRACES is having a problem distinguishing between:

  1. Deductors required to file the return but not filed the TDS Return.
  2. Deductors not required to file the NIL return.

Therefore, in order to prove that it is not necessary for the deductor to file a TDS Return, it is advisable that the deductor file a NIL Declaration of TDS Statement.

Where to do the declaration for not filing a TDS Statement?

The Declaration for not filing the TDS Statement can be filed by logging into the TRACES Website login given to the deductor.

Procedure for filing the Declaration of not filing a TDS Statement

Procedure for filing the declaration for non-filing of TDS statement is as given below;

Step-1: Login to TRACES deductor login

Step-2: Go to “Declaration for Non – filing of TDS statements” under “Statement/Payments” menu


1.nil return of TDSStep-3: Select the below details from the drop-down menu;

  • Financial year.
  • Quarter.
  • Form type- 24Q, 26Q, 27Q or 27EQ.
  • Reason for non-filing of the statement.

All fields are mandatory to fill. In the Reasons column, the deductor can choose from the following options as shown below:

  • Not liable to deduct for the selected statement period.
  • No Payment made/ Credit to Deductee.
  • Temporarily Business Closed
  • Permanently business closed
  • Payment below a threshold to the deductee
  • Branch Shifted
  • Any other reason

nil return of TDS


  • “Specify the exact reason” field will be mandatory if the user selects “Any Other Reason” in ‘Reason’ drop down.
  • If deductor has permanently closed his business, the deductor should surrender his TAN to the jurisdictional A.O.

Step-4: After giving the reason for non-filing, Click on “Add Statement details”. In the next screen, acknowledge the declaration/certificate. On acknowledgment, the NIL return will be successfully filed.

nil return of TDS

Step-5: The deductor can change back this status from non-filing and can file the return if required at a later stage. This will also be applicable for return which has been wrongly updated for the incorrect period. But change facility is available for only one time for a selected period. To change the status;

  • Go the same option (Statement/Payments -> Declaration for Non – filing of TDS statements). 
  • Statement selected earlier as “Non-Filing” can now be updated by selecting the statement for a given period and click on change filing status. In the next screen, reconfirm the request by clicking the proceed button.

nil return of TDS

Steps of Nil Return filing of TDS in a summary

  • Step-1 Login to TRACES Deductor login with the User ID, Password and TAN of the deductor.
  • Step-2 Go to “Declaration for Non – filing of TDS statements
  • Step-3 Select details from the drop-down menu
  • Step-4 Then, give the reason for non-filing. Next, click on “Add Statement details”.
  • Step-5 Acknowledge the declaration, NIL return will be successfully filed.

Nil Return filing of TDS - TRACES