Frequently Asked Questions
What is TDS and how is it calculated?
▼
TDS (Tax Deducted at Source) is tax collected by the employer or payer on behalf of the government before paying salary, interest, rent, commission, or professional fees to the recipient. It is calculated as: TDS = Payment Amount × TDS Rate / 100. For salary, TDS is calculated monthly based on projected annual income and applicable tax slabs. For bank interest, it's usually 10% on amounts exceeding ₹10,000 annually. For rent, it's 10% TDS if annual rent exceeds ₹1,80,000. For professional fees and commission, it's typically 10% TDS on payments exceeding the threshold limits.
What are TDS rates for different sections in 2024-25?
▼
TDS Rates for FY 2024-25: Section 193 (Bank Interest): 10% on interest above ₹10,000 annually. Section 194A (Other Interest): 10%. Section 194D (Insurance Commission): 10% above ₹15,000. Section 194H (Commission/Brokerage): 10% above ₹15,000. Section 194J (Professional & Technical Fees): 10% above ₹30,000. Section 194O (E-commerce): 1% if turnover exceeds ₹50 lakh. TDS on salary (Section 192): As per applicable income tax slabs. Important: Rates increase to 20% if PAN not furnished. These rates are subject to change based on government notifications.
How to claim TDS credit in ITR?
▼
TDS credit is claimed in Income Tax Return (ITR) through automatic population from Form 26AS. Process: (1) Login to income tax e-filing portal, (2) View Form 26AS to see all TDS deducted, (3) While filing ITR, TDS details auto-populate in Schedule TDS, (4) Verify all TDS entries match your TDS certificates (Form 16/16A), (5) Credit is automatically adjusted against your total tax liability, (6) If TDS exceeds tax liability, you get refund. Keep Form 16/16A and Form 26AS for verification. No separate form needed for claiming TDS credit - it's auto-calculated during ITR processing. Refunds typically processed within 1-2 months of successful ITR verification.
What is TDS threshold limit?
▼
TDS threshold limits for FY 2024-25: Bank Interest (Section 193): ₹10,000 annually - TDS deducted only on amounts exceeding this. Rent (Section 194I): ₹1,80,000 annually or ₹15,000 monthly. Professional Fees (Section 194J): ₹30,000 in a financial year. Commission & Brokerage (Section 194H): ₹15,000 in a financial year. E-commerce transactions (Section 194O): ₹50 lakh annual turnover. Contractor payments (Section 194C): ₹30,000 for single payment or ₹1,00,000 aggregate. If payment is below these threshold amounts, no TDS is deducted. Resident individuals earning income below basic exemption limit can submit Form 15G/15H to avoid TDS on interest income.
What documents are needed for TDS filing?
▼
Documents required for TDS compliance and filing: (1) PAN of deductor (TAN registration), (2) PAN of all deductees/payees, (3) Form 26AS for verification, (4) Bank account details and challan records, (5) TDS certificates issued - Form 16 for salary, Form 16A for non-salary, (6) Details of all payments made during the quarter, (7) Investment declarations from employees (for salary TDS), (8) ITR acknowledgments (for verification), (9) Monthly TDS deduction records, (10) Digital Signature Certificate (for e-filing). For quarterly TDS filing, use Form 24Q (salary TDS), Form 26Q (non-salary payments to residents), Form 27Q (payments to non-residents). Annual TDS returns due by 31st May. Late filing attracts ₹200/day penalty up to maximum of TDS amount.
What is Form 15G and 15H for TDS?
▼
Form 15G and 15H are self-declaration forms to avoid TDS deduction when your total income is below taxable limit. Form 15G: For individuals below 60 years of age. If your estimated total income for the year is less than the basic exemption limit (₹2.5 lakh for old regime, ₹3 lakh for new regime), you can submit Form 15G to banks/payers to avoid TDS on interest income. Form 15H: Specifically for senior citizens (60 years and above). Same purpose as Form 15G but for seniors. Conditions: Valid only if income below taxable limit, must be submitted before start of financial year or when opening account, valid for one financial year, separate form for each bank/payer, both forms available on income tax website. Penalty for false declaration: Prosecution and penalty possible if declaration is incorrect.
What happens if TDS is not deducted?
▼
Consequences of non-deduction or late deduction of TDS: For Deductor: (1) Interest @1% per month from date of deduction till actual deduction, (2) Interest @1.5% per month from deduction date till payment to government, (3) Penalty under Section 271C - equal to TDS amount, (4) Prosecution under Section 276B - imprisonment 3 months to 7 years, (5) Disallowance of expense under Section 40(a)(ia) - 30% of amount paid. For Deductee: Even if TDS not deducted, you must pay advance tax if liability exceeds ₹10,000. Include income in ITR and pay applicable tax. Can face notice from IT department if income shown in 26AS doesn't match ITR. Best practice: Deduct TDS on time, deposit within 7 days (or 30 days for March), file quarterly returns timely, issue TDS certificates promptly. Use TRACES portal to verify TDS status.
How to get TDS refund?
▼
TDS refund process when TDS deducted exceeds actual tax liability: Step 1: File Income Tax Return (ITR) for the financial year. Step 2: Ensure all TDS entries from Form 26AS are included in ITR. Step 3: If TDS > Total Tax Liability, refund amount will be calculated automatically. Step 4: Verify ITR through Aadhaar OTP, Net Banking, or sending signed ITR-V to CPC Bangalore within 120 days. Step 5: After successful verification, refund processed to bank account linked with PAN. Timeline: Usually 1-2 months for refund credit after verification. If refund not received within 3 months, contact CPC or file rectification request. Refund credited with interest @0.5% per month for delay. Common reasons for delay: Bank account mismatch, incorrect bank details in ITR, pending ITR verification, mismatch between Form 26AS and ITR, outstanding demands from previous years. Check refund status on incometax.gov.in portal.
What is TAN and how to get it?
▼
TAN (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric number required for persons responsible for deducting or collecting tax. Who needs TAN: All entities deducting TDS/TCS - companies, businesses, individuals (if audit required), professionals making payments above threshold. How to apply: Online application at NSDL website (https://www.tin-nsdl.com), Fill Form 49B, Upload documents (PAN, address proof, identity proof), Pay fee ₹65 (online). Processing time: 7-10 working days. TAN Format: 10 characters - 4 letters + 5 digits + 1 letter (e.g., DELM12345A). Uses of TAN: Mandatory for TDS/TCS returns, all TDS/TCS challans, TDS certificates (Form 16/16A), penalty for non-quoting: ₹10,000 under Section 272BB. Note: TAN different from PAN - TAN for TDS compliance, PAN for income tax. Check TAN status on NSDL portal. Correction in TAN: Apply through Form 49B (change/correction request).
Can TDS be deposited online?
▼
Yes, TDS can be deposited online through multiple methods: Method 1 - Net Banking: Login to your bank's net banking, select 'Tax Payment' option, choose 'TDS/TCS' payment, select appropriate challan (ITNS 281), enter TAN, assessment year, payment details, make payment and download challan. Method 2 - NSDL Portal: Visit https://www.tin-nsdl.com, click on 'TDS on Salary' or 'TDS on Non-Salary', enter PAN/TAN and other details, pay via net banking, download challan. Benefits: 24×7 availability, instant confirmation, auto-credit in Form 26AS, no need to visit bank, immediate challan generation. Important: Use correct challan code - 0020 (company), 0021 (non-company). TDS deposit deadline: 7 days from month end (30 days for March). Late payment: Interest @1.5% per month from due date. Keep challan copy for records and TDS return filing. Verify payment in TRACES portal within 3-4 days. Form 26AS updated after 7-10 days of payment.
