What is TDS?
TDS (Tax Deducted at Source) is a mechanism where the payer deducts tax before making a payment and deposits it with the government on your behalf. It applies to salaries, interest, rent, professional fees, and many other payments.
The idea is simple: collect tax at the source of income rather than waiting for the annual return. The deducted amount is credited to your PAN and adjusted against your final tax liability.
Common TDS Rates
TDS on salary is deducted by your employer based on your estimated annual income. Banks deduct 10% TDS on fixed deposit interest above ₹40,000 per year (₹50,000 for senior citizens).
Rent above ₹50,000 per month attracts 5% TDS under Section 194-IB, and professional fees above ₹30,000 per year attract 10% TDS under Section 194J.
How to Check Your TDS
All your TDS is visible in Form 26AS on the income tax portal, and now also in the AIS (Annual Information Statement). Your employer's deductions appear in Form 16, and bank deductions in Form 16A.
Always reconcile Form 26AS with your Form 16 before filing your return. Mismatches are the most common reason for tax notices.
Claiming a TDS Refund
If the TDS deducted exceeds your actual tax liability — for example, because you declared investments late or your income was lower than estimated — you claim the excess as a refund while filing your income tax return.
Refunds are processed after the return is filed and verified, usually within a few months. Use our TDS calculator to estimate your TDS on salary or interest, and our Income Tax calculator to see whether you're due a refund.