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TDS Calculator 2026 - All Sections, Rates and Thresholds
Tax Deducted at Source for salary, interest, rent, professional fees, contractor payments and more.
PAN vs no-PAN rates, threshold check, net payment. Updated FY 2026-27.
All TDS sectionsPAN vs no-PANThreshold checkNet paymentFY 2026-27
Step 1 - Select payment type (TDS section)
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Section 194J - Professional / technical fees
10% for professionals (doctors, lawyers, CAs, consultants). 2% for technical services. Threshold Rs 30,000 per FY.
With PAN: 10%Without PAN: 20%Annual threshold: ₹30,000
Step 2 - Enter payment details
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₹
Include current payment. TDS applies once cumulative total crosses ₹30,000.
PAN furnished?
TDS Applicable@ 10% (with PAN)
Gross payment
₹1.00 L
TDS deducted
₹10,000
Net you receive
₹90,000
Breakdown
Gross payment₹1.00 L
TDS rate (Sec. 194J)10%
TDS amount deducted-₹10,000
Net payment to payee₹90,000
TDS deposited to govt.₹10,000
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Cost of not furnishing PAN - ₹10,000 extra TDS deducted
With PAN - 10%
TDS: ₹10,000
You receive: ₹90,000
Without PAN - 20%
TDS: ₹20,000
You receive: ₹80,000
Always furnish PAN to the deductor. The TDS is adjustable against your final tax liability when you file ITR, but the higher deduction without PAN unnecessarily ties up your cash flow.
TDS rate chart - all sections FY 2026-27
Click any row to calculate TDS for that section
| Section | Nature of payment | Threshold | With PAN | Without PAN | Notes |
|---|---|---|---|---|---|
| 194A | 🏦Interest (banks / co-ops / post office) | ₹40,000/yr | 10% | 20% | Threshold Rs 50,000 for senior citizens |
| 194B | 🎰Winnings (lottery / crossword / game) | ₹10,000/txn | 30% | 30% | TDS at 30% on every prize above Rs 10,000 |
| 194C | 🔨Payment to contractors / subcontractors | ₹1.00 L/yr | 1% | 20% | 1% for individuals/HUF, 2% for others |
| 194D | 🛡️Insurance commission | ₹15,000/yr | 5% | 20% | TDS at 5% on insurance agent commission exceeding Rs 15,000 in FY |
| 194H | 🤝Commission / brokerage | ₹15,000/yr | 5% | 20% | TDS at 5% on commission/brokerage exceeding Rs 15,000 in a financial year |
| 194I | 🏠Rent (land / building / furniture) | ₹2.40 L/yr | 10% | 20% | 10% on land/building/furniture rent |
| 194IA | 🏘️Purchase of immovable property | ₹50.00 L/txn | 1% | 1% | Buyer must deduct 1% TDS on property purchase of Rs 50L+ |
| 194IB | 🏡Rent paid by individuals (above Rs 50,000/month) | ₹50,000/txn | 5% | 20% | Individuals/HUF paying monthly rent above Rs 50,000 must deduct 5% TDS at year-end or lease termination |
| 194J | 💼Professional / technical fees | ₹30,000/yr | 10% | 20% | 10% for professionals (doctors, lawyers, CAs, consultants) |
| 194Q | 📦Purchase of goods | ₹50.00 L/yr | 0.1% | 5% | Buyer with turnover above Rs 10Cr deducts 0 |
| 194S | ₿Payment for VDA (crypto / digital assets) | ₹10,000/yr | 1% | 1% | 1% TDS on transfer of Virtual Digital Assets exceeding Rs 10,000/year (Rs 50,000 for specified persons) |
Rates as per Finance Act 2025. Surcharge and health and education cess may apply in certain cases. Verify with a CA for specific situations.
TDS in India - Complete Guide for FY 2026-27
Tax Deducted at Source (TDS) is one of the primary mechanisms through which the Indian government collects income tax. Rather than waiting for taxpayers to pay tax at year-end, TDS requires the person making a payment to deduct tax at the source and deposit it with the government immediately. This ensures a steady flow of tax revenue and reduces tax evasion.
TDS applies across a wide range of transactions - salary payments, bank interest, rent, professional and technical fees, contractor payments, commissions, lottery winnings, property purchases, and even cryptocurrency transfers. Each type of payment has a specific section under the Income Tax Act with its own threshold limit, deduction rate, and compliance timeline.
Every TDS deducted is reflected in the recipient's Form 26AS (now replaced by the Annual Information Statement) and can be adjusted against the final income tax liability when filing the ITR. If TDS exceeds actual tax, the excess is refunded to the taxpayer's bank account.
How TDS works - step by step
The TDS mechanism involves three parties: the deductor (the person making the payment), the deductee (the person receiving the payment), and the government. Here is the complete flow from payment to credit.
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Step 1
Payment becomes due
Deductor (payer) is about to make a qualifying payment - salary, rent, fees, interest, or any other TDS-covered payment.
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Step 2
TDS is deducted
Deductor deducts the applicable TDS percentage from the gross amount. The net amount (after TDS) is paid to the recipient.
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Step 3
TDS deposited to govt.
Deductor deposits the TDS amount to the government through Challan 281 by the 7th of the following month (30th April for March).
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Step 4
Credit in Form 26AS / AIS
TDS appears in the deductee's Annual Information Statement. The recipient claims this as advance tax credit when filing their ITR.
Key principle: TDS is not an additional tax. It is an advance collection of income tax that you would owe anyway. When you file your ITR, TDS deducted by all parties during the year is credited against your total tax liability. If TDS exceeds actual liability, the difference is refunded. If it falls short, you pay the balance as self-assessment tax.
Key TDS sections explained - who deducts, when, and at what rate
Below are the most commonly encountered TDS sections in everyday transactions, with practical examples of when they apply and common compliance mistakes to avoid.
Section 192 - TDS on salary
Who deducts
Every employer (individual, company, or government) paying salary to an employee.
Rate
At the applicable income tax slab rate - computed on estimated annual income minus all declared deductions. Not a fixed rate.
Threshold
No threshold. TDS is mandatory on all salary if projected annual tax exceeds Rs 0.
Practical points
+Employee submits Form 12BB at year start declaring regime choice, HRA, investments, and home loan.
+Employer spreads the computed annual tax equally across 12 months of salary.
+In Feb/March, employee submits actual investment proofs and final TDS is adjusted.
+Employer issues Form 16 (Part A + Part B) by 15 June every year.
Common mistake: Not informing your employer about investments or regime choice early in the year leads to higher TDS being deducted. Excess TDS is refunded when filing ITR, but this locks up cash unnecessarily.
Section 194A - TDS on interest income
Who deducts
Banks, NBFCs, cooperative societies, post offices paying interest on FD, RD, savings accounts, or loans.
Rate
10% with PAN. 20% without PAN.
Threshold
Rs 40,000 annual interest from a single bank (Rs 50,000 for senior citizens). The threshold applies to total interest across all branches of the same bank in a financial year.
Practical points
+If your total FD interest from a bank exceeds Rs 40,000, TDS at 10% applies from the first rupee.
+Interest from different banks is calculated separately - opening FDs across multiple banks below Rs 40,000 each avoids TDS per bank.
+Senior citizens (60+) have a higher Rs 50,000 threshold per bank under the same section.
+Submit Form 15G (below 60) or Form 15H (senior citizens) if total income is below taxable limit to avoid TDS.
Common mistake: Not submitting Form 15G/15H at the start of the financial year to every bank where you have deposits. Banks deduct TDS once the threshold is crossed; retroactive Form 15G submission does not recover already-deducted TDS.
Section 194C - TDS on contractor and subcontractor payments
Who deducts
Any specified person (central/state government, local authorities, companies, firms, societies) paying contractors.
Rate
1% for individual/HUF contractors. 2% for company/firm contractors. 20% without PAN.
Threshold
Rs 30,000 per single contract OR Rs 1,00,000 aggregate payments to the same contractor in a financial year.
Practical points
+Applies to payments for work contracts including advertising, broadcasting, catering, transport, manufacturing.
+Transportation contractors who own 10 or fewer goods carriages and furnish a declaration are exempt.
+Payments for material supply contracts where no labour or services are involved may be outside TDS scope.
+Multiple small contracts below Rs 30,000 each but crossing Rs 1 lakh cumulatively trigger TDS on all subsequent payments.
Common mistake: Ignoring the Rs 1 lakh annual aggregate threshold. A company paying Rs 25,000 each quarter (Rs 1 lakh total) to a cleaning contractor must deduct TDS from the 4th quarter payment when the aggregate crosses Rs 1 lakh.
Section 194I - TDS on rent
Who deducts
Any person (other than individual/HUF not subject to tax audit) paying rent for land, building, furniture, or equipment.
Rate
10% for land/building/furniture. 2% for plant/machinery/equipment. 20% without PAN.
Threshold
Rs 2,40,000 per year (Rs 20,000 per month) per payee. If total annual rent paid to one landlord crosses Rs 2.4L, TDS applies.
Practical points
+Applies from the first payment once the annual Rs 2.4L threshold is crossed - not just on the excess.
+Office rent, shop rent, warehouse rent all attract TDS if aggregate exceeds Rs 2.4L per landlord per year.
+Residential rent paid by individuals/HUF is covered separately under Section 194IB if monthly rent exceeds Rs 50,000.
+TDS is deducted at the time of credit to the landlord's account or actual payment, whichever is earlier.
Common mistake: Companies often miss TDS when rent starts mid-year and the partial year amount seems below the threshold. Always project the full-year rent to determine if the annual threshold will be crossed.
Section 194IB - TDS on rent by individuals (above Rs 50,000/month)
Who deducts
Individuals and HUF (not covered by tax audit) paying monthly rent above Rs 50,000 to any person.
Rate
5% of total annual rent (or last month's rent). 20% without PAN.
Threshold
Monthly rent must exceed Rs 50,000 for TDS to be applicable under this section.
Practical points
+TDS is deducted only once a year - either at the end of the financial year or when vacating the property.
+Many salaried employees in premium cities paying Rs 60,000+ monthly rent are unaware of this obligation.
+File Form 26QC (online) to deposit the TDS and generate Form 16C for the landlord.
+Failure to deduct creates TDS liability in the hands of the tenant, not the landlord.
Common mistake: Most individual tenants paying premium rents in cities like Mumbai, Bengaluru, and Delhi are unaware that they are legally required to deduct TDS. Penalties apply for non-deduction.
Section 194IA - TDS on property purchase
Who deducts
Any buyer purchasing immovable property (land or building) worth Rs 50 lakh or more from a resident seller.
Rate
1% of the total consideration (full sale price). Same rate without PAN.
Threshold
Applies when the total property value is Rs 50 lakh or more. The 1% TDS applies on the full amount, not just the excess.
Practical points
+Buyer deposits TDS using Form 26QB within 30 days from the end of the month of payment.
+TDS must be deducted on each instalment payment, not just the final payment.
+The seller gets a Form 16B certificate from the buyer after TDS deposit.
+Does not apply to agricultural land. Applies to residential plots, flats, commercial property.
+If seller is an NRI, Section 195 applies instead with higher TDS rates.
Common mistake: Many first-time buyers are unaware of this obligation. When buying a Rs 70 lakh flat, they must deduct Rs 70,000 (1%) from the payment to the seller and deposit it through Form 26QB. Failure creates liability for the buyer.
Section 194J - TDS on professional and technical fees
Who deducts
Any person (other than individual/HUF not subject to tax audit) paying fees to professionals or for technical services.
Rate
10% for professional services (doctors, lawyers, CAs, engineers, architects, consultants). 2% for technical services (call centres, technical support). 20% without PAN.
Threshold
Rs 30,000 per year per payee. Applies when aggregate payments to a single professional cross Rs 30,000 in a financial year.
Practical points
+Freelancers and consultants receiving payments above Rs 30,000 annually from a client will have TDS deducted.
+Freelancers claim this TDS credit in their ITR; if total tax liability is lower, excess is refunded.
+Companies engaging chartered accountants, doctors (retainer), or legal counsel must deduct 10% TDS.
+Payments for routine technical support (unlike specialised consulting) may qualify for the lower 2% rate.
Common mistake: Clients sometimes classify professional services as technical services to deduct only 2% instead of 10%. This mis-classification creates a shortfall that may be identified in TDS reconciliation.
Section 194S - TDS on Virtual Digital Assets (crypto)
Who deducts
Any person making payment for transfer of Virtual Digital Assets (cryptocurrency, NFTs, gaming tokens).
Rate
1% of consideration. Same rate without PAN (no higher rate for no-PAN, unlike other sections).
Threshold
Rs 10,000 per year (Rs 50,000 for specified persons - exchange or broker). Threshold reduced from Rs 50,000 for general users in Budget 2022.
Practical points
+Applies to P2P crypto transactions as well as transactions through exchanges.
+Exchanges typically handle TDS deduction on behalf of sellers for on-platform transactions.
+For off-exchange P2P transactions, the buyer is responsible for deducting and depositing TDS.
+Even small crypto gains trigger TDS - a Rs 15,000 crypto sale attracts Rs 150 TDS.
+TDS is deducted on gross consideration (sale price), not on gain. If you sold crypto for Rs 1 lakh that you bought for Rs 95,000, TDS is Rs 1,000 (1% of Rs 1 lakh) not 1% of the Rs 5,000 gain.
Common mistake: Many crypto traders are unaware that P2P transactions require them to deduct and deposit TDS. Failure to deduct creates tax liability under Section 201 of the Income Tax Act.
TDS rate chart 2026 - all major sections at a glance
The table below covers TDS rates for the most commonly encountered payment types. For specific calculations, use the interactive calculator at the top of this page.
| Section | Nature of payment | Annual threshold | Rate with PAN | Rate without PAN | Who deducts |
|---|---|---|---|---|---|
| 192 | Salary | No threshold | Slab rate | Slab rate | All employers |
| 194A | Interest (banks / FD / RD) | Rs 40,000 / yr | 10% | 20% | Banks, NBFCs, post office |
| 194B | Lottery / game winnings | Rs 10,000 / prize | 30% | 30% | Lottery organisers |
| 194C | Contractor / subcontractor | Rs 30K / Rs 1L yr | 1% / 2% | 20% | Companies, firms, govt |
| 194D | Insurance commission | Rs 15,000 / yr | 5% | 20% | Insurance companies |
| 194H | Commission / brokerage | Rs 15,000 / yr | 5% | 20% | Companies, firms |
| 194I | Rent (land / building) | Rs 2,40,000 / yr | 10% | 20% | Companies, tax-audited |
| 194IA | Property purchase (above Rs 50L) | Rs 50,00,000 / txn | 1% | 1% | Any buyer |
| 194IB | Rent by individuals (Rs 50K+/mo) | Rs 50,000 / mo | 5% | 20% | Individuals / HUF |
| 194J | Professional / technical fees | Rs 30,000 / yr | 10% / 2% | 20% | Companies, tax-audited |
| 194Q | Purchase of goods | Rs 50,00,000 / yr | 0.1% | 5% | Buyers with >Rs 10Cr turnover |
| 194S | Virtual digital assets (crypto) | Rs 10,000 / yr | 1% | 1% | Any buyer / exchanger |
What happens when PAN is not furnished - Section 206AA
Section 206AA of the Income Tax Act mandates that if the recipient of any payment does not furnish their PAN to the deductor, TDS must be deducted at the higher of: the rate specified in the relevant section, the rate specified in the Finance Act (for that year), or 20%. For most sections, this means the rate doubles or quadruples.
| Section | Normal rate (with PAN) | Rate without PAN | Extra TDS on Rs 1 lakh payment | Impact |
|---|---|---|---|---|
| 194A (bank interest) | 10% | 20% | Rs 10,000 extra | Double deduction on FD interest |
| 194C (contractor) | 1% | 20% | Rs 19,000 extra | 20x increase - huge cash flow hit |
| 194H (commission) | 5% | 20% | Rs 15,000 extra | 4x increase for agents and brokers |
| 194I (rent) | 10% | 20% | Rs 10,000 extra | Double deduction for landlords |
| 194J (professional fee) | 10% | 20% | Rs 10,000 extra | Significant for frequent consultants |
| 194Q (goods purchase) | 0.1% | 5% | Rs 4,900 extra | 50x increase - major for large traders |
Form 15G and 15H - how to avoid TDS when income is below taxable limit
If your total annual income including interest and other sources is below the basic exemption limit (or your total tax liability is zero due to deductions), you can submit a self-declaration form to prevent TDS deduction. These forms must be submitted to every bank or payer separately and must be renewed every financial year.
Form 15G - for individuals below 60 years
Eligibility conditions
+Resident individual below 60 years of age or a HUF
+Total income for the year must be below the basic exemption limit
+Tax on total income must be NIL
+Interest income must be below the basic exemption limit (unlike 15H)
How to submit
→Submit online through your bank's net banking portal
→Submit at every branch where you hold FDs separately
→Submit at the beginning of each financial year (April)
→Keep a copy of the submitted form
Note: Cannot be filed if total interest income across all sources exceeds the basic exemption limit, even if other deductions would bring tax to zero.
Form 15H - for senior citizens (60 years and above)
Eligibility conditions
+Resident individual aged 60 years or above
+Tax computed on total income must be NIL (after all deductions)
+No restriction on the amount of interest income
+Can be filed even if interest alone exceeds Rs 5 lakh, as long as total tax is zero
How to submit
→Submit at every bank branch holding FDs at the start of each year
→Also applicable for post office term deposits and NSC interest
→Available online through most bank portals and the IT e-filing portal
→Penalty of Rs 10,000 under Section 277A for furnishing false declaration
Note: Unlike 15G, Form 15H can be submitted even when interest income exceeds the exemption limit - as long as tax on total income is zero due to deductions like 80C, 80D, and standard deduction.
TDS compliance calendar - deposit and return filing deadlines
Non-compliance with TDS deadlines attracts both interest (1.5% per month for late deposit) and penalties (up to the amount of TDS not deducted or not deposited). TDS returns (quarterly) are separate from TDS deposits (monthly).
TDS deposit deadlines
April to February (monthly)
7th of the following month
April TDS: deposited by 7 May
March (annual)
30 April
March TDS: deposited by 30 April
194IA / 194IB (property/rent)
30th of the following month
Feb payment: deposited by 31 March
Government deductors
Same day as deduction
No grace period for govt offices
TDS return filing deadlines (quarterly)
Q1 (April to June)
Form 26Q / 24Q
31 July
Q2 (July to September)
Form 26Q / 24Q
31 October
Q3 (October to December)
Form 26Q / 24Q
31 January
Q4 (January to March)
Form 26Q / 24Q
31 May
Salary TDS return: Form 24Q. Non-salary payments: Form 26Q. Property TDS: Form 26QB. Rent by individuals: Form 26QC.
Penalties and interest for TDS non-compliance
TDS compliance is non-negotiable for businesses and individuals who fall under the deduction mandate. The penalties for non-compliance are substantial and include both interest charges and flat penalties.
| Violation | Consequence | Section | Amount |
|---|---|---|---|
| Failure to deduct TDS | Interest charged on the TDS amount not deducted | 201(1A) | 1% per month from date TDS was due to be deducted |
| TDS deducted but not deposited | Interest charged on deposited TDS amount | 201(1A) | 1.5% per month from date TDS was deducted to date of deposit |
| Penalty for failure to deduct | Penalty equal to TDS amount not deducted | 271C | Up to 100% of TDS amount (minimum equal to TDS) |
| Late filing of TDS return | Mandatory fee per day of delay | 234E | Rs 200 per day of delay (maximum = TDS amount in return) |
| Incorrect information in TDS return | Penalty for wrong PAN, amount, or section details | 271H | Rs 10,000 to Rs 1,00,000 per return |
| Expense disallowance | 30% of expense disallowed if TDS not deducted | 40(a)(ia) | 30% of payment for which TDS was not deducted |
TDS vs TCS - what is the difference?
TDS and TCS are both advance tax collection mechanisms but they differ in who collects the tax and on which side of the transaction.
TDS - Tax Deducted at Source
+Deducted by the PAYER (the person making the payment)
+Tax is deducted BEFORE payment reaches the recipient
+Covers income payments - salary, interest, rent, professional fees
+Deductor deposits TDS and files quarterly TDS returns
+Recipient claims TDS credit in their ITR
+Most commonly encountered by employees and freelancers
Examples: Bank deducts TDS on FD interest. Company deducts TDS on contractor payment. Employer deducts TDS on salary.
TCS - Tax Collected at Source
+Collected by the SELLER (the person receiving the payment)
+Tax is collected at the time of RECEIVING payment
+Covers certain sale transactions - cars, goods, foreign remittance
+Seller collects TCS from buyer and deposits with government
+Buyer gets credit for TCS in their ITR
+Most commonly encountered when buying cars, remitting money abroad
Examples: Car dealer collects 1% TCS on sale above Rs 10L. Bank collects 20% TCS on LRS remittance above Rs 7L. Tour operator collects 5% TCS on international packages.
Calculate your full income tax for FY 2026-27
New vs old regime comparison with TDS, advance tax, and refund calculation
Frequently asked questions about TDS in India
What is the TDS rate without PAN in India?▼
Under Section 206AA of the Income Tax Act, if the recipient does not furnish their PAN to the deductor, TDS must be deducted at the higher of: the rate specified in the relevant section, the rate in the Finance Act for that year, or 20%. For most sections, this means a flat 20% rate. For example: Section 194A (bank interest) is 10% with PAN but 20% without PAN. Section 194C (contractor) is 1% with PAN but 20% without PAN. Section 194J (professional fees) is 10% with PAN but 20% without PAN. The only exception is Section 194S (crypto) and Section 194IA (property) which apply the same rate regardless of PAN status.
How do I get a refund of excess TDS deducted?▼
Excess TDS is refunded through the ITR filing process. Log in to the Income Tax e-filing portal (incometax.gov.in), check your Annual Information Statement (AIS) to verify all TDS credited to your PAN, file your ITR with the correct income and deductions, compute your tax liability, and if TDS exceeds the computed tax, the difference is shown as a refund. Ensure your bank account is pre-validated on the portal for the refund credit. The Income Tax Department typically processes refunds within 20 to 60 days of successful ITR verification. For faster processing, verify your ITR electronically using Aadhaar OTP immediately after filing.
Is TDS applicable on GST amount?▼
No. TDS under the Income Tax Act is deducted on the base amount excluding GST. If a consultant charges Rs 1,00,000 plus 18% GST (total Rs 1,18,000), TDS at 10% under Section 194J is deducted only on Rs 1,00,000, resulting in Rs 10,000 TDS. This is clarified by CBDT Circular 23/2017. The net payment to the consultant is Rs 1,00,000 minus Rs 10,000 TDS plus Rs 18,000 GST = Rs 1,08,000. GST TDS under Section 51 of the CGST Act (applicable to certain government entities and PSUs) is a separate provision under GST law and should not be confused with Income Tax TDS.
What happens if I miss deducting TDS?▼
Failure to deduct TDS when required triggers Section 201 of the Income Tax Act, making the deductor a defaulter. Consequences include: interest at 1% per month from the date TDS was deductible to the date it was deducted (Section 201(1A)); penalty equal to the TDS amount not deducted under Section 271C; and disallowance of 30% of the expense under Section 40(a)(ia), which increases taxable income. Additionally, prosecution under Section 276B is possible in extreme cases of wilful default. If you discover a TDS default, correct it immediately by deducting from the next payment to the same party and paying interest along with the delayed TDS.
What is Form 26QB and when do I need to file it?▼
Form 26QB is the online TDS return cum challan for Section 194IA - TDS on purchase of immovable property worth Rs 50 lakh or more. As a property buyer, you must: deduct 1% TDS from the payment to the seller, file Form 26QB online on the TIN NSDL portal within 30 days from the end of the month of payment, and download Form 16B (the TDS certificate) from the portal to give to the seller. If you pay the purchase price in instalments, TDS must be deducted on each instalment and Form 26QB filed for each. Failure to file Form 26QB within the deadline attracts interest at 1.5% per month plus a late fee of Rs 200 per day under Section 234E.
I am a freelancer. How does TDS affect me?▼
As a freelancer providing services to businesses, your clients must deduct TDS at 10% under Section 194J if your annual billing to them exceeds Rs 30,000. This TDS is deducted from your invoice amount and deposited by the client. You receive the net amount. When filing your ITR, you declare your full gross income (before TDS) and claim the TDS as advance tax paid. If the TDS exceeds your actual income tax liability (which is common for freelancers with multiple deductions), the excess is refunded. Maintain invoices and track TDS in your Form 26AS to reconcile. If a client fails to deduct TDS, you should still report the full income in your ITR and pay advance tax.
What is the TDS on FD interest and how can I reduce it?▼
TDS on FD interest is governed by Section 194A. Banks deduct 10% TDS if total interest paid or credited to you in a financial year by that bank exceeds Rs 40,000 (Rs 50,000 for senior citizens). The TDS applies on the total interest once the threshold is crossed, not just on the excess. To reduce TDS: submit Form 15G (below 60) or Form 15H (senior citizens) if your income is below the taxable limit; spread FDs across multiple banks so no single bank's interest exceeds the threshold; open FDs in joint names (threshold applies per PAN, so joint FD interest is split); use Senior Citizens Savings Scheme or other non-bank instruments for part of savings. All these are legal strategies.
What is the penalty for filing TDS return late?▼
Section 234E imposes a mandatory fee of Rs 200 per day for each day of delay in filing the TDS quarterly return (Form 26Q or Form 24Q). This fee accrues from the due date until the date of actual filing. The maximum fee under 234E cannot exceed the total TDS amount in the return. Additionally, Section 271H can levy a penalty of Rs 10,000 to Rs 1,00,000 for late filing or filing with incorrect information. Interest under Section 201(1A) at 1.5% per month also applies if TDS deposited was late. These penalties are levied automatically by the TDS reconciliation system; there is no scope for discretion.
Does TDS apply to payments made to NRIs?▼
Yes, TDS on payments to NRIs is governed by Section 195 of the Income Tax Act, not the standard domestic TDS sections. Under Section 195, any person making a payment to a non-resident must deduct TDS if the payment is taxable in India. The TDS rate under Section 195 follows the relevant DTAA (Double Tax Avoidance Agreement) between India and the NRI's country of residence, or the standard rates in the Finance Act (whichever is lower). For common NRI payments: rent from Indian property to NRI landlord attracts TDS under Section 195 at 30% (or DTAA rate). Property purchase from NRI seller also attracts higher TDS than the standard 1% under Section 194IA. NRIs can apply for a lower withholding certificate from the Income Tax Assessing Officer to reduce TDS.
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