What is TDS and why is it deducted?

Tax Deducted at Source is a mechanism where the payer deducts tax before making payment. The deductee claims the TDS as credit against final tax liability. Purpose: ensure tax collection at source, reduce evasion.

What are the key TDS rates?

Salary (192): per slab. Interest bank (194A): 10% if interest exceeds 40,000 per year. Dividend (194): 10% if dividends exceed 5,000. Rent (194I): 10% land/building above 2.4L, 2% plant/machinery. Professional fees (194J): 10% (2% technical services).

What happens if PAN is not provided?

If the deductee does not provide PAN, TDS must be deducted at 20% or the applicable rate, whichever is higher. This is a strong incentive for all payees to provide PAN to the payer.

How is TDS deposited and reported?

TDS must be deposited with the government by the 7th of the next month (except March: April 30). Quarterly TDS returns (24Q for salary, 26Q for non-salary) must be filed. Deductees receive Form 16/16A.

What is Section 206AB higher TDS?

From 2021, a higher TDS rate applies for specified persons who have not filed ITR for 2 prior years AND had TDS/TCS above 50,000. Rate: higher of twice the applicable rate or 5%. Does not apply to salaried employees.

India TDS Deduction Rates Calculator (All Sections)

Calculate TDS (Tax Deducted at Source) under all sections: Salary (192), Interest bank (194A 10%), Dividend (194 10%), Rent (194I 10%/2%), Professional fees (194J 10%/2%). Higher TDS if no PAN: 20%.

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Frequently Asked Questions

What is TDS and why is it deducted?

What are the key TDS rates?

What happens if PAN is not provided?

How is TDS deposited and reported?

What is Section 206AB higher TDS?