Tax Deducted at Source (TDS) – Complete Guide for FY 2025–26

What is TDS?

Tax Deducted at Source (TDS) is a system under the Income Tax Act, 1961, where tax is collected at the time income is earned. This helps the government receive tax payments periodically instead of waiting for year-end returns.

When you earn income—like salary, interest, rent, professional fees, or commission—a certain percentage is deducted by the payer and deposited with the government using your PAN (Permanent Account Number).

TDS Example:📌

If you earn ₹60,000 interest from a fixed deposit, your bank may deduct ₹6,000 (10%) as TDS and credit ₹54,000 to your account.

Why is TDS Important? 💡 

TDS improves compliance and ensures timely collection of taxes. Here's how:

Where is TDS Applicable?📍 

TDS applies to multiple income types. Here are key sections of the Income Tax Act where TDS is mandatory:

TDS Rates and Thresholds (FY 2025–26) 📊 

Note - If PAN is not provided, TDS is deducted at a flat 20%, irrespective of the regular rate.

Responsibilities of a TDS Deductor✍️ 

If you are required to deduct TDS (e.g. employer, tenant, buyer), your duties include:

✅ Deduct TDS at the applicable rate

✅ Deposit the amount to the government by the 7th of the next month

✅ File quarterly returns: Form 24Q (salary), 26Q (non-salary), or 27Q (non-resident)

✅ Issue TDS Certificates:

• • Form 16 – For Salary
  • Form 16A – For Interest/Commission
  • Form 16B – For Property Purchase
  • Form 16C – For Rent

❌ Failure to comply results in penalties, interest, and possible disallowance of expenses under the Income Tax Act.

How to Check TDS Deducted 🔍 

You can verify if TDS has been deducted and deposited on your behalf using:

✅ Form 26AS

• Available on the Income Tax e-filing portal
• Shows all TDS credits, refunds, and advance taxes linked to your PAN

✅ TRACES Portal

• View and download official TDS certificates
• Reconcile discrepancies in deductions vs. actual payments

How to Claim a TDS Refund 💸

If TDS has been deducted in excess of your liability, you can claim a refund by:

1. Filing your Income Tax Return (ITR)
2. Verifying your return
3. Receiving the refund in your linked bank account post-assessment

✔️ Example:

If your income for the financial year is ₹2.4 lakh and TDS of ₹6,000 was deducted, you are eligible for a full refund after ITR filing.

Pro Tips to Manage TDS Smartly 🧠

✅ Submit Form 15G or 15H (senior citizens) to banks to prevent TDS if income is non-taxable

✅ Update PAN with all financial institutions

✅ Link PAN with Aadhaar to avoid higher deduction

✅ Track your tax credits using Form 26AS

❌ Don’t delay TDS return filing or issuing Form 16

Useful Government Resources 🔗 

• Income Tax India Portal
• TRACES TDS Reconciliation Portal
• Form 26AS Help Guide

Final Thoughts from Piramal Finance 🧩

Understanding TDS gives you more control over your money and taxes. It helps avoid:

• Unwanted deductions
• Refund delays
• Legal complications

Whether you are a salaried employee, freelancer, landlord, or investor, staying compliant with TDS provisions helps you make smarter financial decisions.

At Piramal Finance, we are here to simplify your financial journey—from tax planning to wealth management.

Frequently Asked Questions (FAQs)

1. Is TDS applicable even if my income is below the taxable limit?

Yes. However, you can submit Form 15G or 15H to avoid deduction if your total income is below the exemption limit.

2. How can I check if TDS has been deducted?

Use:

• Form 26AS via the e-Filing portal
• TRACES portal to view and download TDS certificates
  Ensure your PAN is linked to all your income sources.

3. What happens if I don’t provide a PAN?

The deductor will apply a flat 20% TDS rate, even if the normal rate is lower.

4. What are the due dates for TDS payments and filings?

• Deposit TDS: By 7th of the next month
• Quarterly TDS Returns:
• Q1: 31st July
• Q2: 31st October
• Q3: 31st January
• Q4: 31st May

5. How is TDS different from advance tax?

• TDS: Deducted by the payer (e.g. employer, bank)
• Advance Tax: Paid directly by the taxpayer if annual liability exceeds ₹10,000

6. What do I need to claim a TDS refund?

• PAN
• Form 16 / 16A / 26AS
• Bank account details
• Income & deduction records for the financial year

7. Can TDS be adjusted against my total tax due?

Yes. It is treated as advance tax paid and is adjusted when you file your ITR.

8. What's the difference between Form 15G and Form 15H?

• Form 15G: For individuals under 60 with no taxable income
• Form 15H: For senior citizens whose income is below the exemption threshold
  Both prevent unnecessary TDS deductions.