Question 1

What is TDS and who deducts it?

Accepted Answer

TDS (Tax Deducted at Source) is income tax collected by the payer before making certain payments. For example, your employer deducts TDS from your salary, a bank deducts TDS on FD interest, and a company deducts TDS on professional fees. The deducted amount is deposited with the government on your behalf.

Question 2

Is TDS a final tax?

Accepted Answer

No. TDS is an advance payment of your income tax. When you file your return, TDS already deducted is credited against your total tax liability. If TDS exceeds your actual tax, you get a refund. If it is less, you pay the balance.

Question 3

What happens if I do not give my PAN?

Accepted Answer

If you do not provide your PAN, the deductor must apply TDS at 20% (or the prescribed rate, whichever is higher), regardless of the normal rate. Providing PAN ensures the lower applicable rate is used and the TDS is linked to your account.

Question 4

Can I avoid TDS on FD interest?

Accepted Answer

If your total income is below the basic exemption limit, you can submit Form 15G (for individuals below 60) or Form 15H (for senior citizens) to the bank. This tells the bank not to deduct TDS on your FD interest. You still need to include the interest income in your tax return.

Question 5

How do I claim TDS credit in my tax return?

Accepted Answer

Your TDS details appear in Form 26AS, which is linked to your PAN. When you file your ITR, enter the TDS amounts from Form 26AS in the relevant section. The tax portal automatically credits TDS deducted and computes any refund or additional tax due.

TDS Calculator

Frequently asked questions

TDS Calculator

Frequently asked questions