What are the main TDS sections and their rates?

Key TDS sections: Section 192 (salary — at applicable slab rate), Section 194C (contractor payments — 1% for individuals/HUF, 2% for others, threshold ₹30,000 per payment or ₹1 lakh aggregate), Section 194J (professional/technical fees — 10%, threshold ₹30,000), Section 194H (commission/brokerage — 5%, threshold ₹15,000), Section 194I (rent — 10% for land/building, 2% for plant/machinery, threshold ₹2.4 lakh per year), Section 194A (interest other than bank — 10%, threshold ₹5,000).

What happens if TDS is not deducted or deposited?

If TDS is not deducted, the payer is treated as an assessee-in-default under Section 201. The payer must pay the TDS amount plus interest at 1% per month from the date it was deductible to the date of deduction, and 1.5% per month from the date of deduction to the date of deposit. Additionally, 30% of the payment on which TDS was not deducted is disallowed as a business expense under Section 40(a)(ia).

How does TDS credit appear in the taxpayer's return?

TDS deducted by the payer is deposited to the government against the deductee's PAN using Challan 281. It appears in the deductee's Form 26AS and AIS. When filing ITR, the deductee claims this TDS as a credit against their total tax liability. If TDS exceeds the tax liability, the excess is refunded by the Income Tax Department after processing the return.

TDS (Tax Deducted at Source) — Meaning, Rules & Tax Impact | RushTax

Key TDS Sections and Rates

Section 192 — Salary: Deducted at the applicable income tax slab rate. No threshold — TDS applies if estimated annual salary exceeds the basic exemption limit (₹3 lakh under new regime, ₹2.5 lakh under old regime).
Section 194C — Contractor/Sub-contractor: 1% for individuals/HUF, 2% for others. Threshold: ₹30,000 per payment or ₹1 lakh aggregate in a financial year.
Section 194J — Professional/Technical Services: 10% for professional services (doctors, lawyers, engineers, consultants). 2% for purely technical services. Threshold: ₹30,000 per year.
Section 194I — Rent: 10% for rent of land, building, or furniture. 2% for rent of plant, machinery, or equipment. Threshold: ₹2.4 lakh per year.
Section 194H — Commission/Brokerage: 5%. Threshold: ₹15,000 per year.
Section 194A — Interest (non-bank): 10%. Threshold: ₹5,000 per year. For bank interest (194A), threshold is ₹40,000 (₹50,000 for senior citizens).

TDS Deposit and Return Filing

TDS deducted must be deposited to the government by the 7th of the following month (for March deductions, by April 30). Deposit is made via Challan 281 on the TIN-NSDL portal or income tax portal. Quarterly TDS returns must be filed: Form 24Q for salary TDS, Form 26Q for non-salary TDS, Form 27Q for payments to non-residents. Due dates are July 31, October 31, January 31, and May 31 for the four quarters. Late filing attracts a fee of ₹200 per day under Section 234E, capped at the TDS amount.

TDS Certificates: Form 16 and Form 16A

After filing TDS returns, the deductor must issue TDS certificates. Form 16 is issued for salary TDS (Section 192) by June 15 of the following financial year. Form 16A is issued for non-salary TDS (all other sections) within 15 days of the due date of the quarterly TDS return. These certificates show the amount deducted and deposited against the deductee's PAN and are used to claim TDS credit in the ITR.

Lower or Nil TDS Deduction

A taxpayer can apply to the Assessing Officer for a certificate under Section 197 authorising the deductor to deduct TDS at a lower rate or nil rate. This is useful for taxpayers whose total income is below the taxable threshold or who have significant deductions. The certificate is valid for the financial year specified and must be submitted to each deductor. Alternatively, individuals can submit Form 15G (below 60 years) or Form 15H (senior citizens) to the deductor to avoid TDS on interest income, subject to income conditions.

Key TDS Sections and Rates

Section 192 — Salary: Deducted at the applicable income tax slab rate. No threshold — TDS applies if estimated annual salary exceeds the basic exemption limit (₹3 lakh under new regime, ₹2.5 lakh under old regime).

Section 194C — Contractor/Sub-contractor: 1% for individuals/HUF, 2% for others. Threshold: ₹30,000 per payment or ₹1 lakh aggregate in a financial year.

Section 194J — Professional/Technical Services: 10% for professional services (doctors, lawyers, engineers, consultants). 2% for purely technical services. Threshold: ₹30,000 per year.

Section 194I — Rent: 10% for rent of land, building, or furniture. 2% for rent of plant, machinery, or equipment. Threshold: ₹2.4 lakh per year.

Section 194H — Commission/Brokerage: 5%. Threshold: ₹15,000 per year.

Section 194A — Interest (non-bank): 10%. Threshold: ₹5,000 per year. For bank interest (194A), threshold is ₹40,000 (₹50,000 for senior citizens).

TDS Deposit and Return Filing

TDS Certificates: Form 16 and Form 16A

Lower or Nil TDS Deduction