TDS (Tax Deducted at Source) is tax collected by the payer at the time of making specified payments. It's deducted when payments exceed prescribed threshold limits for different income types like salary, interest, rent, commission, etc.

Why is TDS rate higher without PAN card?

TDS rate is 20% (or higher of prescribed rate) if PAN/Aadhaar is not provided. This is to encourage taxpayers to obtain PAN and ensure proper tax compliance. Providing PAN reduces TDS to prescribed rates (typically 1-10%).

What is the threshold limit for interest TDS?

TDS under Section 194A is deducted at 10% if interest from bank deposits, post office, or cooperative society exceeds ₹10,000 in a financial year from a single deductor.

How can I avoid TDS deduction on interest?

Submit Form 15G (if below 60 years) or 15H (if above 60 years) to bank if your total income is below taxable limit. You can also split deposits across banks to keep interest below ₹10,000 threshold per bank.

What if TDS is deducted but I have no tax liability?

File Income Tax Return and claim refund of excess TDS. The refund will be processed after verification of your return. Keep all TDS certificates (Form 16/16A) as proof of tax deducted.