Question 1

What is TDS and when is it deducted?

Accepted Answer

TDS (Tax Deducted at Source) is a mechanism where the payer deducts tax at a prescribed rate before making a payment. It applies to salary (Section 192), FD interest (Section 194A), rent above Rs. 50,000/month (Section 194-IB), professional fees (Section 194J), and commission (Section 194H). The deducted amount is deposited with the government and can be claimed as credit when filing your income tax return.

Question 2

What is the TDS rate if PAN is not provided?

Accepted Answer

Under Section 206AA, if the payee does not provide a valid PAN to the deductor, TDS is deducted at the higher rate of 20% or the applicable rate, whichever is higher. This is a penalty provision to encourage PAN compliance. Always ensure your PAN is linked with your bank and employer to avoid excess TDS deduction.

Question 3

How can I claim a TDS refund?

Accepted Answer

If TDS deducted exceeds your actual tax liability, you can claim a refund by filing your Income Tax Return (ITR). The TDS details appear in your Form 26AS and Annual Information Statement (AIS). File your ITR before the due date, declare all income sources, claim applicable deductions, and the excess TDS will be refunded to your bank account, usually within 30-60 days of ITR processing.

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