ITR filing: Check TDS rates applicable on salary, interest, other incomes
Individuals must have noticed a certain amount deducted on their incomes like salaries, interest, commission received, dividends etc. Short for ‘Tax Deducted at Source’, TDS was brought in to collect tax at the source from where an individual’s income is generated. Basically, the entity/person making a payment to an individual is required to cut the tax and transfer the remaining amount to the person concerned.
However, TDS is not applicable to all incomes and people for all transactions. The Income-tax Act, 1961 has notified different TDS for different payments. Any individual can check the amount deducted as tax in their income in Form26AS, issued by the deductor.
TDS rates on salaried and non-salaried payments for FY 2021-22
Nature of Payment
TDS Rate (%)
Rs 2.5 lakh (for those below 60 years)
Normal slab rate
Withdrawal from EPF before completion of 5 continuous year
10Interest on securities such as debentures etc.
50,00010Dividends from companies (Effective from April 1, 2020)
10Interest received from banks, post office or co-operative society engaged in banking for e.g. interest from fixed deposit
40,000 (50,000 in case of resident senior citizen)
10Winning from lotteries, crosswords or any game
10,00030Winning from Horse race
10,00030Payment to Contractors and sub-contractors
1% (Individual/HUF), 2% (Others)
5%(individuals), 10% (Company)
Maturity of Life insurance policy those not exempted under Section 10(10D)
5National Savings Schemes
10Commission on sale of lottery tickets
5Commission/Brokerage received except for insurance commission
5Rent of Plant/Machinery /Equipment
2Rent of Immovable property
10Transfer of certain immovable property such as land, building*
1Payment of rent by Individual/HUF
50,000 per month
5Payment under Joint Development Agreements to Individual/HUF**
-10Payment of Professional Fees
2% (FTS, Certain royalties,) 10%(Others)
Dividend received from mutual funds (Effective from April 1, 2020)
10Payment of compensation on acquisition of certain immovable property (other than Agricultural land) by government
10Payments made to professional/commission/brokerage Rs 50 lakh or more
50 lakh5Cash withdrawal from bank account exceeding Rs 20 lakh or Rs 1 crore as the case maybe
2TDS on e-commerce participants (w.e.f. 01.04.2020)
1TDS deducted for exempting Senior citizens above 75 years from ITR filing
Rs 3 lakh or Rs 5 lakh (in old tax regime) or Rs 2.5 lakh (in new tax regime)
Normal slab rate
Purchase of Goods
Now, tax will be also deducted on the transfer of crypto assets at the rate of 1 per cent effective from July 1, 2022, if the transfer amount crosses Rs 50,000 in case of specified person (Rs 10,000 in other case).
TDS applicable only above threshold
Individuals must keep in mind that the TDS is only cut when the value of payment is above the specified threshold level.
How to avoid TDS
If an individual expects their total income in a financial year to be below the exemption limit, they can ask the payer not to deduct TDS by submitting Form 15G/15H.
The TDS amount deductor can be claimed as refund provided your tax liability for financial year is lower than the tax deducted. To claim TDS as return, the individual is needed to file income tax return.