Latest TDS Rates FY 2025-26

Have you ever noticed that the maturity amount of a fixed deposit (FD) credited to your account is lower than shown on an FD certificate? Or wondered why the dividend received from a company is less than what you calculated after the announcement?

The reason for this lower amount, in many cases, is TDS. During the tax-paying season, many investors search for TDS rate chart 2025-26, how TDS applies to your investments and related aspects. Many investors focus on returns but overlook the tax deducted before the money even reaches their bank account.

Before we get into the details, let's know that TDS is not an additional tax. It is simply an advance collection of tax by the government. The amount deducted can be adjusted against your final tax liability when you file your Income Tax Return (ITR).

What Is TDS? (TDS Full Form)

TDS full form is Tax Deducted at Source. Under this system, the person or institution making a payment deducts tax before paying you. For example:

• Banks deduct TDS on FD interest.
• Companies deduct TDS on dividends.
• Bond issuers deduct TDS on interest payments. The deducted amount is deposited with the Income Tax Department and reflected against your PAN.

You can view these deductions in,

• Form 26AS
• Annual Information Statement (AIS) When filing your ITR, you can claim credit for the TDS already deducted.

Why Should Investors Care About TDS?

TDS affects your actual investment returns, like,

• You may receive less money than expected.
• Excess tax may remain unclaimed.
• Tax filing errors may occur.

Also, many investors think that if TDS has been deducted, they don't need to report the income. This is incorrect. The income must still be reported in your tax return and the TDS deducted is adjusted against your final tax liability.

TDS Rate Chart 2025-26

Below is a simplified TDS rate chart for common investment products.

*Subject to applicable thresholds, PAN availability, and prevailing tax laws.

What Is TDS Payment?

Many investors search for ‘TDS payment’ after noticing a deduction on their investment income. In most cases, you do not make the TDS payment yourself.

The bank, company, mutual fund house or bond issuer deducts the tax and deposits it with the government on your behalf. Your responsibility is to:

• Check Form 26AS
• Verify the deduction
• Report the income correctly in your ITR
• Claim credit for the TDS already deducted

What Is TDS Online Payment?

The term TDS online payment usually refers to the electronic deposit of TDS with the Income Tax Department. It must be noted that you yourself do not pay TDS. It is always deducted by the issuer. For example: Banks deposit TDS deducted from FD interest. Companies deposit TDS deducted from dividends. Bond issuers deposit TDS deducted from interest payments. Instead, verify that the amount appears correctly in Form 26AS and AIS.

Form 26AS and AIS

Every investor should review, Form 26AS This statement shows, TDS deducted Tax deposited against your PAN Tax refunds received

Annual Information Statement (AIS)

AIS provides a broader view of your financial transactions, including:

• Dividend income
• Interest income
• Mutual fund transactions
• Securities transactions Checking these documents before filing your ITR can help prevent errors and ensure you claim all eligible tax credits.

How to Claim a TDS Refund

Suppose, Total TDS deducted = ₹8,000 Actual tax liability = ₹3,000 You can claim a refund of ₹5,000 while filing your Income Tax Return. The Income Tax Department will process the return and credit the refund directly to your bank account. This is why tracking TDS is important.

TDS for NRIs

The TDS rules for Non-Resident Indians (NRIs) are very different from those for resident Indians. In many cases, TDS is deducted at source even when the income amount is relatively small. The rates are also typically higher, although NRIs may be able to reduce their tax liability through a Double Taxation Avoidance Agreement (DTAA) or by obtaining a lower TDS certificate from the Income Tax Department.

*Actual TDS may vary depending on the applicable DTAA, surcharge, cess, and prevailing tax laws. NRIs cannot submit Form No. 121 to avoid TDS. However, they may be able to reduce the TDS rate by claiming DTAA benefits through documents such as a Tax Residency Certificate (TRC) and Form 10F, or claim a refund when filing their Indian income tax return.

Frequently Asked Questions

How to Check TDS Online?

You can check TDS deducted against your PAN through Form 26AS and the AIS available on the Income Tax portal. Simply log in to your account, navigate to the tax credit section, and view the details of TDS deposited by banks, companies, employers, or other deductors.

How to Claim a TDS Refund?

If the TDS deducted during the financial year exceeds your actual tax liability, you can claim the excess amount as a refund by filing your ITR. For example, if ₹10,000 was deducted as TDS but your actual tax liability is only ₹4,000, you can claim a refund of ₹6,000. The Income Tax Department processes the refund after verifying the return.

How Much TDS Is Deducted on FD Interest?

Banks generally deduct TDS at 10% on fixed deposit interest when the applicable threshold is crossed and the depositor has provided a valid PAN. If PAN is not furnished, a higher rate may apply. It is important to remember that FD interest is fully taxable according to your income tax slab, regardless of the TDS deducted by the bank.

Is TDS Refundable?

Yes. TDS is not a separate tax but an advance collection of tax. If the total TDS deducted during the year exceeds your final tax liability, the excess amount can be claimed as a refund while filing your Income Tax Return. The refund is usually credited directly to the bank account linked to your PAN.

What Is the TDS Limit for Bank Interest?

Banks deduct TDS on fixed deposit interest only after the interest earned crosses the prescribed threshold during a financial year. These thresholds may change from time to time based on government notifications. Investors should check the latest Income Tax rules or consult their bank for the applicable limits.

Can Senior Citizens Avoid TDS?

Eligible senior citizens whose total taxable income is below the applicable tax limit may submit the prescribed self-declaration form to the bank to prevent TDS deduction on interest income. However, the conditions and forms prescribed by the Income Tax Department should be carefully reviewed before submission.

What Happens If TDS Is Deducted Twice?

In rare cases, TDS may be deducted twice due to reporting or processing errors. Investors should first verify the entries in Form 26AS and AIS. If an error is identified, they should contact the deductor, such as the bank or company, for correction. Excess tax deducted can generally be claimed as a refund while filing the ITR.

How to Download Form 26AS?

Form 26AS can be accessed through the Income Tax e-filing portal. After logging in, navigate to the tax credit section and select Form 26AS. The statement contains details of TDS, advance tax, self-assessment tax, and tax refunds linked to your PAN. Investors should review it before filing their returns.

What Is AIS in Income Tax?

AIS, or Annual Information Statement, is a comprehensive record of an individual's financial transactions maintained by the Income Tax Department. It includes information such as interest income, dividend income, securities transactions, mutual fund transactions, and TDS details. AIS helps taxpayers verify whether all income has been correctly reported in their tax returns.

Is TDS Applicable on Mutual Funds?

For resident investors, TDS is generally not applicable on regular mutual fund redemptions. However, TDS may apply to payouts under the IDCW (Income Distribution cum Capital Withdrawal) option once the applicable threshold is crossed. Capital gains arising from mutual fund redemptions are taxed separately under capital gains tax rules.