TDS (Tax Deducted at Source) was introduced to collect taxes at the point of income generation. As per this concept, a person (the deductor) who is liable to make certain payments to another person (the deductee) must deduct tax at the source and remit it to the government. The deductee from whose income tax has been deducted at source is entitled to receive a credit for the amount so deducted if the deductor issues Form 26AS or TDS certificate.

TDS is calculated and levied based on a specified limit. This limit is the maximum level of income at which TDS will be taken from your future earnings. TDS is deducted according to the Indian Income Tax Act, 1961.

TDS is deducted in many ways, including from salary income and Bank FD earnings, interest income from the Post Office, insurance commissions, rent payments, early EPF withdrawals, the sale of immovable property, and rent payments on real estate, etc.

For example:

You invested Rs. 10,00,000 in a life insurance policy for a year at 8% interest. After a year, you earn an interest of Rs. 80,000.

  • It is now the responsibility of the life insurance company to deduct TDS on this Rs. 80,000 interest and deposit it with the Income Tax Department and issue you a TDS certificate reflecting this transaction.
  • If your income (including the interest on this life insurer policy of Rs. 80,000) is less than Rs. 2,50,000, you can claim the TDS deducted by the insurer and get a refund.
  • In the case, where your tax slab is 30%, then you will have to pay the remaining 20% tax (30%-10% TDS already deducted) on such interest income of Rs.80,000. Therefore, you must pay the tax of Rs.16,000 (Rs.24,000 total tax + Rs.8,000 TDS).

Let us know run through the latest TDS rates chart for Financial Year 2021-22 and Assessment Year 2022-23.

TDS Rates Chart for FY 2021-22 (AY 2022-23)

Below are the latest TDS rate table applicable for the Financial Year 2021-22 based on the Budget 2021 amendments;

Particulars Specified Limit TDS Rate %

Section 192

Payment of Salary

Income Tax Slab

Normal Slab rates (Based on old or new tax regimes)

Section 192A

Employees are entitled to receive taxable payments from the accumulated balance of their provident funds.

Rs 50,000

10% If no Pan,

TDS @ 30%

Section 193

Interest on Securities

A debenture or a security for money issued by

or on behalf of any local authority

or corporation established by a Central, State or Provincial Act;

Rs. 10,000


Section 193

Interest on Debentures

In the case of listed debentures issued by a company

on a recognized stock exchange as per the Securities Contracts (Regulation) Act,

1956 (42 of 1956), including any rules made thereunder;

Rs 5,000


Section 194

Dividend Income

Rs 5,000


(No TDS on Div Payouts by REITs / InvITs)

Section 194A

Interest income other than "Interest on securities"

Rs. 40,000
(Rs 50,000 for Senior Citzens)


Section 194B

Winnings from lotteries, card games, crossword puzzles, and other games of any sort

Rs. 10,000


Section 194BB

Winnings from horse race

Rs. 10,000


Section 194C

Payment to contractor/sub-contractor

a) HUF/Individuals

b) Others


a) 1%

b) 2%

Section 194D

Payment of Insurance Commission

(Form 15G/H can be submitted)

Rs. 15,000

5% (Individuals)

10% (Companies)

Section 194DA

Life insurance policy related payment

Rs 1,00,000


Section 194EE

Payment of NSS (National Savings scheme) Deposits

Rs 2,500


Section 194F

The payment on account of the repurchase of the unit by a mutual fund or unit trust



Section 194G

Commission, etc., on sale of lottery tickets

Rs 15,000


Section 194H

Commission or brokerage

Rs 15,000


Section 194-I

Rent of land, building, fitting or furniture

Rs. 2,40,000


Section 194-I

Rent of Plant & Machinery

Rs. 2,40,000


Section 194-IA

Payments on the transfer of certain immovable property other than agricultural land

Rs. 50 lakh


Section 194-IB

Payment of Rent

(Tenant has to deduct TDS)

(Individuals or HUF who are not liable to Tax Audit)

Rs 50,000 (per month)


Section 194-IC

Payment of monetary consideration under Joint Development Agreements



Section 194J

Fees for professional or technical services:

i) Amount paid or payable towards fees for technical services

ii) Amount paid or payable towards royalty like consideration for sale, distribution, or exhibition of cinematographic films;

iii) Any other sum

Rs 30,000

i) 2%

ii) 2%

iii) 10%

Section 194K

Income in respect of units payable to resident person



Section 194LA

Payment of compensation on acquisition of certain immovable property

Rs 2,50,000


Section 194LB

Interest from Infrastructure Bond to NRI



Section 194LBA(1)

Business trust shall deduct tax while distributing,

any interest received or receivable by it from a SPV or any income received from renting

or leasing or letting out any real estate asset owned directly by it, to its unit holders.



Section 194LBB

Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]



Section 194LBC

Income in respect of investment made in a securitization trust (specified in Explanation of Section 115TCA)


25% (for Individual or HUF)

30% (for others)

Section 194 LD

Interest on certain bonds and govt. Securities



Section 194N

Cash withdrawal during the previous year from one or more account maintained by a person with a banking company,

co-operative society engaged in business of banking or a post office:

More than Rs 1 crore


Section 194-O

Payment or credit of amount by the e-commerce operator to e-commerce participant



Section 194P

Deduction of tax by specified bank in case of senior citizen having age of 75 or more


Tax on total income as per rate in force

Section 194Q

Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhs (applicable w.e.f 01.07.2021)

Rs 50 lakh


Section 194Q

Any other Income



Section 206AB

TDS on non-filers of ITR at higher rates (applicable w.e.f 01.07.2021)


5% or Twice the rates in force

Note: The rate of TDS shall be increased by applicable surcharge and Health & Education cess. Please consult a tax consultant for more details.