TDS (Tax Deducted at Source) applies across dozens of sections in the Income Tax Act, but most individuals only ever encounter a handful of them in practice.
Section 192 — TDS on salary
Your employer deducts TDS from your monthly salary based on your projected annual tax liability, considering the tax regime you've chosen and any declared investments (under the old regime). This is the most universal TDS section, affecting essentially every salaried employee.
Section 194A — TDS on interest (other than securities)
Banks and post offices deduct 10% TDS if your annual interest income from that institution exceeds ₹50,000 (₹1,00,000 for senior citizens). Without a PAN on file, this jumps to 20%. If your total income is below the taxable threshold, submitting Form 15G (under 60) or Form 15H (60+) at the start of the financial year avoids this deduction entirely.
Section 194IB — TDS on rent (individual/HUF tenants)
If you're an individual or HUF tenant (not subject to tax audit) paying monthly rent above ₹50,000, you're required to deduct 2% TDS — typically done once a year rather than monthly, deducted from the last month's rent or when the tenancy ends.
Section 194IA — TDS on property purchase
If you're buying property valued at ₹50 lakh or more, you as the buyer must deduct 1% TDS on the transaction value and deposit it via Form 26QB within 30 days — a step many first-time property buyers don't realize is their own responsibility, not the seller's or the registrar's.
What if TDS is deducted but you don't actually owe tax?
TDS deducted always shows up in your Form 26AS and can be claimed back as a refund when you file your return, even if your actual tax liability turns out to be lower or zero. TDS isn't a final tax — it's an advance collection that gets reconciled at filing time.