TDS Explained: On FD Interest, Rent, Fees and More

By Paarth · Published 22 October 2026 · Updated 22 October 2026

TDS is tax deducted before the money reaches you. It is not an extra tax: it is an advance payment of your income tax, and you get credit for it when you file your return. On ₹60,000 of bank FD interest, the bank deducts ₹6,000, or ₹12,000 if it does not have your PAN.

Rules and rates here are as understood in October 2026. The Income-tax Act, 2025 has applied from 1 April 2026 and renumbers many sections, so the old section numbers used below (80C, 80D, 24(b), 194A and so on) may appear under new numbers on current forms. The amounts and ideas are what matter; confirm details on the Income Tax Department website.

Check the TDS on a paymentInterest, rent, fees, commission and moreOpen TDS Calculator →

How TDS works

When you receive certain kinds of income, the payer must deduct tax at a fixed rate and deposit it with the government in your name. It appears against your PAN in Form 26AS and the Annual Information Statement (AIS). When you file your return, you claim credit for it. If your actual tax is lower, the extra comes back as a refund.

Common TDS rates and limits

These are the usual figures as understood in October 2026, based on the thresholds from Budget 2025. TDS rules were not fully re-checked against every Budget 2026 change, so confirm anything important on the Income Tax Department website.

Bank interest (FDs, RDs): 10% once interest from a bank exceeds ₹50,000 in a year (₹1,00,000 for senior citizens). For other interest, the threshold is ₹10,000.
Rent: 10% on land and buildings and 2% on plant and machinery when yearly rent passes ₹6,00,000.
Rent paid by an individual tenant: 2% if rent is over ₹50,000 a month, deducted once, at the end of the tenancy or financial year.
Professional fees: 10%, and 2% for technical services and call centre fees, once the total passes ₹50,000.
Contractors: 1% for individuals and HUFs, 2% for others, when a payment passes ₹30,000 or the year's total passes ₹1,00,000.
Commission and brokerage: 2% above ₹20,000.
Buying property over ₹50 lakh: 1% of the price, deducted by the buyer.
Dividends and mutual fund income: 10% above ₹10,000.
EPF withdrawal before 5 years of service: 10% above ₹50,000.

A worked example

Your FD interest from one bank is ₹60,000 for the year. Because it crosses ₹50,000, TDS applies to the whole amount, not just the excess: 10% of ₹60,000 is ₹6,000. If you had not given the bank your PAN, the rate would be 20%, or ₹12,000.

See the TDS and what you receiveWith and without PANOpen TDS Calculator →

Tell the bank if you do not owe tax

If your total income is below the taxable limit, TDS on your FD interest is not really your tax. You can submit Form 15G (or Form 15H if you are 60 or older) at the start of the year so the bank does not deduct it. Without it, you must claim a refund after filing, which is slower. You are still expected to report the interest in your return.

Checking and claiming your TDS

Compare Form 26AS or the AIS with your own records before filing, to make sure every deduction is credited.
If a deductor has not deposited the tax or has used the wrong PAN, ask them to correct their filing.
Claim the TDS in your return. Credit is available even if your final tax is zero, and the excess is refunded.

If you are choosing between taxable savings options, SCSS vs FD shows how the higher senior limits affect TDS.

Frequently asked questions

Is TDS an extra tax on top of my income tax?

No. It is an advance payment against your final tax. If the tax deducted is more than your tax liability, you claim the difference back as a refund when you file your return. If it is less, you pay the balance.

What happens if I do not give my PAN?

The deductor must generally deduct TDS at the higher of 20% or twice the normal rate. For example, bank interest that would attract 10% TDS attracts 20% without PAN.

How do I stop TDS on FD interest if my income is below the taxable limit?

If your total income is below the taxable limit, you can submit Form 15G, or Form 15H if you are 60 or older, to the bank at the start of the year. It tells the bank not to deduct TDS. You still need to report the interest in your return.

Disclaimer: This article is for general education only and is not financial, investment, tax or legal advice. Figures are illustrative, and rates and rules change. Check official sources and consult a SEBI-registered investment adviser or qualified tax professional before you decide.

Paarth builds the free calculators on PropertiesOnline.in and has been writing about money and everyday tools in India for over 15 years. These guides are practical and honest — not investment advice. Invest based on your own goals or a qualified adviser's guidance.