When Should TDS be Deducted and Who is Liable to Deduct it?

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

When Should TDS be Deducted and Who is Liable to Deduct it?

Tax deduction at source (TDS) is done by the employer while paying its employee (salary/wages) on taxable income; at the time of payment. This then creates a TDS Certificate for filing TDS return.

  • Feb 08, 2022

TDS was established with the intention of direct taxation straight from the original income. As per this theory, the deductor who is compelled to make a specific type of payment to the deductee must recoup tax at the origin and transfer it to the Central Government’s fund. The deductee whose taxable income has been deducted at origin is eligible for a rebate for the sum so deducted depending on the details filled in the deductor’s Form 26AS or the TDS certificate.

When Is TDS Deducted and Who Is Responsible for It

Individuals who make certain payments, as defined by the Income Tax Act, are required to pay TDS just at the time of transaction. No TDS should be collected if the person making the payment is a person or a HUF whose finances are not required to be audited. Even if the person or HUF is not subject to a financial audit, people and HUFs who pay rent in excess of ₹50,000 per month must pay TDS at the rate of 5%.

People and HUFs who must deduct TDS at a rate of 5% are exempt from applying for TAN (Tax deduction account number). Your corporation deducts TDS at the applicable income tax slab rates. TDS is collected by banks at a rate of 10%. Furthermore, they can collect 20% if they don’t have your PAN credentials.

For most payments, TDS rates are specified in the income tax legislation, and TDS is deducted by the payer based on these rates. You will not have to pay any tax if you provide investment proof (for claiming deductions) to your company, and your total tax payable is less than the tax limitation. As a result, you should not have any TDS deducted from your wages. Similarly, if your total income is substantially below the tax threshold, you can file Form 15G and Form 15H with your bank to avoid TDS being taken from your interest income.

TDS On Insurance Premium

Most insurance plans, whether life insurance or term insurance, do not charge any kind of TDS on premium provided the following conditions are met:

  • TDS on insurance is exempted if the policies were granted on or before March 31, 2012, with an amount assured of at least five times the annual premium paid.
  • The policies, which were issued on or after April 1, 2012, have an amount assured of at least ten times the yearly premium paid.

TDS On Insurance is Applicable Under The Following Conditions

The exemptions under Section 10 (10D) do not apply if the maturity amount from a life insurance payout exceeds ₹1,00,000 in a year. In this case, the maturity amount will be taxable as usual. TDS is deducted from the maturity amount of a life insurance policy in line with Section 194 DA.

TDS Refund Claim

Whenever the tax paid through TDS exceeds the actual tax payable determined for the financial year, a TDS Refund claim is filed. It’s computed by adding together all of your earnings from various sources. As taxpayers, we are all classified into different tax brackets and are required to pay tax in accordance with that.

To conclude, mastering the fundamentals of TDS will make it simpler to manage your money and make smarter investments to increase your wealth over the long term.

Download Brochure


  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999


Download Brochure


  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490


- A Consumer Education Initiative series by Kotak Life

Similar Articles

How can I get Form 16B from traces?

How to Boost Your Savings with Guaranteed Results

Should you prefer a Guaranteed Savings plan over monthly income schemes?

All about TDS on Salary under Section 192 – Kotak Life

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

Should one prefer a guaranteed savings plan over monthly income schemes?

How can NRIs prevent double taxation in India?

Income Tax Deductions for Disabled Persons Under Section 80U

How to Check Income Tax Refund Status Online in India

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

Section 80E: Tax Exemption on Interest on Education Loan

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

12 Tax Changes in Budget 2022 that May Impact Your Personal Financial Planning

What is indirect tax and its types?

Insurance and Endowment: Everything You Need to Know!

What is Section 80C Deduction Limit?

All you need to know About Tax on Inheritance

9 Income Tax Myths That Could Cost You Money while Filing returns

What is Form 26AS - All You Need To Know

Tax Saving Options other than Section 80C

What is the Difference between Form 16 and Form 16A?

What is the difference between TDS and TCS?

Pradhan Mantri Suraksha Bima Yojana

Tips to plan your savings in 2022

What is TDS Slab?

Presumptive Taxation for Business and Profession

What Investment Options Come with Tax Incentives?

How to Calculate returns on an assured savings plan?

Are Financial Planning and Tax Planning the Same Thing?

How to File Income Tax Return - Everything You Need to Know

E-Filing of Income Tax Returns in India

How to Save Tax on Salary Arrears?

What is TDS Exemption Limit?

What is Form 16A?

How to File Form 10E for Tax Relief on Salary Arrears?

What is the Difference Direct Tax and Indirect Tax

Investing Lump Sum Amount

Financial Planning and Best investment options for Housewives

Challan 280 - How to Use Challan 280 to Pay Income Tax

ITR-6: Guide to filing ITR-6 Form online

Basics of Guaranteed Savings Plan

Impact of GST on Life Insurance in India

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

Section 16 of the Income Tax Act (ITA), 1961

Tax Benefits for Startups in India

Why is Form 16 Important?

Income-Tax Liability- The Difference Between Gross Income & Total Income in Calculating Income Tax

All about TDS Payment Online & Due Dates

Section 80C Deductions as per Income Tax Act, 1961

What is HRA (House Rent Allowance) and How is HRA Exemption Calculated?

Complete Savings Plan for Low Income Earners

Things to Do After Filing Income Tax Returns

How To Save Tax Using Life Insurance?

What is Section 80C Deduction?

Section 44AD of Income Tax Act for AY 2021-22

How to Save Income Tax with Insurance

Excess TDS Deduction – Claim TDS Refund

Types of Riders in Insurance Policy

How to Get Form 16?

Tax-Free Income in India

Tax Season is Coming- Know How to Save Tax

Tax Benefit of Investing in Term Plan

What is Tax Deduction at Source (TDS)?

Saving Plans to Give Children a Debt-free College Education

What is TDS Refund Process?

Highlights of the Union Budget 2023-24

How to file Form 16 online?

TDS rules on the sale of jointly owned property

How to File Income Tax Return for First Time Tax Payers

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

How to File Income Tax Return without Form 16

ITR 2 Form – Complete Guide

Tax Planning and Tax Benefits of Life Insurance

Why January Is an Important Month for Saving Tax?

How Much Money This Budget 2019 Can Help You Save

Who Should Invest In Savings Plan

Easy ways to make personal savings plans

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

What Is Advance Tax and How Is It Calculated?

धारा 80सी आयकर अधिनियम, 1961

Difference Between Guaranteed Savings Plan and Guaranteed Income Plan

All You Need to Know About Section 80C

What is a savings plan?

Do Beneficiaries Pay Taxes on Life Insurance?

Tax Deductions You MUST Know

Income Tax Exemption for Physically Handicapped Dependent

A Complete Guide for Filing ITR 3 Form

Income Tax Deduction Under Section 80CCC In India

Tax Exemption and Scope of Coverage

भारत में महिलाओं के लिए सरकारी योजना

How to e file ITR on Income Tax Government Portal

How Should I Allocate A Monthly Savings Plan For Long-Term Benefits?

Tax-Savings Investments and Options in India

List of Important Income Tax FAQs

All You Need To Know About Assured Savings Plan

What is ITR 5 Form and How to File ITR 5?

Best Savings plan for the middle class in India

What are Direct Taxes? How to Avoid being Overtaxed?

Budget 2019: Impact on the Common Man in India

How to Check Income Tax Returns Status Onine?

Tax Saving for Self Employed in India

Importance of Savings Plan You Need to Know

Home Investment Plan to Buy Dream Home

Financial Benefits and Government Schemes Every Woman in India Should Know

How to e-Verify your Income Tax Return

3 Tips to Buy Guaranteed Savings Plan

Guaranteed Return Plans-Why is it a must for you?

Understanding Tax Exemptions in ULIP (Old and New)

Top 8 Tax-Saving Methods in India- Budget Planning

How To Save Tax Better with 80C

What are Deferred Savings Plans?

How to View 26AS and Download Form 26AS Online

Save Income Tax by 31st March: Here Is a Checklist

धारा 80डी आयकर अधिनियम, 1961

Guide for Tax Calculation on your Salary

Section 80G of the Income Tax Act

What is the Difference between Assessment Year (AY) and Financial Year (FY)?

How to View 26AS and Download Form 26AS Online?

How to create wealth through a savings plan?

आयकर रिटर्न (आईटीआर) फॉर्म के प्रकार

What is capital gains tax, and how it works?

Income Tax Filing Using Multiple Form 16

What is Section 80CCC of the Income Tax Act 1961

Difference Between Guaranteed and Assured Returns

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

इनकम टैक्स रिटर्न कैसे फाइल करें?

Post Office Savings Scheme - All You Need to Know

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

प्रत्यक्ष कर और अप्रत्यक्ष कर में क्या अंतर है?

What is Section 10D of the Income Tax Act?

Have You Considered Term Insurance a Part of Your Tax Planning?

Is PF Withdrawal Taxable for NRI?

How Do Assured Savings Plans Work and Why You Should Consider One?

What is Salary Protection Insurance and Why You Need It

How To Invest In Guaranteed Return Plans For Higher Returns And Financial Security?

Types of Income Tax Return (ITR) Forms

How to Check Income Tax Refund Status Online in India

Income Tax Deductions Under Section 80C

Why Tax Planning Should Be an All-year Round Activity

Saving Income tax in 2017 - 18

Difference between Section 80C, 80CCC, 80CCD & 80D

Penalty For Late Filing TDS Return

How to Download Form 16?

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

How to File Form 16 for Salaried Employees?

Money Saving Tips for Single Women

Tax Saving Options for Salaried Employees

आयकर स्लैब 2021-2022

What are the Different Types of Taxes in India?

How to save tax for salaried person?

What is Section 80C - Explained in Detail

A Comprehensive Guide to Understand the ITR 7 Form

What is the Maximum Maturity Benefit in Assured Savings Plans?

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

Interest Imposed Under Sections 234A, 234B and 234C

How to Pay Advance Tax Online in India

How to File ITR Online

Plan your Daughter's Wedding With Best Monthly Savings Plan

What is the Percentage of Tax Deducted at Source (TDS)?

What is the TDS Rate on Salary?

What is Form 16B?

सुकन्या समृद्धि योजना (SSY) के कर लाभ क्या हैं?

Tax Structure in India

ITR 1: Sahaj Form

TDS Due Dates of FY 2022-23 For Return Filing

What is Tax Evasion and What Are The Penalties For Tax Evasion In India?

Tax Saving Guide for 2019-20

What is EEE in income tax? 5 tax-free investment options to become crorepat

How to create a savings plan and make good investment choices

Tax Benefits of ULIP Plans Available for NRIs

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

How to File TDS Return?

Problems People Face with Tax Returns after a Job Change

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2021-22 & 2022-23

Can You Get Term Insurance Without Income Proof?

5 Popular Tax-Saving Schemes in India

Personal Finance - Meaning, Importance, and Tips for Personal Finance

What is ITR & How to File Income Tax Return?

How Inflation Affects Savings and Investment?

Income Tax Exemption for Disabled

9 Unusual Investments you Didn't Know for Saving Taxes in India

What is Rule 132 of Income Tax? How Does it Affect You?

Sub-sections Under Section 80C of the Income Tax Act, 1961

8 Things to Help You Select a Savings Investment plan

Tax Saving Tips: Best Ways to Save Income Tax for 2021

Income Tax Filing For NRI in India

How much gold can you keep at home? Limits and income tax rules explained

What To Do If Your TDS Is Not Deposited With The Government?

Income Tax Benefits for Doctors