TDS, TCS, AIS, Form 26AS and Form 168 · Tax Year 2026-27
What is TDS and how does it work?
TDS is tax deducted at source: the person paying you cuts tax from the payment and deposits it with the government in your name. Learn how it appears in your statements, how you claim credit and what to do when it is wrong.
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TDS means tax deducted at source. The person paying you (an employer, a bank, a tenant or a client) cuts tax from the payment and deposits it with the government against your PAN. It is not an extra tax. It is an advance payment of your own tax. When you file your return you claim credit for it, and any excess comes back as a refund.
TDS rates and thresholds change by payment type and year. This guide explains how TDS works and where it shows up. It does not list rates, because those are not held in TaxCare's rule files. For the rates, see section 393 of the Income-tax Act, 2025 on the Income Tax Department website.
How it works, in four steps
- The payer deducts. When a payment crosses the limit set for its type, the payer deducts tax at the prescribed rate before paying you.
- The payer deposits. The payer pays that tax to the government within a due date, using their TAN.
- The payer reports. The payer files a quarterly TDS statement naming you, your PAN, the amount paid and the tax deducted. It also issues you a certificate. Salary TDS comes with Form 16 (Form 130 under the 2026 Rules). Other TDS comes with Form 16A (Form 131).
- You claim credit. The tax appears against your PAN in your tax statements, and you claim it in your return.
What kinds of payment attract TDS
Many payments carry TDS. The category and the section under the 1961 Act with its 2025 Act counterpart, from the department's own crosswalk:
Category | Section (1961 Act) | Section (2025 Act) |
|---|---|---|
Salary | 192 | 392 |
Interest from others (such as securities) | 193 | 393(1), S.No. 5(i) |
Interest from deposits | 194A | 393(1), S.No. 5(ii) and 5(iii) |
Dividend | 194 | 393(1), S.No. 7 |
Contractors and business receipts | 194C | 393(1), S.No. 6(i) |
Professional and technical fees | 194J | 393(1), S.No. 6(iii) |
Rent | 194I(b) | 393(1), S.No. 2(ii).D(b) |
Purchase of immovable property | 194IA(P) | 393(1), S.No. 3(i)(P) |
Cash withdrawals | 194N | 393(3), S.No. 5 |
Transfer of virtual digital assets | 194S | 393(1), S.No. 8(vi) |
Lottery and crossword winnings | 194B | 393(3), S.No. 1 |
See our guide on TDS sections under the new Act for the full crosswalk.
Where to see your TDS
Tax year | Statement with your TDS |
|---|---|
Up to 2025-26 | Form 26AS (and AIS) |
From 2026-27 | Form 168 (and AIS) |
Form 168 lists each deduction with a four-digit section code. See our guide on the Form 168 code list. For a view of your income as the department sees it, see our guides on the AIS and on Form 26AS vs Form 168.
How you claim credit
In your ITR you list the TDS in the tax-paid schedules, with the deductor's TAN and the amounts. For salary, the figures come from Form 16. For other income, from Form 16A or your tax statement. Match them with your Form 26AS or Form 168 before you file. The department grants credit for what appears in its records.
What if TDS is wrong or missing
- Missing from your statement. The payer may not have deposited it or reported it with your PAN. Ask them to correct their statement. Without it, the department may not grant credit.
- More than it should be. Claim the excess as a refund by filing a return. See our guide on how to claim a refund of excess TDS on salary.
- Deducted in someone else's PAN. Ask the payer to correct the PAN in the statement.
- Deducted at a higher rate. If you do not give your PAN to the payer, tax can be deducted at a higher rate. Give your PAN to every payer.
- Lower or nil deduction. A person whose tax is nil can sometimes ask a payer not to deduct, by giving a declaration to the payer before the payment. Under the 2026 Rules this declaration is Form 121 (earlier Forms 15G and 15H). It needs a valid PAN, and the payer must report the declarations it receives.
TDS and the duty to file
You must file a return if your income is above the basic exemption limit. You must also file when the TDS and TCS in your name reach ₹25,000, or ₹50,000 for a senior citizen, on TaxCare's rules for the tax year 2025-26.
The tax year 2026-27 figures in TaxCare's rule set are provisional and carry these amounts forward. See our guide on who must file an income tax return.
TDS is not the same as your final tax
Your final tax is worked out in the return. If TDS is more than the tax, you get a refund. If it is less, you pay the balance as self-assessment tax before filing. If you owe ₹10,000 or more after TDS, advance tax rules can apply, and interest can arise for a shortfall.
TCS: the cousin of TDS
Tax collected at source (TCS) is tax a seller collects from you when you buy certain things, for example some foreign remittances, overseas tour packages and luxury goods. It also shows in your statements and is claimed as credit in the same way.
How TaxCare helps
TaxCare brings your Form 26AS or Form 168, AIS and TIS from the portal into one place, after you confirm with an OTP. You can see each deduction by category and section, compare it with your Form 16, and claim only what matches. If a payer's figure looks wrong, you see it before you file. A Tax Expert can help with disputes.
This guide gives general information and is not professional tax advice.
Questions on this topic
What does TDS mean?
Tax Deducted at Source. The payer deducts tax from a payment, such as salary or interest, and deposits it with the government against your PAN.
Is TDS an extra tax?
No. It is an advance payment of your own tax. You get credit for it in your return, and the extra is refunded if you paid more than you owed.
Where can I see my TDS?
In Form 26AS for tax years up to 2025-26, in Form 168 from 2026-27, and in your AIS.
What if my TDS does not appear in my statement?
The payer may not have deposited it or reported it correctly. Ask the payer to correct their TDS statement before you claim the credit.
Do I still need to file a return if TDS was deducted?
Often yes. If tax deducted and collected at source is ₹25,000 or more (₹50,000 for a senior citizen), a return is required on TaxCare's rules. You also need to file to claim a refund.
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