Mastering TDS, TCS and Tax
Refunds for Individuals
Agenda
⮚
What is TDS and TCS?
⮚
Threshold Limits for TDS and TCS (FY 2024-25)
⮚
Form 26AS
⮚
Understanding Tax Credit Mismatches
⮚
Resolving Tax Credit Mismatch
⮚
Claiming Tax Refunds: The Do's and Don’ts
⮚
Common Challenges and Their Solutions
⮚
How to Use TDS/TCS as a Tool for Better Tax Planning
⮚
QnA
What is TDS and TCS?
Tax Collected at Source (TCS)
Tax Deducted at Source (TDS)
●
Deducted by the person making the
payment
●
Tax is collected at the source from the
buyer
●
The recipient receives the payment net of
TDS
●
Applies to the sale of specific goods or
services
●
Applies to various payments like salaries,
interest on deposits, rent, professional
fees, etc.
●
Applies to certain categories like foreign
remittances, high-value transactions, ecommerce sales, etc.
●
Reflected in Form 26AS, and in a TDS
certificate
●
Reflected in Form 26AS
Threshold Limits for TDS (FY 2024-25)
Sl. No.
Nature of Payment
Threshold*
TDS Rate
1
Salary
Basic exemption limit
2
Premature withdrawal from EPF
₹ 50,000
10%
3
Dividend by Indian company
₹ 5,000
10%
4
Income from mutual fund units
₹ 5,000
10%
5
Interest other than securities (e.g., FD)
₹ 40,000
₹ 50,000 for senior citizens
10%
6
Winnings from lottery, crossword, horse racing, etc.
₹ 10,000
30%
7
Commission or brokerage/ Insurance Commission
₹ 15,000
5%
8
Payment for purchase of immovable property
₹ 50,00,000
1%
9
Rent paid by individual/HUF not liable to tax audit
₹ 50,000/ month
5%
10
Cash withdrawals
₹1 crore
₹20 lakh for certain taxpayers
2%
*The Threshold limits for TDS in Budget 2025 are applicable for FY 2025-26
Slab Rate
Threshold limits for TCS (FY 2024-25)
Sl. No.
Nature of Payment
Threshold*
TCS Rate*
1
Sale of motor vehicles
₹10,00,000/ transaction
1%
2
Overseas remittances under the LRS
₹7,00,000
5%
3
Overseas remittances for education (loan-funded)
₹7,00,000
0.5%
4
Overseas remittances (any other purpose)
₹7,00,000
20%
5
TCS on tour packages
No threshold
5%
*The Threshold and TCS rates rationalised in Budget 2025 are applicable for FY 2025-26
Form 26AS
1
Generated and maintained by the Income Tax
Department for all PAN holders
2
Shows all the taxes that have been paid or
deducted (TDS/TCS) on taxpayer’s behalf
3
Entries in Form 26AS must be verified with actual
income and taxes paid
4
26AS can be accessed from the Income Tax Portal
or via your bank’s net banking facility
Tax Credit Mismatches
Tax credit mismatch
occurs
when
the
details of TDS/ TCS do
not match the records
in 26AS
Claiming tax credits
that don’t match Form
26AS, may raise a
demand for excess
credit claimed
May attract interest or
penalties
under
Sections 234A/B/C
Common Reasons for Tax Credit Mismatch
1
Incorrect PAN Quoted by Deductor/ Collector
2
TDS Not Depicted in Form 26AS
3
Mismatch in TDS Amount/ Reporting Section
4
Incorrect Tax Payment Details by the
Taxpayer during payment of advance tax
Resolving Tax Credit Mismatch
1
Identify the Cause of the Mismatch
2
Filing Online Grievance on IT Portal
3
Rectify Challan Errors
4
Revise Your ITR
Claiming Tax Refunds: Checklist
1
File Your ITR on Time & Use the Correct
Form
2
Verify Form 26AS & AIS
3
Provide Accurate Bank Details
4
Report All Income & Claim Deductions
5
Verify & Rectify If Needed
6
Don’t ignore TDS/TCS mismatches
Common Challenges and Their Solutions
Sl. No.
Challenge
Solution
1
Mismatch between ITR and Form 26AS/AIS
Double-check TDS/ TCS, advance tax details before
filing
2
Incorrect or inactive bank account details
Provide PAN-linked, active bank account
3
Delay in ITR verification
Verify within 30 days of ITR filing
4
TDS not deposited by the deductor
Contact the deductor
5
Clerical errors (Wrong AY, date of payment, etc)
File Rectification u/s 154
TDS/TCS as a Tax Planning Tool
TDS/TCS
optimize
reduce
outflows,
secure
refunds.
helps Optimize
income
taxes, declarations
to
cash avoid excess TDS
and
timely
Monitor TDS on
Capital Gains and
plan to reinvest
gains
Adjust
tax
using
credits
advance
payments
TDS/TCS
Benefit from Lower
TDS Applications
& Plan Income
Splits
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