Tax Deducted at Source (TDS) — Your Rights in Karnataka
Reviewed by the Commoner Law Editorial Team. Sourced from Indian central (Union) law — Constitution of India, central Acts of Parliament, and Supreme Court decisions. State-level information reflects each state's own Acts and High Court rulings. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
TDS is the mechanism by which a payer deducts income tax at source before crediting salary, interest, rent, professional fees, or other payments to the recipient.
- Right to Form 16/16A: Every TDS deductor must issue Form 16 (for salary) or Form 16A (for other payments) to you annually — Form 16 by 15 June; Form 16A within 15 days of the end of each quarter. Failure to issue Form 16/16A attracts a penalty of ₹100 per day on the deductor.
- Right to verify deductions via Form 26AS / AIS: All TDS deducted against your PAN is reflected in your Form 26AS (Annual Tax Credit Statement) and Annual Information Statement (AIS) on incometax.gov.in — verify this before filing your ITR.
- Lower TDS certificate (s. 197): If your total income is likely to be below the taxable threshold, you can apply to the Assessing Officer for a certificate authorising deduction at a lower rate or nil rate.
- No PAN / Higher TDS (s. 206AA): If you do not provide your PAN to the deductor, TDS is deducted at 20% (or the applicable rate, whichever is higher) — always provide your PAN.
- Bank FD interest: Banks deduct TDS at 10% if interest exceeds ₹40,000 per year (₹50,000 for senior citizens) — submit Form 15G/15H if your total income is below the taxable limit to avoid TDS.
When does it apply?
- Your employer or bank has deducted TDS from your salary or interest income.
- A client or company has deducted TDS on professional fees or contract payments.
- TDS shows up in Form 26AS but not in Form 16/16A, or vice versa — there is a mismatch.
What to Do If TDS Has Been Incorrectly Deducted or Not Credited in India
- Always provide your PAN to every payer (employer, bank, tenant, client) to ensure TDS is deducted at the correct rate.
- Submit Form 15G (below 60 years) or Form 15H (60+ years) to your bank at the start of each financial year if your total income is below the taxable limit — this prevents TDS on bank interest.
- Verify Form 26AS against Form 16/16A — if TDS deducted by the employer is not reflecting, contact your employer to file a correction in their TDS return.
- If TDS has been deducted and not deposited by the deductor (credit not in Form 26AS), file a complaint on the TRACES portal (tdscpc.gov.in).
What should you NOT do?
- Do not assume Form 16 is automatically accurate — cross-check every figure against your actual salary slips and investment proofs.
- Do not submit Form 15G/15H if your income actually exceeds the taxable limit — submitting a false declaration is a punishable offence (s. 277).
- Do not ignore a mismatch between Form 26AS and your ITR — file a revised return if needed, before the deadline.
How Karnataka differs from central law
TDS is a central income tax mechanism, but Karnataka-specific aspects relate to TDS on property transactions and Professional Tax interaction.
- TDS on property (Section 194-IA): When purchasing immovable property in Karnataka valued at Rs 50 lakh or more, the buyer must deduct TDS at 1% of the sale consideration and deposit it with the Income Tax Department. This applies to all property transactions registered through the Kaveri system in Karnataka.
- Stamp duty and TDS interaction: Karnataka's stamp duty is 5% of the property value (+ 1% surcharge in BBMP areas). The TDS at 1% is separate from stamp duty and registration charges. The buyer must ensure TDS is deducted before making payment to the seller.
- TDS on rent (Section 194-IB): Individuals paying rent exceeding Rs 50,000 per month must deduct TDS at 5%. Given Bengaluru's high rental market, this provision is widely applicable. The TDS must be deposited and Form 26QC filed within 30 days of the financial year-end or lease termination.
- Professional Tax vs. TDS: Professional Tax deducted from salary by the employer is separate from TDS (income tax). Both appear in the salary slip but serve different purposes — PT goes to the Karnataka state government, TDS goes to the central government.
Additional Steps in Karnataka
For property TDS, file Form 26QB on the Income Tax e-filing portal within 30 days of the month of deduction. Provide Form 16B to the seller. For rent TDS, file Form 26QC and provide Form 16C to the landlord. Verify TDS credits in your Form 26AS or Annual Information Statement (AIS) on incometax.gov.in.
Relevant Law: Income Tax Act, 1961, ss. 194-IA (TDS on property), 194-IB (TDS on rent), 194J (TDS on professional fees); Karnataka Stamp Act, 1957 (stamp duty rates)
Common Questions
When does tax deducted at source (tds) — your rights apply?
Your employer or bank has deducted TDS from your salary or interest income.A client or company has deducted TDS on professional fees or contract payments.TDS shows up in Form 26AS but not in Form 16/16A, or vice versa — there is a mismatch.
What should I do if TDS deducted from my salary or income is wrong or not showing in my Form 26AS in India?
Always provide your PAN to every payer (employer, bank, tenant, client) to ensure TDS is deducted at the correct rate.Submit Form 15G (below 60 years) or Form 15H (60+ years) to your bank at the start of each financial year if your total income is below the taxable limit — this prevents TDS on bank interest.Verify Form 26AS against Form 16/16A — if TDS deducted by the employer is not reflecting, contact your employer to file a correction in their TDS return.If TDS has been deducted and not deposited by the deductor (credit not in Form 26AS), file a complaint on the TRACES portal (tdscpc.gov.in...
What mistakes should I avoid with tax deducted at source (tds) — your rights?
Do not assume Form 16 is automatically accurate — cross-check every figure against your actual salary slips and investment proofs.Do not submit Form 15G/15H if your income actually exceeds the taxable limit — submitting a false declaration is a punishable offence (s. 277).Do not ignore a mismatch between Form 26AS and your ITR — file a revised return if needed, before the deadline.
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