TDS on Specified senior citizen (75+, bank computes & deducts) — Section 194P (now 393(1))
Rate
| Type of payment | Rate (with PAN) | Notes |
|---|---|---|
| any | slab | Bank deducts on total income after Chapter VI-A; no ITR needed |
No valid PAN: 20% or the normal rate, whichever is higher (Section 397(2), old 206AA).
Threshold
TDS applies when: Any amount. Once a threshold is crossed, TDS applies on the full amount, not just the excess.
Exemptions & relief
- No special exemptions beyond the threshold.
If you get it wrong
Late deduction: 1% per month or part thereof, from date deductible to date deducted.
Late deposit: 1.5% per month or part thereof, from date deducted to date deposited.
Late return: Rs 200/day (234E equivalent), capped at TDS amount in the statement.
Non-deduction: 30% of expenditure disallowed for non-deduction/non-deposit (40(a)(ia) equivalent); wrong payment code can trigger the same — verify scope under 2025 Act.
FAQs
What is the new section number for 194P from FY 2026-27?
Under the Income Tax Act 2025, 194P now falls under Section 393(1). The payment/return code is 1032.
What is the TDS rate under section 194P?
slab. If the payee has no valid PAN, 20% applies (or the normal rate, whichever is higher).
What is the threshold for 194P?
Any amount.
Which TDS return is 194P reported in?
Form 140 (was 26Q), filed quarterly.
Written and reviewed by a CA firm. Verified 2026-06-08 against the Income Tax Act 2025 / Finance Act 2025. General information, not advice for your specific case.