TDS Calculator India

How much TDS do you need to deduct? Calculate Tax Deducted at Source instantly across all 12+ sections - professional fees, rent, contractors, commissions - with Budget 2025 thresholds, no-PAN logic and a visual rate comparison.

Budget 2025 Thresholds · 12+ Sections

Payment Details

Nature of Payment (Section)

Deductee Status

Payment & PAN Details

Amount Paid / Payable

₹

Is PAN Available?

Yes - Normal Rate No - 20% (Sec 206AA)

* Assumes single payment for threshold check. For aggregate annual limits, consult a CA.

Net Payment to Vendor

₹ 54,000

After TDS deduction

Gross Amount ₹ 60,000

TDS Rate Applied 10%

TDS to Deduct No TDS

₹ 6,000

Threshold: ₹ 50,000 / year. If annual aggregate < threshold, TDS is ₹0.

TDS Rates - Which Payments Get Taxed Hardest?

TDS Calculator India - Budget 2025 Rates & Thresholds

TDS (Tax Deducted at Source) - also called withholding tax in international contexts - is one of the most misunderstood compliance requirements for Indian businesses and freelancers. The deductor (the payer) deducts a percentage before paying, deposits it with the government and the deductee (the receiver) gets credit when filing their ITR. Getting it wrong - either missing a deduction or using the wrong rate - can cost far more than the TDS itself through penalties and interest.

This TDS calculator India covers all major sections updated for Budget 2025, per rules notified by the CBDT (Central Board of Direct Taxes) - including the new Section 194T for partnership firm payments, the raised ₹6 Lakh threshold for rent under 194I and the ₹20,000 threshold for commission under 194H. After deducting and depositing TDS, the deductor must also issue a TDS certificate (Form 16 for salary / Form 16A for non-salary) to the deductee within the prescribed time.

Official Sources Used in This Calculator

Income Tax Department India - TDS sections, rates and Section 206AA no-PAN provisions Union Budget 2025 - Revised thresholds: 194I raised to ₹6L, 194H to ₹20K, new 194T CBDT - Circulars on GST exclusion from TDS base, rate clarifications

TDS Calculator India - Complete Section Reference (FY 2025-26)

Most TDS reference tables show 5-6 sections. Here's the complete picture for all sections this calculator covers - including newer ones most people don't know about:

Section	Nature of Payment	Threshold	Normal Rate	No PAN Rate	Budget 2025 Change
194J	Professional Fees (lawyers, CAs, doctors, consultants)	₹50,000/yr	10%	20%	No change
194J	Technical / Call Center fees	₹50,000/yr	2%	20%	No change
194C	Contractors - Individual/HUF	₹30K/₹1L agg	1%	20%	No change
194C	Contractors - Company/Firm	₹30K/₹1L agg	2%	20%	No change
194H	Commission / Brokerage	₹20,000/yr	2%	20%	Raised from ₹15K
194I	Rent - Land / Building	₹6,00,000/yr	10%	20%	Raised from ₹2.4L
194I	Rent - Plant & Machinery	₹6,00,000/yr	2%	20%	Raised from ₹2.4L
194IB	Rent by Ind/HUF - residential	₹50,000/mo	5%	20%	No change
194T	Salary/Commission to Partners	₹20,000/yr	10%	20%	New section
194M	Contract/Prof by Individual >₹50L	₹50,00,000	5%	20%	No change
194O	E-commerce participants (Amazon, Flipkart sellers)	₹5,00,000/yr	0.1%	5%	No change
194Q	Purchase of goods >₹50L/yr	₹50,00,000	0.1%	5%	No change
194S	Virtual Digital Assets / Crypto	₹10,000/yr	1%	20%	No change
194DA	Life Insurance Maturity (taxable portion)	₹1,00,000	2%	20%	No change

                    GST and TDS: TDS is calculated on the base amount only, excluding GST - provided GST is separately shown on the invoice. If the invoice shows a bundled amount without separating GST, TDS applies to the full amount. Always ask vendors to show GST separately on invoices. Note on Section 194A (interest income): TDS at 10% applies on FD/savings interest exceeding ₹50,000/year (₹1,00,000 for senior citizens from FY 2025-26). Banks deduct this automatically - verify your annual TDS deduction via Form 26AS.
                

TDS Calculator India - When Does TDS Not Apply?

TDS doesn't apply until you cross the threshold for that section. But what exactly counts toward the threshold is where most deductors make mistakes - leading to interest and penalties on payments they thought were TDS-free. For salaried employees, monthly TDS from payroll is part of your full CTC-to-in-hand calculation; see the Salary Breakup Calculator to model your exact take-home after TDS:

Payment Type	Threshold	What Counts Toward It	Common Mistake
Professional Fees (194J)	₹50,000/yr per deductee	All payments to the same professional during the financial year	Paying ₹45K in Feb, ₹10K in March - TDS applies from the 2nd payment retroactively
Contractor (194C)	₹30K per contract OR ₹1L aggregate	All contractor payments to same party during the year	Splitting a ₹35K contract into two ₹17.5K invoices doesn't avoid TDS - single job = single contract
Rent (194I)	₹6,00,000/yr per lessor	All rent payments to same landlord during the year	₹50K/mo rent = ₹6L by year-end - TDS of 10% applies from month 1, not just the last rupee
Commission (194H)	₹20,000/yr	All commission/brokerage to same agent during the year	Treating commission as "discount" on invoices doesn't change TDS applicability
Rent by Individual (194IB)	₹50,000/month	Monthly rent only - NOT annual aggregate	194IB is per-month (not per-year). ₹52K/mo triggers TDS even if annual rent is under ₹6.24L

TDS Calculator India - Consequences of Not Deducting TDS

Missing TDS compliance isn't just a procedural slip - it triggers a cascade of financial and legal consequences under the Income Tax Act that can cost the deductor far more than the original TDS amount:

Consequence	Section	Rate / Quantum	Practical Impact
Interest for non-deduction	201(1A)	1% per month	Runs from the date deduction was due until actual deduction - even a few months adds up fast
Interest for non-deposit	201(1A)	1.5% per month	Runs from date of deduction to date of deposit to government - even one late day counts as a full month
Expense disallowance	40(a)(ia)	30% of payment disallowed	If TDS not deducted, 30% of that payment is treated as non-deductible expense - increasing your taxable income and your income tax liability for that year
Penalty for non-deduction	271C	Equal to TDS amount	AO can levy penalty = full TDS amount that should have been deducted - separate from interest
Prosecution risk	276B	3 months to 7 years imprisonment	Wilful failure to deposit TDS collected can result in prosecution - applies to directors of companies

The math on getting it wrong: Miss TDS on a ₹1 Lakh professional fee. Interest at 1%/month for 12 months = ₹1,200. But the 30% expense disallowance means ₹30,000 extra taxable income - at 30% tax bracket = ₹9,000 additional income tax + ₹10,000 TDS penalty = ₹20,200 total cost on a ₹10,000 TDS obligation. Use this TDS calculator before every payment. See the Income Tax Calculator to model the full tax impact on your income, and the New vs Old Tax Regime guide to understand how 40(a)(ia) disallowance hits differently under each regime.

TDS in Your Daily Financial Life: FD Interest, Salary, and Freelancing

TDS on FD Interest (Section 194A) - The Most Common Non-Business TDS

Most salaried Indians encounter TDS not just on salary but also on their fixed deposit interest. Under Section 194A, banks deduct TDS at 10% (or 20% if PAN is not linked) when annual FD interest from a single bank crosses:

₹50,000/year for individuals below 60 years (raised from ₹40,000 from FY 2025-26)

₹1,00,000/year for senior citizens aged 60 and above (raised from ₹50,000)

The threshold applies per bank, not across all banks combined. So ₹49,000 interest from Bank A and ₹49,000 from Bank B = no TDS from either. But ₹51,000 from Bank A = ₹5,100 TDS deducted even if you owe zero income tax. The fix: submit Form 121 (the new unified declaration effective April 1, 2026, replacing the old Form 15G and Form 15H) at the start of each financial year to each bank where you hold FDs, declaring that your total estimated tax liability is nil. Once submitted, the bank stops deducting TDS entirely. If you missed submitting in time and TDS was already deducted, you can claim the full amount back as a refund when filing your ITR; it shows up in Form 26AS. Use the FD maturity and interest projection to know in advance whether your annual interest will cross the ₹50,000 threshold, so you can submit Form 121 before the financial year begins rather than chasing a refund afterwards.

How to Reduce TDS on Your Salary

Monthly TDS on salary is calculated by your employer based on your projected annual income and declared investments. The single most impactful way to reduce it is to submit a complete Form 12BB at the beginning of the year declaring all your deductions: HRA (if applicable), home loan interest under Section 24(b), 80C investments, 80D health insurance, and 80CCD(2) employer NPS. Employees on the old regime who declare ₹3-4 lakh in combined deductions can reduce monthly TDS by ₹4,000-8,000 depending on their slab. Under the new regime, the only meaningful TDS reduction lever is the 80CCD(2) employer NPS contribution, which is available in both regimes and has no upper cap. Use the full salary deduction and take-home breakdown to see exactly how each declared deduction reduces your monthly TDS before submitting Form 12BB.

TDS for Freelancers: Managing 194J and GST Simultaneously

Freelancers and consultants in India face a dual obligation that salaried employees do not: TDS under Section 194J (10% on professional fees above ₹30,000/year from each client) and GST at 18% on service invoices above ₹20 lakh annual turnover. These are separate, parallel obligations that operate independently. A client paying ₹1 lakh for consulting work will deduct ₹10,000 TDS and pay you ₹90,000; you then separately charge and collect ₹18,000 GST on the invoice. The TDS you lose upfront can be claimed back at ITR time through Form 26AS reconciliation. The GST you collect must be remitted to the government via GSTR-3B. Use the GST calculation on your service invoice to model the gross amount to quote clients so your net receipt after TDS equals your target income. For the complete guide to TDS rules across all sections, payment types, thresholds, and how to reconcile TDS credits with your ITR, the complete TDS India guide covers every scenario from salaried employee to freelancer to business owner.

TDS Calculator India - FAQs

What is TDS and how does it actually work in India?

TDS (Tax Deducted at Source) is a mechanism where the deductor (payer) deducts tax before making payment and deposits it with the government on behalf of the deductee (receiver). Example: You hire a CA for ₹1 Lakh. You deduct 10% TDS (₹10,000), pay ₹90,000 to the CA and deposit ₹10,000 to the government by the 7th of the following month. The CA gets credit for ₹10,000 tax already paid when filing their ITR - it reduces their final tax liability. The deductor must also issue a TDS certificate - Form 16 for salary income, Form 16A for non-salary payments - to the deductee each quarter. TDS is not an additional tax; it's advance collection of the receiver's income tax, tracked via Form 26AS linked to their PAN.

What happens if I forget to deduct TDS - what are the penalties?

The consequences compound quickly. Interest of 1% per month runs from the date TDS was due until actual deduction. Then 1.5% per month from deduction date to deposit date. The most damaging is Section 40(a)(ia) - 30% of the payment gets disallowed as a business expense, inflating your taxable profit. On top of that, a penalty equal to the TDS amount can be levied under Section 271C and wilful non-deposit risks prosecution under Section 276B (3 months to 7 years). For a missed ₹10,000 TDS obligation, the total cost including interest, disallowance tax and penalty can easily reach ₹20,000+. See the complete consequences table in this TDS calculator India page above.

How is TDS different from advance tax and income tax?

TDS (also called withholding tax) is deducted by the deductor at the point of payment - you don't control when it happens. For salaried employees, your employer deducts TDS monthly based on estimated annual income; see the Salary Breakup Calculator to see this as part of your monthly deduction breakdown. Advance Tax is proactively paid by the taxpayer in 4 instalments (15% by June, 45% by September, 75% by December, 100% by March) when your tax liability exceeds ₹10,000 and you have income not subject to TDS. Income Tax is the final computed liability when filing ITR. All three are forms of the same tax. TDS deducted from you and advance tax paid by you both get credited against your final income tax liability when you file. If the total exceeds liability, you get a refund - typically within 3-6 months of filing. Use the Income Tax Calculator to estimate your final liability.

Can TDS deducted from me be claimed as a refund when filing ITR?

Yes - completely. TDS deducted against your PAN appears automatically in your Form 26AS and Annual Information Statement (AIS). When you file ITR, this TDS gets credited against your final tax liability computed on your total income. If TDS + advance tax exceeds your liability, the difference is refunded. Refunds typically arrive within 3-6 months of filing. This is why always providing your PAN to every deductor is critical - TDS deducted without your PAN (at 20% under Section 206AA) may not appear in your Form 26AS correctly, making it harder to claim credit. Check your Form 26AS and Annual Information Statement (AIS) on the IT Department portal annually to verify all TDS credits are reflecting.

What is Section 206AA and when does 20% TDS apply?

Section 206AA states that if the deductee doesn't provide a valid PAN, TDS must be deducted at the higher of: the normal section rate, the rate in force or 20%. This means for most payments (professional fees at 10%, commission at 2%), missing PAN triggers 20% TDS instead. For 194O and 194Q (0.1% normal), no-PAN means 5% TDS - a 50x increase. If PAN is provided but invalid or incorrect, the same 20% rule applies. Practical advice for freelancers: a vendor who doesn't give PAN costs you 20% of your income upfront versus 2-10% with PAN. Always share your PAN at the start of any engagement. The "No PAN - 20% TDS" toggle in this calculator shows exactly what you or your vendor stands to lose.

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