TDS Calculator

Item	Amount
Gross payment	₹2,00,000
Previously paid this year	₹0
Aggregate for threshold test	₹2,00,000
Threshold (194C)	₹30,000
Rate applied	1%
TDS deducted	₹2,000
Net payable	₹1,98,000

What is TDS?

Tax deducted at source (TDS) is income tax collected at the time a payment is made. Whoever pays salary, rent, professional fees, commission, interest or contract payments above a threshold must deduct tax at the rate set for that type of payment and deposit it with the government. The person receiving the payment gets credit for it against their final tax.

This TDS calculator finds the TDS on a payment under the common sections, applies the single-payment and annual thresholds, the lower rates for individual contractors, and the higher 20% rate when the payee has no PAN.

How this calculator works

Tax deducted at source shifts collection to the moment income is paid. The payer withholds a percentage, deposits it with the government against the payee’s PAN, and hands over the balance. The payee then claims that amount as credit in their return.

Two things determine the deduction, and the threshold matters as much as the rate. Below the threshold nothing is deducted at all. Above it, deduction applies to the full payment — not just the excess, which is the opposite of how income tax slabs work and a frequent source of confusion.

Thresholds are tested on the aggregate paid to that person in the financial year, not on each bill. Section 194C has two: ₹30,000 for any single payment and ₹1,00,000 in aggregate. Crossing either one triggers deduction.

Section 206AA is the sting. If the payee does not furnish a PAN, you must deduct at the higher of the prescribed rate or 20%. On a 1% contractor payment that is a twentyfold increase, and the payee cannot claim credit without a PAN either.

Formula

If aggregate payments > threshold:
    TDS = payment × applicable rate

Applicable rate = prescribed section rate,
                  or 20% if no PAN (section 206AA),
                  whichever is higher

Net payable = payment − TDS

Worked example

₹2,00,000 paid to an individual contractor under section 194C, with a PAN on record.
The aggregate exceeds the ₹1,00,000 annual threshold, so deduction applies at 1%.
TDS is ₹2,000 and the contractor receives ₹1,98,000. Without a PAN it would be ₹40,000 at 20%.

Common TDS rates and thresholds

Section	Payment	Rate	Threshold
194C	Contractors	1% (individual/HUF), 2% (others)	₹30,000 per payment or ₹1 lakh a year
194J	Professional fees	10%	₹50,000 a year
194J	Technical services	2%	₹50,000 a year
194-I	Rent of land, building or furniture	10%	₹50,000 a month
194-I	Rent of plant and machinery	2%	₹50,000 a month
194H	Commission or brokerage	2%	₹20,000 a year
194A	Interest (banks, post office)	10%	₹50,000 a year (₹1 lakh for seniors)
194	Dividends	10%	₹10,000 a year
194-IA	Purchase of property	1%	Consideration of ₹50 lakh or more

Without a valid PAN, TDS is deducted at the higher of the section rate and 20%. Rates and thresholds change with Finance Acts — check the current rules before relying on them.

Assumptions & important notes

What this calculator assumes

Rates reflect FY 2025-26 and FY 2026-27. TDS rates change frequently — verify against the current Finance Act before making a live deduction.
No lower-deduction or nil-deduction certificate under section 197 has been obtained by the payee.
The payment is not to a non-resident. Payments abroad fall under section 195 with entirely different rules and rates.
Surcharge and cess are not added. These apply only to non-resident payments, not to resident TDS.

Important notes

TDS must be deposited by the 7th of the following month. For March deductions the due date is 30 April.
Late deposit attracts interest at 1.5% per month, and late deduction at 1%, calculated from the date the tax should have been deducted.
Quarterly returns are due in Form 26Q for resident non-salary payments; late filing carries a ₹200-per-day fee.
Failure to deduct can cause 30% of the expense to be disallowed under section 40(a)(ia) when computing business income.
The payee sees the credit in Form 26AS and the Annual Information Statement once the return is filed.

Frequently asked questions

Is TDS deducted on the amount above the threshold or the whole payment?

The whole payment, once the threshold is crossed. This is unlike income tax slabs, where only the excess is taxed at the higher rate. Crossing a TDS threshold by ₹1 makes the entire payment liable.

What happens if the payee has no PAN?

Section 206AA requires deduction at the higher of the prescribed rate or 20%. Worse, without a PAN the deduction cannot be credited to the payee, so they lose the money entirely. Always collect the PAN first.

Do thresholds apply per bill or per year?

Per financial year, aggregated across all payments to the same person under the same section — which is why the calculator asks what you have already paid. Section 194C additionally has a per-payment threshold of ₹30,000.

Can the payee avoid TDS if their income is below the exemption limit?

Yes. They can apply under section 197 for a lower or nil deduction certificate, or file Form 15G or 15H for interest income. Without one of those, you must deduct.

What is the difference between 194J professional and technical services?

Professional services — legal, medical, accountancy, engineering, architecture — attract 10%. Technical services attract 2%. The distinction is frequently litigated, so classify carefully.

How can I check the TDS deducted on my income?

Log in to the income tax e-filing portal and view Form 26AS or the Annual Information Statement (AIS), which list every deduction reported against your PAN. Your deductor also issues Form 16 (salary) or Form 16A (other payments).

When must TDS be deposited?

Generally by the 7th of the following month, and by 30 April for deductions made in March. Late deposit attracts interest.

Net to payee	₹1.98 L	99.0%
TDS to government	₹2,000	1.0%

Deduction working

About the TDS Calculator