How TDS works
Tax Deducted at Source (TDS) means the payer withholds a percentage of certain payments and deposits it with the government against the recipient's tax. This calculator applies the common section rates for FY 2025-26, checks the threshold below which no TDS is due, and shows both the TDS amount and the net payable.
If the deductee does not provide a PAN, Section 206AA requires TDS at 20% (or the section's own rate if that is higher). This is why collecting the PAN before you pay matters.
Common TDS sections and rates
Thresholds matter
Each section has a threshold below which no TDS is required. For example, rent under 194I only attracts TDS above the annual threshold, and contractor payments have their own limits. The calculator applies these automatically, if your amount is below the threshold, it shows zero TDS. Note that once you cross the threshold, TDS usually applies to the whole amount, not just the excess.
Depositing and reporting TDS
TDS you deduct must be deposited with the government by the due date (generally the 7th of the following month), and reported in a quarterly TDS return, after which the deductee can claim the credit. Late deduction or deposit attracts interest and fees. If you make regular payments that need TDS, our TDS compliance service handles deduction, deposit and the quarterly returns, and our TDS on salary guide covers Section 192 specifically.
Frequently asked
What is TDS?
Tax Deducted at Source is a system where the payer of certain incomes, salary, interest, rent, professional fees, and more, withholds a percentage of the payment and deposits it with the government against the recipient's tax liability. The recipient then claims credit for that TDS when filing their return. It ensures tax is collected as income is earned.
What happens if the deductee has no PAN?
Under Section 206AA, if the deductee does not furnish a PAN, TDS must be deducted at 20%, or at the section's normal rate if that rate is higher than 20%. This is a strong incentive to collect the PAN before making a payment, since 20% is usually much higher than the standard section rate.
Is TDS charged on the whole amount or just above the threshold?
For most sections, once the payment crosses the section's threshold, TDS applies to the entire amount, not only the portion above the threshold. Below the threshold, no TDS is due at all. This calculator applies the threshold for the section you select and shows zero when you are below it.
When must deducted TDS be deposited?
TDS deducted is generally payable to the government by the 7th of the following month (with a special date for March). It must also be reported in a quarterly TDS return so the deductee can see and claim the credit in Form 26AS. Late deposit attracts interest, and late filing of the return attracts a fee.
Do these rates cover every situation?
No, the calculator covers common resident TDS sections at their standard rates. Special cases, payments to non-residents under Section 195, lower or nil deduction certificates, and section-specific conditions, can change the rate. For anything beyond a routine deduction, confirm the correct treatment with a professional.