TDS Calculator

TDS Calculator – Calculate Tax Deducted at Source for FY 2025-26

Calculate TDS (Tax Deducted at Source) instantly for salary, interest, professional fees, rent, and other income types with accurate rates for FY 2025-26. This free calculator helps Indian taxpayers, freelancers, and businesses determine the exact TDS amount to deduct or expect, based on the latest Income Tax Act provisions and section-wise rates.

What is TDS (Tax Deducted at Source)?

TDS is a system where tax is collected at the source of income itself, rather than from the recipient later. When someone makes a payment (salary, interest, rent, professional fees, etc.), they deduct a percentage of that amount as tax and deposit it with the government on behalf of the recipient.

The purpose of TDS is to collect tax in advance throughout the year, rather than in a lump sum at the end. This ensures steady revenue for the government and prevents tax evasion. For taxpayers, TDS acts as an advance payment toward their total annual tax liability.

TDS applies to various types of payments under different sections of the Income Tax Act. Each section specifies the payment type, threshold limit, and applicable TDS rate. The person making the payment (deductor) is responsible for deducting TDS, depositing it with the government, and issuing a TDS certificate to the recipient (deductee).

Who Needs to Deduct TDS in India?

Any person or entity making specified payments above the threshold limit must deduct TDS. This includes:

Employers: Must deduct TDS on salaries under Section 192 if the employee’s income exceeds the basic exemption limit.

Businesses and Companies: Must deduct TDS when making payments for professional fees, rent, contractor payments, commission, interest, and other specified services.

Individuals and HUFs: Required to deduct TDS on certain payments if their total sales, turnover, or gross receipts exceed Rs 1 crore (for business) or Rs 50 lakh (for professionals) in the immediately preceding financial year.

Banks and Financial Institutions: Must deduct TDS on interest payments exceeding specified thresholds.

Tenants: Individuals renting property must deduct TDS if monthly rent exceeds Rs 50,000, effective from FY 2017-18 under Section 194-IB.

Failure to deduct or deposit TDS attracts penalties and interest. The deductor is liable for the TDS amount even if not deducted from the payee.

TDS Rates and Sections for FY 2025-26

Different types of payments attract different TDS rates under specific sections of the Income Tax Act. Here are the most common TDS sections and their rates for FY 2025-26:

Section 192 – Salary: TDS on salary is calculated based on the employee’s estimated annual income and applicable income tax slab rates. Employers consider the employee’s salary structure, investments under Section 80C, 80D, home loan interest, HRA, and other deductions to arrive at the taxable income, then deduct tax monthly based on slab rates.

Section 194A – Interest (Other than Interest on Securities):

• Threshold: Rs 40,000 per year for bank/post office savings interest (Rs 50,000 for senior citizens)
• Rate: 10% for residents
• Rate: 30% for non-residents (plus surcharge and cess as applicable)
• Applies to interest from fixed deposits, recurring deposits, and other bank interest

Section 194J – Professional or Technical Services:

• Threshold: Rs 30,000 per financial year
• Rate: 10% for residents (2% for technical services and call center operations)
• Rate: 30% for non-residents
• Applies to fees paid to professionals like doctors, lawyers, consultants, freelancers, architects, and technical experts

Section 194I – Rent:

• Threshold: Rs 2,40,000 per financial year
• Rate: 10% for rent of plant, machinery, or equipment
• Rate: 10% for rent of land, building, or furniture
• Applies when businesses pay rent

Section 194-IB – Rent by Individuals (Not carrying on business/profession):

• Threshold: Rs 50,000 per month
• Rate: 5%
• Applies when individuals or HUFs (not liable to audit) pay rent

Section 194C – Payment to Contractors:

• Threshold: Rs 30,000 for a single payment; Rs 1,00,000 for aggregate payment in a financial year
• Rate: 1% for resident individuals and HUFs
• Rate: 2% for resident companies
• Applies to payments for contracts, sub-contracts, and work contracts

Section 194 – Dividend:

• No threshold (effective from FY 2020-21, dividends are taxable in the hands of shareholders)
• Rate: 10% for residents if dividend exceeds Rs 5,000 per year
• Rate: 20% for non-residents (plus surcharge and cess)

Section 194H – Commission and Brokerage:

• Threshold: Rs 15,000 per financial year
• Rate: 5%
• Applies to commission paid by businesses

Section 194D – Insurance Commission:

• Threshold: Rs 15,000 per financial year
• Rate: 5% for residents
• Rate: 10% for corporate agents

Section 194DA – Payment in respect of Life Insurance Policy:

• Threshold: Rs 1,00,000 per financial year
• Rate: 5% for residents
• Rate: 30% for non-residents

Higher TDS Rate for Non-PAN Cases: If the payee does not provide their PAN to the deductor, TDS is deducted at 20% or the rate specified in the relevant section, whichever is higher. This significantly increases the TDS burden and makes it essential to furnish PAN details for all transactions.

How TDS is Calculated: Step-by-Step Process

Calculating TDS involves identifying the payment type, checking the threshold, applying the correct rate, and adding surcharge and cess where applicable. Here is the detailed process:

Step 1: Identify the Payment Type and Section

Determine which section of the Income Tax Act applies to your payment. For example, if you are paying professional fees, Section 194J applies. If paying rent, Section 194I or 194-IB applies.

Step 2: Check the Threshold Limit

Each section has a minimum threshold. If the payment amount is below the threshold, no TDS needs to be deducted. For example, if you pay Rs 25,000 as professional fees in a year and the threshold is Rs 30,000, no TDS is required.

Step 3: Determine the Applicable Rate

Based on the section and the payee’s status (resident/non-resident, individual/company, PAN available or not), apply the correct TDS rate. For example, interest on fixed deposits attracts 10% TDS for residents with PAN.

Step 4: Calculate Base TDS

Base TDS = Payment Amount × (TDS Rate / 100)

For example, if the payment is Rs 1,00,000 and the TDS rate is 10%, base TDS = Rs 1,00,000 × 10% = Rs 10,000.

Step 5: Add Surcharge (If Applicable)

Surcharge applies when the total income exceeds certain thresholds. For TDS purposes, surcharge is generally applicable on non-residents. For residents, surcharge on TDS is usually not calculated separately as it is built into the final tax computation during return filing. However, for some sections with high amounts to non-residents, surcharge may apply.

Step 6: Add Health and Education Cess

Health and Education Cess is 4% of (Base TDS + Surcharge). This is mandatory for all TDS calculations.

Cess = (Base TDS + Surcharge) × 4%

Step 7: Arrive at Total TDS

Total TDS = Base TDS + Surcharge + Cess

This is the amount to be deducted from the payment and deposited with the government.

Step 8: Issue TDS Certificate

After depositing TDS, the deductor must issue a TDS certificate to the deductee. For salary, it is Form 16. For other payments, it is Form 16A or a TDS certificate mentioning the TDS deducted and deposited.

Real-World TDS Calculation Examples

Example 1: TDS on Salary (Section 192)

Amit is an employee with an annual salary of Rs 8,00,000. His employer considers the following:

• Basic Salary: Rs 5,00,000
• HRA: Rs 1,50,000 (exempt portion calculated separately)
• Other Allowances: Rs 1,50,000
• Investment in PPF and ELSS under Section 80C: Rs 1,50,000
• Health Insurance Premium under Section 80D: Rs 25,000
• Home Loan Interest under Section 24: Rs 2,00,000

Gross Total Income = Rs 8,00,000 Less: HRA Exemption (assume Rs 80,000 exempt) Less: Section 80C deduction: Rs 1,50,000 Less: Section 80D deduction: Rs 25,000 Less: Home Loan Interest: Rs 2,00,000 Less: Standard Deduction: Rs 50,000

Taxable Income = Rs 8,00,000 – Rs 80,000 – Rs 1,50,000 – Rs 25,000 – Rs 2,00,000 – Rs 50,000 = Rs 2,95,000

Tax on Rs 2,95,000:

• Up to Rs 2,50,000: Nil
• Rs 2,95,000 – Rs 2,50,000 = Rs 45,000 at 5% (new regime) or 10% (old regime)

Assume old regime: Rs 45,000 × 10% = Rs 4,500 Add Cess: Rs 4,500 × 4% = Rs 180 Total Annual Tax = Rs 4,680

Monthly TDS = Rs 4,680 / 12 = Rs 390

The employer deducts Rs 390 per month from Amit’s salary and deposits it with the government. At the end of the year, Form 16 is issued showing total TDS deducted.

Example 2: TDS on Fixed Deposit Interest (Section 194A)

Priya has a fixed deposit with a bank. The interest earned in FY 2025-26 is Rs 60,000. She is a resident individual with PAN.

• Payment: Rs 60,000
• Threshold: Rs 40,000 (for individuals other than senior citizens)
• Since Rs 60,000 > Rs 40,000, TDS is applicable
• Rate: 10%

Base TDS = Rs 60,000 × 10% = Rs 6,000 Cess = Rs 6,000 × 4% = Rs 240 Total TDS = Rs 6,000 + Rs 240 = Rs 6,240

The bank deducts Rs 6,240 and issues Form 16A to Priya. She can claim this TDS credit when filing her income tax return.

Example 3: TDS on Professional Fees (Section 194J)

A company pays Rs 1,50,000 to a freelance consultant (resident with PAN) for services rendered.

• Payment: Rs 1,50,000
• Threshold: Rs 30,000
• Since Rs 1,50,000 > Rs 30,000, TDS is applicable
• Rate: 10%

Base TDS = Rs 1,50,000 × 10% = Rs 15,000 Cess = Rs 15,000 × 4% = Rs 600 Total TDS = Rs 15,000 + Rs 600 = Rs 15,600

The company deducts Rs 15,600, pays Rs 1,34,400 to the consultant, and deposits Rs 15,600 with the government. Form 16A is issued to the consultant.

Example 4: TDS on Rent (Section 194I)

A company pays annual rent of Rs 6,00,000 to a landlord for office premises. The landlord is a resident individual.

• Payment: Rs 6,00,000
• Threshold: Rs 2,40,000
• Since Rs 6,00,000 > Rs 2,40,000, TDS is applicable
• Rate: 10%

Base TDS = Rs 6,00,000 × 10% = Rs 60,000 Cess = Rs 60,000 × 4% = Rs 2,400 Total TDS = Rs 60,000 + Rs 2,400 = Rs 62,400

The company deducts Rs 62,400 over the year and pays the balance to the landlord. Form 16A is issued.

Example 5: TDS on Rent by Individual Tenant (Section 194-IB)

Ravi, an individual not liable to tax audit, rents an apartment for Rs 60,000 per month. Annual rent = Rs 7,20,000.

• Payment per month: Rs 60,000 (exceeds Rs 50,000 threshold)
• Rate: 5%

Monthly TDS = Rs 60,000 × 5% = Rs 3,000 Annual TDS = Rs 3,000 × 12 = Rs 36,000

Ravi deducts Rs 3,000 every month and deposits it using Form 26QC. No cess is added in this calculation (as per Section 194-IB provisions, but this may vary; always verify current rules).

Example 6: TDS on Payment to Non-Resident without PAN

A company pays Rs 2,00,000 to a non-resident consultant who does not provide PAN.

• Payment: Rs 2,00,000
• Since PAN is not available, TDS rate is higher of 20% or the rate specified in the section
• Section 194J rate for non-residents: 30%
• Higher rate: 30%

Base TDS = Rs 2,00,000 × 30% = Rs 60,000 Surcharge (if applicable for non-resident): Assume no surcharge for simplicity Cess = Rs 60,000 × 4% = Rs 2,400 Total TDS = Rs 60,000 + Rs 2,400 = Rs 62,400

The company deducts Rs 62,400 and pays Rs 1,37,600 to the consultant.

How to Use Planmyreturns TDS Calculator

The Planmyreturns TDS Calculator simplifies the entire TDS calculation process. Here is how to use it effectively:

Step 1: Select Income Type

Choose the payment category from the dropdown: Salary (Section 192), Interest (Section 194A), Professional fees (Section 194J), Rent (Section 194I), Contractor (Section 194C), Dividend (Section 194), or Other. This determines which TDS rules and rates apply.

Step 2: Enter Payment Amount

Input the total payment amount in rupees. For annual calculations like interest or professional fees, enter the total annual amount. For salary, enter the annual salary or use the salary estimate field for slab-based calculation.

Step 3: Select Taxpayer Type

Choose whether the payee is an Individual, HUF, or Firm/Company. Some sections have different rates based on the payee type. For example, contractor payments have 1% TDS for individuals/HUFs and 2% for companies.

Step 4: Select Residential Status

Indicate whether the payee is a Resident or Non-Resident. Non-residents typically face higher TDS rates. For example, interest TDS is 10% for residents but 30% for non-residents.

Step 5: Indicate PAN Status

Select whether PAN is available or not. If PAN is not provided, TDS is deducted at 20% or the section rate, whichever is higher. This significantly increases TDS liability.

Step 6: Enter Salary Estimate (For Salary TDS Only)

If you selected Salary as the income type, enter the annual taxable income estimate. The calculator will compute monthly TDS based on income tax slab rates. Leave this blank for a general indication that salary TDS is slab-based.

Step 7: Select Financial Year

Choose FY 2025-26 for current year calculations or FY 2024-25 if you need historical rates. The calculator applies the appropriate rates for the selected year.

Step 8: Choose Cess and Surcharge Option

Select “Yes” to include Health and Education Cess (4%) and surcharge (where applicable) in the final TDS amount. This gives you the actual TDS to be deducted. Select “No” to see only the base TDS without cess.

Step 9: Click Calculate

The calculator instantly displays your TDS amount, effective rate, threshold status, and advance tax offset. The breakdown table shows section details, base rate, surcharge, cess, and total TDS. Use this information to deduct the correct amount and plan your tax liability.

Step 10: Download or Share Results

Click “Download CSV” to export your calculation as a CSV file for record-keeping. Use “Share plan” or “Copy link” to share your calculation with colleagues, accountants, or clients. The shared link preserves all your inputs for easy reference.

The Planmyreturns calculator is designed to handle complex scenarios including non-resident payments, missing PAN cases, and multiple taxpayer types, making it the most comprehensive free TDS calculator available for Indian users.

Lower TDS Deduction Certificate (Form 15G and 15H)

If your total income is below the taxable limit and you do not want TDS to be deducted, you can submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens above 60 years) to the deductor.

Form 15G: Used by resident individuals (below 60 years) whose total income is below the basic exemption limit. By submitting this form to banks or other deductors, you can request that no TDS be deducted on interest or other payments.

Form 15H: Used by senior citizens (60 years and above) with similar intent. Senior citizens with income below the exemption limit can avoid TDS by submitting Form 15H.

Certificate under Section 197: If your tax liability is lower than the TDS being deducted, you can apply to the Income Tax Department for a certificate under Section 197. This certificate directs the deductor to deduct TDS at a lower rate or nil rate. This is useful for individuals with substantial deductions or losses.

To obtain a Section 197 certificate, file an application through the Income Tax e-filing portal with supporting documents showing your estimated income and tax liability. The Assessing Officer issues the certificate specifying the lower TDS rate.

TDS Payment and Return Filing Deadlines

TDS must be deposited with the government within prescribed timelines. Here are the key deadlines for FY 2025-26:

TDS Deposit Due Dates:

• For government deductors: Same day
• For other deductors: By the 7th of the following month

For example, TDS deducted in April 2025 must be deposited by May 7, 2025. Delayed deposit attracts interest at 1.5% per month.

TDS Return Filing Due Dates:

Quarterly TDS returns must be filed in the prescribed forms:

• Quarter 1 (April to June): Due by July 31
• Quarter 2 (July to September): Due by October 31
• Quarter 3 (October to December): Due by January 31
• Quarter 4 (January to March): Due by May 31

Different forms apply based on the deductor type:

• Form 24Q: TDS on salary
• Form 26Q: TDS on payments other than salary
• Form 27Q: TDS on non-residents
• Form 26QC: TDS on rent by individuals (Section 194-IB)

Late filing attracts a penalty of Rs 200 per day until the return is filed, subject to a maximum equal to the TDS amount.

TDS Credit and Claiming Refunds

TDS deducted from your income acts as an advance tax payment on your behalf. When you file your income tax return (ITR), you claim credit for the TDS deducted by providing details from Form 16, Form 16A, or your Form 26AS.

Form 26AS: This is your annual tax statement available on the Income Tax e-filing portal. It shows all TDS deducted on your income, advance tax paid, self-assessment tax, and refunds. Always verify that the TDS shown in your Form 26AS matches the TDS certificates you received.

How to Claim TDS Credit:

1. Log in to the Income Tax e-filing portal
2. Download Form 26AS or view your Annual Information Statement (AIS)
3. Note all TDS entries
4. While filing your ITR, enter TDS details in the appropriate schedules
5. The total TDS will be deducted from your total tax liability
6. If TDS exceeds your actual tax liability, you receive a refund
7. If TDS is less than your tax liability, you pay the balance

Mismatches and Corrections:

If you notice TDS deducted but not reflected in Form 26AS, contact the deductor immediately. They may not have deposited the TDS or may have entered incorrect details (like wrong PAN). The deductor must file a correction statement to rectify errors.

TDS on New Income Types (FY 2025-26 Updates)

The Income Tax Department continues to expand the scope of TDS to cover more transactions and prevent tax leakage. Here are some newer TDS provisions relevant for FY 2025-26:

Section 194-O – TDS on E-Commerce Transactions: E-commerce operators must deduct TDS at 1% on payments to e-commerce participants (sellers). This applies to sellers on platforms like Amazon, Flipkart, Swiggy, Zomato, etc. The threshold is Rs 5,00,000 per financial year.

Section 194Q – TDS on Purchase of Goods: Buyers (if total sales/turnover/gross receipts exceeded Rs 10 crore in the preceding financial year) must deduct TDS at 0.1% on purchases of goods exceeding Rs 50 lakh from a single seller in a financial year.

Section 194R – TDS on Benefits or Perquisites: Effective from July 1, 2022, any person providing benefits or perquisites (in cash or kind) exceeding Rs 20,000 in a financial year to a resident must deduct TDS at 10%. This applies to benefits given to agents, dealers, or any person in business or profession.

Section 194S – TDS on Cryptocurrency and Virtual Digital Assets: Buyers of virtual digital assets (cryptocurrency) must deduct TDS at 1% on payments exceeding Rs 10,000 (or Rs 50,000 in certain cases) in a financial year. This is applicable from July 1, 2022 onwards.

These provisions reflect the government’s focus on widening the tax net and capturing transactions in the digital economy.

Common TDS Mistakes to Avoid

Not Deducting TDS Despite Crossing Threshold:

Many small businesses and individuals are unaware of TDS obligations. For example, if you pay Rs 60,000 per month rent and do not deduct TDS under Section 194-IB, you are non-compliant. This can lead to penalties and disallowance of expenses during tax assessment.

Using Wrong PAN or Entering Incorrect Details:

TDS deposited with wrong PAN does not reflect in the payee’s Form 26AS, leading to loss of credit. Always verify PAN details before depositing TDS and filing returns. Even a single character mistake renders the TDS unclaimed.

Missing TDS Deposit and Filing Deadlines:

Late deposit attracts interest at 1.5% per month. Late filing of TDS returns attracts Rs 200 per day penalty. Set reminders for the 7th of every month and quarterly return due dates to avoid penalties.

Not Issuing TDS Certificates:

Deductors must issue TDS certificates (Form 16 or Form 16A) to payees. Not issuing certificates causes hardship to the payee who cannot claim credit. Issue certificates promptly after filing TDS returns.

Deducting TDS Without Considering Lower Deduction Certificates:

If a payee submits Form 15G, Form 15H, or a Section 197 certificate, you must honor it and deduct TDS at the lower rate or nil rate as specified. Ignoring these forms and deducting full TDS causes inconvenience to the payee.

Not Reconciling TDS with Form 26AS:

Always cross-check that TDS deducted and deposited matches the entries in Form 26AS and AIS. Discrepancies lead to notices from the Income Tax Department. File correction statements immediately if you find errors.

Applying Wrong TDS Rates for Non-Residents:

Non-residents face different rates, often higher than residents. Additionally, some payments to non-residents are subject to withholding tax under the Double Taxation Avoidance Agreement (DTAA). Check the DTAA rates before deducting TDS to avoid over-deduction or under-deduction.

Not Considering Aggregate Threshold Limits:

Some sections have aggregate annual thresholds. For example, Section 194C has a Rs 1 lakh aggregate threshold. If you make multiple small payments to a contractor totaling Rs 1.5 lakh in a year, TDS applies even if individual payments are below Rs 30,000. Track cumulative payments carefully.

TDS vs Advance Tax vs Self-Assessment Tax

Understanding the difference between TDS, advance tax, and self-assessment tax is crucial for proper tax planning:

TDS (Tax Deducted at Source): Tax deducted by the payer before making payment. The deductee receives reduced payment but gets credit for TDS when filing the return.

Advance Tax: Tax paid directly by the taxpayer in installments during the financial year if their estimated tax liability exceeds Rs 10,000. Due dates are June 15 (15% of estimated tax), September 15 (45%), December 15 (75%), and March 15 (100%).

Self-Assessment Tax: Tax paid by the taxpayer while filing the income tax return if there is any shortfall after considering TDS and advance tax. This is the final balancing payment before filing.

All three contribute to your total tax payment. TDS and advance tax are pre-payments throughout the year, while self-assessment tax is the final adjustment. Properly managing all three minimizes interest liability under Sections 234A, 234B, and 234C.

TDS for Freelancers and Gig Workers

Freelancers and gig economy workers in India increasingly face TDS deductions. Here is what you need to know:

Section 194J Applies: If you are a freelance consultant, designer, developer, writer, or professional, your clients must deduct TDS at 10% if payments exceed Rs 30,000 in a financial year.

Section 194-O Applies for E-Commerce: If you sell products or services through e-commerce platforms, the platform deducts TDS at 1% on your gross sales if they exceed Rs 5,00,000 in a year.

Collecting Form 16A: Always collect Form 16A from clients who deduct TDS. This is your proof of tax payment and essential for claiming credit in your ITR.

Planning Advance Tax: Since TDS may not cover your entire tax liability (especially if you have multiple income sources), calculate your total tax and pay advance tax to avoid interest.

Maintaining Records: Keep invoices, payment receipts, and TDS certificates organized. Reconcile TDS entries in Form 26AS regularly to ensure all deductions are credited.

Using the TDS Calculator: Use the Planmyreturns TDS Calculator to estimate how much TDS clients should deduct and plan your cash flows accordingly. Knowing your TDS in advance helps you manage working capital better.

TDS Compliance for Small Businesses

Small businesses must comply with TDS provisions to avoid penalties. Here is a practical compliance checklist:

Obtain TAN (Tax Deduction and Collection Account Number): Apply for TAN before deducting TDS. TAN is mandatory for all deductors. Apply online through the NSDL portal.

Identify TDS-Applicable Payments: Review all expenses and identify which payments attract TDS: rent, professional fees, contractor payments, commission, interest, etc.

Deduct TDS Correctly: Apply the correct section, rate, and threshold. Use the Planmyreturns TDS Calculator for accuracy.

Deposit TDS by the 7th: Deposit TDS online through the NSDL portal using Challan 281 by the 7th of the following month.

File Quarterly TDS Returns: Prepare and file Form 26Q or Form 24Q every quarter with accurate PAN details of payees.

Issue TDS Certificates: Generate and issue Form 16A to payees after filing returns.

Reconcile with Form 26AS: Verify that TDS deposited matches Form 26AS. Rectify mismatches immediately by filing correction statements.

Respond to TDS Notices Promptly: If you receive notices for non-deduction or late deposit, respond with evidence and rectify errors quickly to minimize penalties.

Following this checklist ensures smooth TDS compliance and avoids last-minute stress.

Frequently Asked Questions (FAQ)