What is TDS (Tax Deducted at Source) under Indian Income Tax?

Tax Deducted at Source (TDS) is a direct taxation mechanism under the Indian Income Tax Act, 1961. The deductor (payer) deducts a specified tax percentage before releasing payments (contractor fees, professional services, rent, property purchase) and remits it directly to the Central Government.

What is the penalty if a payee does not provide their PAN (Section 206AA)?

Under Section 206AA, if the deductee fails to furnish a valid, Aadhaar-linked PAN, tax must be deducted at the higher of: 20%, the rate specified in the Act, or twice the normal rate. For technical services (Section 194J) or contractors (Section 194C), the deduction jumps immediately to a flat 20%.

Is TAN required to deduct 1% TDS on property purchase (Section 194-IA)?

No. Individual buyers purchasing immovable property worth ₹50 Lakh or more do not need a Tax Deduction Account Number (TAN). The 1% TDS is paid using the buyer's and seller's PAN through the Form 26QB challan-cum-statement on the Income Tax portal.

What is the difference between Section 194C and Section 194J?

Section 194C covers payments for 'work' contracts (advertising, transport, catering, printing) with rates of 1% (for Individual/HUF) and 2% (for companies). Section 194J covers professional services (doctors, lawyers, chartered accountants at 10%) and technical services (at 2%).

What are the due dates and interest for late TDS deposit?

TDS must be deposited by the 7th of the following month (30th April for March). Delayed deduction attracts 1% interest per month under Section 201(1A), and delayed deposit attracts 1.5% interest per month. Late filing of quarterly returns incurs a mandatory fee of ₹200 per day under Section 234E.

Should TDS be deducted on the invoice amount including GST?

No. CBDT Circular 23/2017 clarified that where GST (CGST, SGST, IGST) is indicated separately on the supplier's invoice, TDS is to be deducted strictly on the taxable value excluding the GST component.

Indian Direct Tax (CBDT) · FY 2024–25 & FY 2025–26

TDS Calculator

Calculate exact withholding tax under the Indian Income Tax Act. Instant computations for Section 194C, 194J, 194I, 194-IA, 194-IB, and Section 206AA non-PAN penal rates. Last verified 1 October 2026.

Standard rate

2.0%

Select Section

PAYEE PAN STATUS (SEC 206AA)

TDS Withholding rate

Invoice / Bill Amount₹1,000 – 10,00,000

₹

Exemption threshold crossed — TDS deduction mandatory

Quick presets

TDS Deductible

Section 194C

Tax to be deducted and remitted to Central Government via Challan ITNS 281 / 26QB.

Gross Bill / Invoice Value: ₹1,50,000
Applicable TDS Rate: 2%
TDS to be Deducted: ₹3,000
Net Remittance to Payee: ₹1,47,000
Return Form & Challan: ITNS 281 (Form 26Q)
Deposit Due Date: 7th of Next Month

Net Remittance vs. TDS Deducted1,50,000

Net to Payee98.0% TDS Deducted2.0%

TDS must be deposited by 7th of the following month (30th April for March). Section 206AA levies 20% if PAN is missing or inoperative.

The calculation runs entirely in your browser. Nothing you enter is stored or sent anywhere.

STANDARD RATE

1% / 2% / 10%

DEPOSIT DUE DATE

7th of Next Month

NO-PAN PENALTY

Flat 20.00% (Sec 206AA)

QUARTERLY RETURN

Form 24Q / 26Q

Provisions last verified: 1 October 2026 · Income Tax Department — Direct Taxes (CBDT)

TDS statutory provisions & rules

Last updated: 1 October 2026

Tax Deducted at Source (TDS) is collected at the point of income generation under the Income Tax Act, 1961. The provisions below detail statutory thresholds, deduction rates, and compliance requirements.

Statutory TDS rules & parameters

Standard withholding rate	2.0% (Contractors / FTS / Commission)
Non-PAN penal rate (206AA)	Flat 20.00% if PAN missing or inoperative
Deposit deadline	7th of following month (30th April for March)
Quarterly return forms	Form 24Q (Salary) / Form 26Q (Non-Salary)
Property purchase (194-IA)	1% on consideration >= ₹50 Lakh (Form 26QB)
High rent (194-IB)	2% on rent > ₹50,000/mo (Form 26QC)
Late deposit interest	1.5% per month under Section 201(1A)
Late filing fee	₹200 per day under Section 234E
Governing statute	Income Tax Act, 1961 (CBDT, Government of India)

Worked TDS examples with real numbers

Three practical transaction scenarios worked out end-to-end. Shows the gross invoice value, applicable TDS deduction, and net balance remitted to the payee.

Gross Bill / Amount	TDS Deductible	Rate Applied	Total Withholding	Net Remittance
₹50,000 (CA Bill 10%)	₹5,000 TDS	10%	₹5,000	₹45,000 Net
₹1,50,000 (Contractor 2%)	₹3,000 TDS	2%	₹3,000	₹1,47,000 Net
₹65,00,000 (Flat Purchase 1%)	₹65,000 TDS	1%	₹65,000	₹64,35,000 Net

TDS section comparison matrix

Withholding rates based on the latest Finance Act notifications. Ensure deductee PAN status is verified to avoid the 20% Section 206AA penalty.

Section	Rate	Nature	Threshold	Compliance Rules	Challan & Form	Deposit Due Date
Section 194C (Contractors)	1% Ind/HUF \| 2% Others	Works contract	₹1,000 / ₹30k single / ₹1L aggregate	TDS deducted on bill value excluding separate GST. Deposited via ITNS 281.	Due by 7th of next month (30th April for March).	Quarterly Return Form 26Q
Section 194J (Professional & Tech)	10% Professional \| 2% Tech	Service fees	₹1,000 / ₹30,000 annual limit	10% for CA, doctors, legal, architects. 2% for software & BPO call centers.	Director remuneration has ₹0 threshold (TDS from ₹1).	Quarterly Return Form 26Q
Section 194I (Rent)	10% Building \| 2% Machinery	Rental lease	₹1,000 / ₹2,40,000 annual limit	Applies to entities subject to tax audit. Excludes refundable security deposits.	TDS deducted at time of credit or payment.	Quarterly Return Form 26Q
Section 194-IA (Property Purchase)	1.0% on sale price	Sale deed	₹50,00,000 / No upper limit	Buyer deducts 1% if price or stamp duty >= ₹50 Lakh. No TAN required.	Deposited via Challan 26QB within 30 days of month-end.	Challan-Return Form 26QB
Section 194-IB (Tenant Rent > 50k)	2.0% (Reduced in 2024)	Tenancy period	₹50,000/mo / No upper limit	Deducted once a year in March by non-audit individuals using PAN.	Deposited via Challan 26QC within 30 days of month-end.	Challan-Return Form 26QC
Section 194A (Interest on FDs)	10.0% p.a.	Deposit tenure	₹1,000 / ₹40k (₹50k Seniors)	Banks and post offices deduct 10% on interest exceeding ₹40k.	Form 15G / 15H can be submitted for nil deduction.	Quarterly Return Form 26Q

Recent TDS rate rationalizations

Key direct tax rate revisions enacted under recent Union Budgets to ease business compliance and corporate liquidity.

Finance Act / Year	Amendment Description
Finance Act 2020	194J split: 2% Technical / 10% Professional
Finance Act 2021	Section 194Q introduced: 0.1% on goods > ₹50L
Finance Act 2022	Section 194R introduced: 10% on business perks
Finance Act 2023	Section 194BA introduced: 30% on online gaming
Finance (No. 2) Act, 2024Current Law	194H, 194M & 194-IB reduced to 2%, 194-O to 0.1% (w.e.f. 1 Oct 2024)

A fuller breakdown lives on Due Dates and Rate Chart.

Explore direct tax compliance

Detailed directories, return filing calendars, and step-by-step withholding walkthroughs.

Complete TDS rate chart

Section-wise directory of withholding rates, revised thresholds, payee categories, and quarterly return forms for FY 2024–25 & FY 2025–26.

TDS due dates & calendar

Statutory deadlines for monthly challan deposits (ITNS 281), quarterly returns (24Q/26Q), and late fees under Section 234E.

Section 194-IA property TDS

1% withholding on real estate purchase >= ₹50 Lakh. Complete step-by-step walkthrough for Form 26QB filing without TAN.

All compliance articles

In-depth guides on Section 194C, 194J, 194I, Section 206AA non-PAN penalties, and verifying tax credits in Form 26AS.

Reference guides & articles

All 6 articles

The calculator answers the maths. These answer the rest — Section 194C, 194J, 194-IA property TDS, and Form 26AS verification.

Questions and answers

Last updated: 1 October 2026

Common questions regarding withholding thresholds, late fees, and Form 26AS.

Tax Deducted at Source (TDS) is a direct taxation mechanism under the Indian Income Tax Act, 1961. The deductor (payer) deducts a specified tax percentage before releasing payments (contractor fees, professional services, rent, property purchase) and remits it directly to the Central Government.
Under Section 206AA, if the deductee fails to furnish a valid, Aadhaar-linked PAN, tax must be deducted at the higher of: 20%, the rate specified in the Act, or twice the normal rate. For technical services (Section 194J) or contractors (Section 194C), the deduction jumps immediately to a flat 20%.
No. Individual buyers purchasing immovable property worth ₹50 Lakh or more do not need a Tax Deduction Account Number (TAN). The 1% TDS is paid using the buyer's and seller's PAN through the Form 26QB challan-cum-statement on the Income Tax portal.
Section 194C covers payments for 'work' contracts (advertising, transport, catering, printing) with rates of 1% (for Individual/HUF) and 2% (for companies). Section 194J covers professional services (doctors, lawyers, chartered accountants at 10%) and technical services (at 2%).
TDS must be deposited by the 7th of the following month (30th April for March). Delayed deduction attracts 1% interest per month under Section 201(1A), and delayed deposit attracts 1.5% interest per month. Late filing of quarterly returns incurs a mandatory fee of ₹200 per day under Section 234E.
No. CBDT Circular 23/2017 clarified that where GST (CGST, SGST, IGST) is indicated separately on the supplier's invoice, TDS is to be deducted strictly on the taxable value excluding the GST component.

About this site

A fast, independent direct tax calculator for Tax Deducted at Source (TDS) under the Indian Income Tax Act. You select a section and enter the bill amount. It shows the exact TDS deductible, net payable to payee, statutory challan, and deposit deadline. That's the whole job.

The maths runs locally in your browser. Nothing you type is sent to a server or stored. The tax rates and exemption thresholds are pinned to the latest Union Budget Finance Acts. When CBDT revises a provision, we update it immediately.

We are not part of the Income Tax Department or any government body, and we do not sell financial products. Consult a qualified Chartered Accountant (CA) for official return filings. Read our disclaimer before acting on anything here.

Maintained by an independent direct tax research team. Provisions verified against official CBDT circulars. Provisions last verified: 1 October 2026. More on the about page.

Contact & Corrections

Spotted a discrepancy, got a question, or want a new section added? Email hello@tdscalculators.com or use the form below. It opens your email client with the message pre-filled, so nothing you write is stored on a server.

Maintained by an independent direct tax research team. Provisions verified against official CBDT circulars. This page is informational and not affiliated with the Income Tax Department; see our disclaimer.