Common questions asked by accountants, freelancers, property buyers, and businesses before deducting 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.
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.
Maintained by an independent direct tax research team. Provisions verified against official CBDT circulars. Provisions last verified: 1 October 2026. This page is informational and not affiliated with the Income Tax Department; see our disclaimer.