Loading your workspace. Please wait...
Loading your workspace. Please wait...
Loading your workspace. Please wait...
Search instantly through 50+ Income Tax sections to find exact TDS thresholds and rates. Verify penalties for missing PANs and automate your accounting workflow.
Salary
TDS To Be Deducted
₹0
Amount under threshold
Net Amount Payable
₹1,50,000
Transferred to Payee
The gross payment amount of ₹1,50,000 is strictly below the regulatory threshold of ₹2,50,000. You do not need to deduct any TDS.
Tax Deducted at Source (TDS) implies the payer is legally forced to withhold a percentage of the payment and directly submit it to the Income Tax Department on behalf of the receiver.
This formula is only triggered if the Gross Amount strictly exceeds the Section's Threshold limit.
Need help understanding your results?
Connect with a verified Chartered Accountant for personalised advice.
Book Free ConsultationTax Deducted at Source (TDS) is the government's most powerful tax collection mechanism. It forces the payer to deduct tax at the point of payment itself — covering salaries, rent, professional fees, interest, commissions, and 50+ other transaction types. Understanding TDS is critical for every business, employer, freelancer, and investor in India.
When a payer (employer, tenant, client) needs to make a payment that exceeds the section's threshold, TDS obligation is triggered.
The payer deducts the applicable TDS percentage from the gross payment before transferring the net amount to the payee.
The payer deposits the deducted TDS with the government using Challan 281 by the 7th of the following month.
The payer files a quarterly TDS return (Form 24Q/26Q/27Q) with details of every deduction made.
Payer issues Form 16 (salary) or Form 16A (non-salary) to the payee as proof of TDS deducted.
TDS appears in the payee's Form 26AS. When they file their ITR, this is treated as 'Tax Already Paid' — resulting in either NIL tax or a refund.
Mandates 10% TDS strictly on consulting fees, legal fees, royalties, and director fees crossing ₹30,000.
Dictates 1% TDS (for Individuals) or 2% (for Companies) on heavy contract work like construction, logistics, and catering exceeding ₹1 Lakh annually.
Requires 10% TDS on commercial or residential rent if the total annual payment to the landlord crosses ₹2,40,000.
Forces Banks to deduct 10% on your FD interest if your earnings exceed ₹40,000 (₹50,000 for Senior Citizens) in a single financial year.
Beyond the Big 4, these sections frequently catch businesses off-guard during IT audits:
Ananya, receives ₹1.2L/month from a Bangalore startup for design consulting
💡 If her actual tax liability (after expenses under 44ADA) is only ₹80,000, she gets ₹64,000 REFUND from the IT department.
Mr. Sharma, owns office space in Gurgaon, receives ₹3L/month from a MNC tenant
💡 Mr. Sharma must show ₹36L as rental income in ITR. The ₹3.6L TDS is pre-paid tax credit. After deducting 30% standard deduction on rental income, his actual tax may be lower — resulting in a partial refund.
Mrs. Lakshmi, 67, has ₹25L in FDs across two banks at 7.5% interest
💡 Form 15H is the most powerful TDS-avoidance tool for senior citizens. If total income is below ₹5L (Old Regime), submit Form 15H to EACH bank and pay ZERO TDS on FD interest — completely legally.
If your total income is below the taxable limit, submit Form 15G (below 60) or Form 15H (60+) to your bank at the START of the financial year. This prevents TDS deduction on FD interest entirely. You must submit it to EACH bank separately.
Your Form 26AS is the government's master record of all TDS deducted against your PAN. If a deductor fails to deposit TDS after deducting it, the credit won't appear. Check quarterly and follow up immediately with the deductor.
Freelancers and contractors: if 10% TDS is killing your cash flow, apply for a Lower/Nil TDS certificate via Form 13 on TRACES. Process takes 15-30 days. Once approved, your client deducts at the reduced rate for the rest of the FY.
Before making any payment above ₹50K, run the 206AB compliance check on the Income Tax portal. If the payee is a 'Specified Person' (non-filer), you must deduct TDS at DOUBLE the normal rate or 5%, whichever is higher.
TAN Requirement: Every person responsible for deducting TDS must obtain a Tax Deduction and Collection Account Number (TAN) under Section 203A. TAN must be quoted in all TDS challans, returns, and certificates. Failure to apply for TAN attracts a penalty of ₹10,000.
Interest on Late Deposit: Section 201(1A) charges interest at 1% per month (from deduction date to deposit date) for late TDS deposit, and 1.5% per month if TDS was not deducted at all (from the date TDS was deductible to the date of actual deduction).
Section 40(a)(ia) — The Silent Killer: If you fail to deduct TDS on payments where it's applicable, the ENTIRE expenditure may be disallowed as a business expense (30% disallowance), dramatically increasing your taxable business income.
Disclaimer: TDS rates and thresholds are subject to amendments via Finance Acts and CBDT notifications. This calculator reflects rates as of FY 2026-27. For NRI payments (Section 195), DTAA rates may override domestic rates — consult a CA for cross-border transactions.
TDS compliance is interconnected with your broader tax strategy: