TDS Calculator

What is TDS (Tax Deducted at Source)?

TDS is the government's way of collecting income tax at the moment a payment is made, instead of waiting until the year end. The payer — a bank, a tenant, a company or a client — deducts a fixed percentage before releasing the money and deposits it with the Income Tax Department against your PAN. That credit then shows up in your Form 26AS and Annual Information Statement (AIS), and you set it off against your final tax bill when you file your return. In short, TDS is not an extra tax; it is an advance instalment of the very income tax you would owe anyway. Work out your full-year liability with the income tax calculator and treat the TDS shown here as a credit against it — if too much was deducted, you get a refund.

TDS rates and thresholds for FY 2025-26

Budget 2025 raised several TDS thresholds with effect from 1 April 2025, so smaller payments now escape deduction altogether, while the rates for these common sections stayed the same. One limit changed shape rather than size: rent under 194I is now judged on a single month, not on the year's total. This calculator covers the five payment types most people meet — deposit interest, contractor bills, professional fees, rent and commission. The table below lists the current rate and the threshold below which no TDS applies.

Two rate figures often trip people up. The 194H rate was cut from 5% to 2% from 1 October 2024, so for the whole of FY 2025-26 and FY 2026-27 commission and brokerage attract just 2%. And 194J charges 10% on professional fees but only 2% on pure technical services and call-centre payments.

How the threshold rule works

TDS applies only once your payments to a payee cross the section limit — usually a total for the financial year, though 194I tests a single month's rent and 194C also tests a single bill. Below the limit, nothing is deducted. But once you are over it, TDS is charged on the full amount, not merely on the part above the threshold. For example, FD interest of ₹48,000 attracts no 194A TDS, but interest of ₹60,000 has 10% deducted on the entire ₹60,000, giving ₹6,000 of TDS.

• 194A — the ₹50,000 limit is per bank, aggregated across all branches; senior citizens enjoy a higher ₹1,00,000 limit.
• 194C — a single contract payment above ₹30,000 triggers TDS even if the yearly total is under ₹1,00,000.
• 194I — there is no yearly limit at all: TDS applies once the rent for a month, or part of a month, crosses ₹50,000.
• 194H and 194J — the ₹20,000 and ₹50,000 limits are cumulative over the year for that payee.

194I: rent is tested per month, not per year

This is the limit people get wrong most often. Since 1 April 2025, Section 194I no longer looks at the year's rent — TDS applies when the rent for a month, or part of a month, is more than ₹50,000. The old ₹2,40,000-a-year test was replaced, not raised, so the ₹6,00,000 you often see quoted is simply what ₹50,000 a month adds up to over twelve months, not a limit in its own right.

Pay ₹90,000 a month for six months and the year's rent is ₹5,40,000 — below ₹6,00,000 — but every one of those months crossed ₹50,000, so 10% comes off the whole ₹5,40,000, giving ₹54,000 of TDS. The reverse also holds: ₹45,000 a month for a full year is the same ₹5,40,000 and attracts nothing. The yearly figure settles the question in one direction only — rent above ₹6,00,000 for the year cannot happen without some month crossing ₹50,000, so it always attracts TDS. That is why the calculator asks for one month's rent alongside the year's total; leave the monthly box empty and it falls back to the yearly average.

No PAN? The 20% rule under Section 206AA

If you do not furnish a valid PAN to the payer, Section 206AA requires TDS at the higher of the normal section rate or 20%. So a ₹2,00,000 professional fee that would face 10% (₹20,000) instead loses 20% (₹40,000) when PAN is missing. Because 20% is higher than every common section rate here, the no-PAN option in this tool simply applies 20% across the board. The extra deduction is still your tax — you can eventually claim it — but it hurts cash flow and is entirely avoidable.

Worked example: professional fee to a consultant

A company pays a freelance consultant ₹2,00,000 during FY 2026-27 under Section 194J. The payment is above the ₹50,000 threshold, so TDS applies on the whole amount. Here is how the two PAN scenarios compare:

Either way the consultant claims the deducted amount when filing, but quoting PAN keeps ₹20,000 of working capital in hand through the year rather than tied up as excess TDS.

194A: TDS on your fixed-deposit interest

The most common brush with TDS for ordinary savers is on interest. Under Section 194A a bank deducts 10% once your interest for the year crosses ₹50,000 (₹1,00,000 for senior citizens). Note this is on interest, not the deposit — see the FD calculator or the RD calculator to estimate the interest a deposit will earn. If your total income is below the taxable limit, you can submit Form 15G (or 15H for seniors) so the bank does not deduct TDS at all. And if the bank has already deducted more than your actual liability, you reclaim the difference as a refund in your return.

How TDS fits your salary and final tax

Salary itself is covered by a different section (192), where your employer deducts TDS every month based on your projected annual tax. The salary calculator shows how that shapes your in-hand pay, and if you claim house rent allowance, the HRA exemption calculator helps size the relief that lowers monthly TDS. Whatever the section, the principle is identical: every rupee of TDS is a prepayment of your income tax. At filing you add up all TDS credits from Form 26AS, compare them with your computed liability, and either pay the small balance or claim a refund. Because the thresholds rose in Budget 2025, review whether deposits or side-income that used to attract TDS still cross the new limits — many now fall below and leave more cash in your hands through the year.