TDS — Tax Deducted at Source — is the income tax that the payer deducts from your payment and remits to the government on your behalf. The rate depends on the section under which the payment falls (salary, interest, rent, professional fees, contracting), the recipient's PAN status, and the threshold value. This calculator computes the exact TDS for each common section in one place.
What is TDS?
TDS is a way the Income Tax Department collects tax in advance, throughout the year, instead of waiting for everyone to file returns. Your employer deducts TDS on salary; your bank deducts TDS on FD interest above a threshold; clients deduct TDS when they pay you for professional work. The amount deducted is credited to your PAN and shows up in Form 26AS — and the rest of your tax is what you settle when filing.
If TDS is deducted at a higher rate than your actual liability (very common for freelancers in lower tax slabs), you claim a refund. If under-deducted, you pay the gap as self-assessment tax. The right amount of TDS minimises both refund delays and end-of-year shocks.
How TDS is calculated
Each payment type maps to a TDS section with its own rate and threshold. Section 192 (salary) uses your projected slab rate. Section 194A (interest) uses 10% above ₹50,000 per bank annually, or ₹1,00,000 for senior citizens. Section 194J is 10% on professional fees but only 2% on technical and call-centre services, both above ₹50,000. Section 194I (rent) is 10% on land/building rent above ₹50,000 a month, 2% on plant/machinery rent. Section 194H (commission) is 2% above ₹20,000. Section 194C (contractor) is 1% for individuals and 2% for companies.
If the recipient does not provide a PAN, TDS is deducted at 20% across all sections (or the prescribed rate, whichever is higher). Below the section threshold, no TDS is deducted at all.
- Rate
- Section TDS rate—10%, 1%, 2% — depends on payment type and PAN
- Threshold
- Annual exemption—below which no TDS is deducted; varies by section
How to use this calculator
Choose the payment type / section
Salary (192), interest (194A), professional fees (194J), rent (194I), contractor (194C) are the most common. Each has its own rate and threshold built into the calculator.
Enter the gross payment amount
The amount before any deduction. For interest, this is annual interest from one bank (separate per bank). For rent, it's annual rent per landlord. For professional fees, the invoice amount.
Confirm PAN availability
If the recipient has provided a valid PAN, the section's normal rate applies. If not, the rate jumps to 20% for most sections regardless of payment type.
Read the TDS amount and net payment
The calculator shows TDS deducted, the rate applied, and the net amount the recipient receives. For salary, also shows your projected annual TDS based on the slab.
When to use it
Freelancers and consultants
Clients deduct 10% TDS on professional fees under 194J. Track these deductions during the year — many freelancers in lower slabs end up with substantial refunds because TDS is deducted at a flat 10% even when their actual tax rate is lower.
Landlords
Tenants paying over ₹50,000 monthly to an individual landlord must deduct 2% TDS under section 194IB. Use the calculator to predict the deduction and net rent received.
Bank fixed deposits
Banks deduct 10% TDS once annual interest crosses ₹50,000 per bank (₹1,00,000 for seniors). If your total taxable income is below the basic exemption, file Form 121 at each bank to prevent TDS — this calculator shows the saving. Form 121 replaced Forms 15G and 15H on 1 April 2026.
Common mistakes to avoid
Believing TDS = total tax owed
TDS is a partial pre-payment. Actual tax depends on your full taxable income, deductions, and slab. Always file a return to settle the difference.
Forgetting to file Form 121 when applicable
If your total income is below the exemption limit, banks will still deduct TDS unless you submit Form 121 at the start of each financial year. One form per bank. Form 121 replaced the age-split Forms 15G and 15H on 1 April 2026.
Not aggregating across the year
TDS thresholds (interest, contractor, etc.) are annual cumulative, not per-payment. A bank that paid you ₹15K interest each quarter would still cross the ₹50K annual threshold by year-end and trigger TDS retrospectively on the full ₹60K.
Frequently asked questions
What is the TDS rate on professional fees?
How is TDS on bank interest calculated?
What if I don't have a PAN?
Can I avoid TDS legally if my income is below taxable?
What is Form 26AS and why does it matter?
Is TDS the final tax I owe?
References
- Income Tax Act — TDS sections 192 to 196D— Income Tax Department
- Form 26AS — TDS credit statement— Income Tax Portal