TDS Calculator

Nature of Payment (Section)

Recipient Type

Payment Amount

5.00 Lakhs

₹

PAN Available

Senior Citizen (60+)

TDS Amount

₹50,000

at 10% TDS rate

Payment Breakdown

Gross payment, TDS deduction, and net amount receivable

Gross Payment₹5,00,000

TDS Deducted (10%)− ₹50,000

Net Payment (After TDS)₹4,50,000

194A – Interest from Banks/Post Office

Interest on deposits with banks, co-operative societies, or post office

TDS Rate

10%

Threshold

₹50,000

No PAN Rate

20%

Effective Rate

10%

₹1,00,000 for senior citizens (60+)

What Is TDS (Tax Deducted at Source)?

Understanding India's advance tax collection mechanism

TDS (Tax Deducted at Source) is a system introduced by the Indian Income Tax Department to collect tax at the point of income generation. Under this system, the person making a payment (deductor) is required to deduct a certain percentage of tax before making the payment to the recipient (deductee).

The deducted amount is deposited with the government on behalf of the recipient, who can claim credit for the TDS when filing their Income Tax Return (ITR). TDS applies to various types of payments including salary, interest, rent, commission, professional fees, and contractor payments.

TDS Calculation Formula

How TDS is computed on different payments

Basic TDS Formula

TDS Amount = Payment Amount × TDS Rate ÷ 100

TDS is calculated on the full payment amount when it exceeds the threshold limit specified for each section. If the payment is below the threshold, no TDS is deducted.

No PAN Penalty

Without PAN: TDS Rate = Max(Standard Rate, 20%)

5% for Sections 194-O (e-commerce) and 194Q (purchase of goods)

If the recipient does not furnish their PAN, TDS is deducted at the higher of the applicable rate or 20% as per Section 206AA. For e-commerce transactions (Section 194-O) and purchase of goods (Section 194Q), the no-PAN rate is 5% instead of 20%.

Key TDS Rates for FY 2025-26

Commonly used TDS sections and their rates

Section	Nature	Rate	Threshold
194A	Interest (Bank)	10%	₹50,000
194C	Contractor (Ind.)	1%	₹30,000
194H	Commission	2%	₹20,000
194I(b)	Rent (Building)	10%	₹50,000
194J	Professional Fees	10%	₹50,000
194B	Lottery/Gambling	30%	₹10,000
194IA	Property Sale	1%	₹50,00,000

Late Payment Interest & Penalties

Consequences of late TDS deduction and deposit

Section 201(1A) — Interest on Late Payment

TDS not deducted

1% per month (or part thereof) from due date of deduction to date of actual deduction.

TDS deducted but not paid

1.5% per month (or part thereof) from date of deduction to date of actual payment to government.

Section 234E — Late Filing Fee

A fee of ₹200 per day is levied for each day of delay in filing TDS return (Form 24Q, 26Q, 27Q, or 27EQ). The total fee is capped at the TDS amount — it cannot exceed the total tax deducted.

Section 271H — Penalty for Non-Filing

An Assessing Officer may impose a penalty between ₹10,000 and ₹1,00,000 for failure to file TDS returns within the prescribed deadline. This is in addition to the Section 234E late fee.

Real World Example

Step-by-step TDS calculation on professional fees

Scenario

A company pays ₹5,00,000 to a consultant for professional services (Section 194J). The consultant has provided their PAN.

Calculation Steps

1. Payment amount: ₹5,00,000
2. Threshold for 194J: ₹50,000 — TDS applies
3. TDS rate (with PAN): 10%
4. TDS: ₹5,00,000 × 10% = ₹50,000
5. Net payment: ₹5,00,000 − ₹50,000 = ₹4,50,000

Key Takeaways

Company deposits ₹50,000 with the government by the 7th of the next month (or 30th April for March).
Without PAN: TDS would be 20% = ₹1,00,000 instead of ₹50,000.

TDS Return Due Dates

Quarterly filing deadlines for TDS returns

Quarter	Period	Due Date (Non-Govt)	Due Date (Govt)
Q1	Apr – Jun	31st July	31st July
Q2	Jul – Sep	31st October	31st October
Q3	Oct – Dec	31st January	31st January
Q4	Jan – Mar	31st May	31st May

Frequently Asked Questions

Common questions about TDS calculation, rates, and compliance in India