TDS Calculator - Calculate Tax Deducted at Source TDS Calculator

What is TDS (Tax Deducted at Source)?

TDS (Tax Deducted at Source) is a mechanism introduced by the Indian Income Tax Department under which the payer deducts a certain percentage of tax at the time of making specified payments such as salary, interest, rent, commission, and professional fees. The deducted amount is deposited with the government on behalf of the payee and is reflected as a tax credit in the payee's Form 26AS. TDS is governed by various sections of the Income Tax Act, 1961, with different rates for different types of payments. This TDS calculator helps you compute the exact TDS amount on salary (Section 192), interest, rent, professional fees, and other income types for FY 2025-26.

Key Features of This TDS Calculator

• Multiple payment types — supports salary (Sec 192), bank interest (Sec 194A), rent (Sec 194I), professional fees (Sec 194J), commission (Sec 194H), contractor payments (Sec 194C), and more
• TDS on salary estimation — for salary payments, estimates TDS based on annual salary and applicable income tax slab rates under old or new regime
• PAN status handling — automatically applies the higher TDS rate of 20% when PAN is not furnished
• Custom rate option — enter any TDS percentage for non-standard payment types
• Instant breakup — view gross payment, TDS section, TDS rate, TDS amount, and net payment after deduction

TDS Rate Chart — Common TDS Rates for FY 2025-26

How to Calculate TDS on Salary — Step-by-Step

1. Enter Payment Amount: Input the gross payment amount for which TDS needs to be calculated.
2. Select Payment Type: Choose the type of payment (e.g., Salary, Bank Interest, Rent) — the TDS rate auto-fills based on the applicable section.
3. For Salary Payments: Enter the annual salary and select the tax regime (New or Old) to estimate the average TDS rate on salary.
4. Set PAN Status: Select "Yes" if the payee has furnished PAN, or "No" for higher TDS at 20%.
5. Click "Calculate TDS": View the gross payment, applicable TDS section, TDS rate, TDS amount, and net payment after TDS deduction.

Practical Examples of TDS Calculation

Example 1 — TDS on Professional Fees (Section 194J):

• Professional fee payment: ₹5,00,000
• TDS rate: 10%
• TDS Amount = ₹5,00,000 × 10% = ₹50,000
• Net Payment = ₹5,00,000 − ₹50,000 = ₹4,50,000

Example 2 — TDS on FD Interest (Section 194A):

• Annual FD interest: ₹80,000
• TDS rate: 10% (PAN furnished, interest exceeds ₹40,000 threshold)
• TDS Amount = ₹80,000 × 10% = ₹8,000
• Net Interest received = ₹72,000

Example 3 — TDS on Rent without PAN (Section 194I + 206AA):

• Monthly rent payment: ₹1,00,000
• Normal TDS rate: 10%, but PAN not furnished → higher rate: 20%
• TDS Amount = ₹1,00,000 × 20% = ₹20,000
• Net Payment to landlord = ₹80,000

Real-World Use Cases for TDS Calculation

• Employer payroll: Companies calculating monthly TDS deduction from employee salary under Section 192
• Freelancer invoicing: Freelancers and consultants verifying TDS deducted by clients on professional fee payments
• FD interest planning: Investors estimating TDS on fixed deposit interest to plan for Form 15G/15H submission
• Rent payments: Tenants (businesses) determining TDS to deduct before paying rent to landlords
• Vendor payments: Businesses calculating TDS on contractor and commission payments for compliance
• Tax credit verification: Payees cross-checking TDS amounts with Form 26AS to ensure correct credits before filing ITR

Understanding Your Results

After clicking "Calculate TDS," the results panel displays:

• Gross Payment: The total payment amount before TDS deduction.
• TDS Section: The applicable section of the Income Tax Act (e.g., Sec 192 for salary, Sec 194J for professional fees).
• TDS Rate: The percentage rate at which TDS is deducted. This is 20% if PAN is not furnished.
• TDS Amount: The actual tax deducted at source — this amount is deposited with the government.
• Net Payment (After TDS): The amount the payee actually receives after TDS deduction.

For salary payments, the TDS rate is an average rate estimated from the annual salary and applicable income tax slab, since salary TDS is spread evenly across months.

Tips & Best Practices for TDS Compliance

• Always furnish PAN: Without PAN, TDS is deducted at a punitive rate of 20% under Section 206AA, which is significantly higher than standard rates.
• Submit Form 15G/15H: If your total income is below the taxable limit, submit Form 15G (below 60) or 15H (senior citizens) to the bank to avoid TDS on FD interest.
• Verify Form 26AS regularly: Ensure all TDS deductions by employers, banks, and other deductors are correctly reflected in your Form 26AS/AIS before filing your ITR.
• Claim TDS credit in ITR: TDS is not a final tax — it is an advance tax payment. Claim it as a credit while filing your income tax return to get a refund if excess TDS was deducted.
• File TDS returns on time: Deductors must file quarterly TDS returns (Form 24Q for salary, 26Q for non-salary) to avoid penalties.
• Apply for lower TDS certificate: If your actual tax liability is lower than TDS being deducted, apply to the Assessing Officer under Section 197 for a certificate authorising lower/nil TDS.

Common Mistakes to Avoid

• Not deducting TDS when required: Failure to deduct TDS makes the payer liable for the TDS amount plus interest and penalties.
• Using wrong TDS rate: Each section has a specific rate. Applying 10% to contractor payments (which should be 1% or 2%) overstates the deduction.
• Ignoring threshold limits: TDS is applicable only when payment exceeds the threshold (e.g., ₹40,000 for bank interest, ₹2,40,000 for rent). Deducting TDS below the threshold is an error.
• Not depositing TDS on time: TDS deducted must be deposited by the 7th of the following month (30th April for March). Late deposit attracts interest under Section 201(1A).
• Confusing TDS with final tax: TDS is an advance collection. The payee must still file an ITR, claim TDS credit, and pay any additional tax or receive a refund.

Frequently Asked Questions

Q: How is TDS on salary calculated?

A: TDS on salary (Section 192) is calculated based on the employee's estimated annual income and applicable income tax slab rates. The employer computes the total annual tax, deducts standard deduction, applies the chosen regime's slabs, and divides the annual tax by 12 to deduct equal monthly TDS.

Q: What happens if TDS is deducted but I have no tax liability?

A: If TDS has been deducted but your total income is below the taxable threshold, you can file an income tax return (ITR) and claim a full refund of the TDS amount. The refund is typically processed within a few weeks of filing.

Q: When is TDS not applicable?

A: TDS is not applicable when the payment is below the specified threshold for that section, when the payee submits Form 15G/15H (for interest income), or when a lower/nil TDS certificate under Section 197 is provided.

Q: What is the TDS rate if PAN is not provided?

A: Under Section 206AA, if the payee does not furnish PAN, TDS is deducted at 20% or the rate specified in the relevant section, whichever is higher. This is a significant penalty that can be avoided by simply providing your PAN.