TDS Calculator
Calculate Tax Deducted at Source (TDS) on professional fees, rent, salaries, and contractor payments.
Understanding Tax Deducted at Source (TDS)
Tax Deducted at Source (TDS) is a means of collecting income tax in India, governed under the Indian Income Tax Act of 1961. The concept is that the person or company making the payment (deductor) deducts a certain percentage of the payment as tax before transferring the balance to the receiver (deductee).
Common TDS Rates in India
Different types of payments have different TDS rates. For example, Section 194J covers professional and technical services at 10% (or 2% for certain cases), Section 194C covers payments to contractors at 1% or 2%, and Section 194I covers rent at 10%.
Worked Example
- You are a freelancer raising an invoice for Professional Services (Section 194J).
- Invoice Amount: ₹50,000
- TDS Rate: 10%
- TDS Deducted = ₹5,000.
- Net Payment Received in your bank = ₹45,000.
- You can claim this ₹5,000 TDS credit when filing your Income Tax Return.
Frequently Asked Questions
Can I claim a refund for TDS deducted?
Yes, if your total tax liability for the year is less than the TDS deducted, you can claim a refund by filing your Income Tax Return (ITR).
What happens if I don't provide my PAN?
If you fail to provide your PAN (Permanent Account Number) to the deductor, TDS is deducted at a higher rate, typically 20%. These are estimates and may not reflect actual values. Always verify important calculations independently.