TDS Calculator (Tax Deducted at Source)

Calculate your transactional tax deduction rates, thresholds, and net payouts under various Income Tax sections.

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Transaction Settings

Gross Payment Amount

₹

TDS Section & Nature of Payment

Payee Category

Payee Has Valid PAN Card?

Gross Amount

₹1,00,000

Invoice / Payment value

TDS to Deduct

₹10,000

TDS Rate applied: 10%

Net Payout to Payee

₹90,000

Amount credited after tax deduction

Rule Specific details: Section 194J

Applicable on professional fees, royalty, director fees, etc. (reduced to 2% for technical services / call centers in some cases).

Statutory Threshold:₹30,000

Standard Rate:10%

What is TDS (Tax Deducted at Source)?

Concept & Deductor Responsibility

TDS is a government mechanism designed to collect taxes right at the source of generation. Under the Indian Income Tax Act:

The Deductor: The person/business making a payment (like salary, rent, or professional fees) must deduct the tax before transferring the funds to the payee.
The Payout: The deducted amount must be deposited with the government on behalf of the payee. The payee gets credit for the TDS in their Form 26AS, which they offset against their final tax liability during annual filing.

Why Inflation Doesn't Apply to TDS

Inflation Reality: TDS is a transaction-level, immediate tax collection tool. Since tax is deducted and credited to the government at the exact moment the income is paid out, inflation does not erode the TDS percentage itself.

However, businesses must understand cash flow dynamics: a high TDS rate (or PAN penalty rate of 20%) locks up valuable working capital in tax refunds for months before the final annual assessment is completed, creating an opportunity cost.