Tax Deducted at Source is the part of a payment you hold back and deposit with the government on the payee's behalf. Get it wrong — deduct too little, miss a threshold, or pay late — and the expense can be disallowed at 30% under Section 40(a)(ia), with interest and late fees on top. This calculator covers the sections small businesses meet every month — 194C contractors, 194J professional and technical fees, 194I rent, 194A interest, 194H commission, 194Q purchases — with the FY 2026-27 thresholds, the individual/HUF rate variants, and the 20% no-PAN rule.
Rates and thresholds for FY 2026-27
| Section | Payment | Rate | Threshold |
|---|---|---|---|
| 194C | Contractors, sub-contractors, job work, advertising, transport | 1% (individual/HUF payee), 2% (others) | ₹30,000 per contract or ₹1,00,000 aggregate in the year |
| 194J | Professional fees (CA, lawyer, doctor, consultant) | 10% | ₹50,000 per year |
| 194J | Technical services, call centres, royalty on films | 2% | ₹50,000 per year |
| 194I | Rent — land, building, furniture | 10% | ₹6,00,000 per year |
| 194I | Rent — plant, machinery, equipment | 2% | ₹6,00,000 per year |
| 194A | Interest other than on securities | 10% | ₹10,000 (₹50,000 from banks; ₹1,00,000 for senior citizens from banks) |
| 194H | Commission or brokerage | 2% | ₹20,000 per year |
| 194Q | Purchase of goods (buyer turnover > ₹10 crore) | 0.1% on the amount above ₹50 lakh | ₹50 lakh per seller per year |
Without a valid PAN the rate rises to 20% (Section 206AA). Individuals and HUFs must deduct under 194C/194J/194H only if their business turnover exceeded ₹1 crore (₹50 lakh for professionals) in the previous year; individuals paying rent above ₹50,000 a month use 194-IB at 2% instead. The complete list with the changes brought by the Income Tax Act 2025 is in TDS rates and thresholds for FY 2026-27.
How to use the calculator
- Choose the section and, where relevant, the type (professional vs technical, building vs machinery).
- Enter the payment and any earlier payments to the same payee this year — the threshold is tested on the aggregate.
- For 194C, tick whether the payee is an individual or HUF (1% instead of 2%).
- Untick "PAN furnished" if you do not have a valid PAN on file, to see the 20% figure.
- Read the TDS amount and the net payable; deposit the TDS by the 7th of the next month (30 April for March deductions).
Deposit, return and certificate deadlines
- Deposit: 7th of the following month via challan ITNS 281 (March: 30 April).
- Quarterly return: Form 26Q by 31 July, 31 October, 31 January and 31 May.
- Certificate: Form 16A within 15 days of the return due date.
- Interest: 1% per month for late deduction, 1.5% per month for late deposit; late-filing fee ₹200 per day under 234E.
Set reminders alongside GST dates using the GST filing calendar and the business days calculator.
Situations that trip people up
- GST on the invoice: deduct TDS on the amount excluding GST when the GST is shown separately (Circular 23/2017).
- Reimbursements: no TDS on pure reimbursements billed separately with supporting bills; TDS applies if they are lumped into the fee.
- 194C vs 194J: a printer supplying printed material on your specification is a contractor (194C); a designer creating the artwork is a professional (194J).
- Rent to more than one co-owner: the ₹6 lakh threshold applies per owner.
- Lower-deduction certificate: honour Form 13 certificates at the stated rate; verify them on TRACES.
- Section 194Q and 206C(1H): when both could apply, the buyer's 194Q prevails and the seller does not collect TCS.
Related tools
- Purchase order — state TDS treatment in payment terms.
- GST invoice — invoices that show GST separately so TDS is computed on the right base.
- Rent receipt — for 194-IB rent by individuals.
Buying property from an NRI no longer needs a TAN — the PAN-based Form 141 route started on 1 October 2026: TDS on property purchase from an NRI.
- Advance tax calculator — the payee's side: TDS credit against advance tax.
- Income tax calculator — where TDS credits settle.