TDS Calculator

Two questions come up every month in any office that pays outsiders. The first is “this invoice is for ₹1 lakh, how much do I deduct and how much do I transfer”. The second is the awkward one: “the vendor wants ₹1 lakh in hand, what do I book as the expense”. This page answers both, and the second is not what most people assume.

Deducting from an invoice, or grossing up what the vendor wants

Four inputs.

• Amount. Either the invoice value or the sum the payee must receive, depending on the next choice.
• Nature of payment. The section under which you are deducting: contractor, professional fee, rent, commission and the rest. The dropdown carries the FY 2025-26 rate.
• This amount is. The gross invoice (deduct from it) or the in-hand figure the payee wants (gross it up).
• Payee has a PAN. If they have not given you one, section 206AA forces a 20% rate on most payments, whatever the section says.

With the defaults, a ₹1,00,000 professional fee under section 194J at 10%:

TDS to deduct	₹10,000.00
Net paid to payee	₹90,000.00
Gross amount	₹1,00,000.00
Rate applied	10.0%

Now switch to gross-up. The consultant says ₹1 lakh must land in her account. The instinct is to add 10% and book ₹1,10,000. That is wrong, because 10% of ₹1,10,000 is ₹11,000, and ₹1,10,000 minus ₹11,000 is ₹99,000. She is short by ₹1,000 and you will hear about it.

The right way is a division:

gross = net / (1 - rate)
      = 1,00,000 / 0.90
      = 1,11,111.11
TDS   = 1,11,111.11 - 1,00,000 = 11,111.11

TDS to deduct	₹11,111.11
Net paid to payee	₹1,00,000.00
Gross amount	₹1,11,111.11

At 2% (a contractor company under 194C, or technical services under 194J) the gross on the same ₹1 lakh is ₹1,02,040.82, not ₹1,02,000. Small gaps, but they are the reason a TDS ledger never reconciles at year end when someone has been adding the rate instead of dividing.

If the payee has no PAN, the 10% becomes 20%. The straight deduction on ₹1 lakh is then ₹20,000 and the gross-up jumps to ₹1,25,000. Twenty percent is a lot of money to lose to a missing PAN, which is why vendors who refuse to share one usually change their mind once you show them this number.

One more thing about the amount box. If the invoice shows GST separately, deduct TDS on the value before GST. CBDT said so in 2017 and it still trips up new accountants who deduct on the grand total.

Rates and thresholds for FY 2025-26

These are the rates in the dropdown. I checked them against the position after the Finance Act 2025 and the October 2024 cuts. Rates and thresholds move in almost every Budget, and Budget 2026 may have changed some of these for FY 2026-27, so confirm on the Income Tax Department site before relying on a figure for a payment made after 31 March 2026.

Section	Payment	Rate	Threshold (per payee, per year)
194C	Contractor, individual or HUF	1%	₹30,000 a bill or ₹1,00,000 in the year
194C	Contractor, company or firm	2%	same
194J	Professional fees	10%	₹50,000
194J	Technical services	2%	₹50,000
194I	Rent of land or building	10%	₹6,00,000
194I	Rent of plant or machinery	2%	₹6,00,000
194IB	Rent paid by an individual	2%	above ₹50,000 a month
194H	Commission or brokerage	2%	₹20,000
194A	Interest from a bank	10%	₹50,000 (₹1,00,000 for senior citizens)
194A	Interest from anyone else	10%	₹10,000
194D	Insurance commission	2%
194K	Mutual fund income	10%	₹10,000
194IA	Property purchase	1%	above ₹50,00,000
194Q	Purchase of goods	0.1%	above ₹50,00,000
194O	E-commerce operator	0.1%
194S	Crypto and virtual digital assets	1%

The calculator does not apply thresholds, on purpose. They run per payee across the whole financial year, and the tool has no idea whether the ₹25,000 you are paying a plumber today is his first bill from you or his fifth. You have to keep that running total yourself. Under 194C the trap is the aggregate limit: five bills of ₹25,000 each stay under the ₹30,000 single-bill line but cross ₹1,00,000 for the year, and TDS then applies to all of it.

No PAN means 20% under section 206AA, except 194Q and 194O where it is 5%. A payee who is below the taxable limit can hand you Form 15G (15H for senior citizens) for interest, and anyone can apply for a lower or nil deduction certificate under section 197, which arrives as Form 13. Without that paper in your file, deduct the full rate.

Two sections work differently for individuals. If you are a tenant paying more than ₹50,000 a month, 194IB applies to you even without a TAN: deduct 2% once, in the last month of the year or of the tenancy, and file Form 26QC. Buying a flat above ₹50 lakh, you deduct 1% under 194IA and file Form 26QB, again without a TAN. Every other section in the table needs a TAN.

After you deduct: the 7th, Form 26Q and what the payee sees

Deducting is the easy half. The money you held back belongs to the government and has to reach it by the 7th of the following month. TDS deducted in March gets until 30 April. Miss it and interest runs at 1.5% per month or part of a month from the date of deduction to the date of deposit, so a deposit that is one day late costs a full month. Not deducting at all when you should have costs 1% a month from the date it was due, and until the TDS is deposited the Income Tax Department can disallow 30% of the expense under section 40(a)(ia).

Then the return. Non-salary deductions go in Form 26Q every quarter (the salary equivalent is 24Q, which this page does not deal with). Quarterly due dates are 31 July, 31 October, 31 January and 31 May. Late filing is ₹200 a day under section 234E, capped at the TDS amount.

Once the return is processed you download Form 16A from TRACES and give it to the payee within fifteen days of the return due date. That certificate is how the consultant proves the ₹10,000 was deducted on her behalf.

From the payee’s side, the deduction shows up in Form 26AS and in the AIS on the income tax portal, usually a few weeks after the deductor files. If it is not there by the time she is filing her return in July, the deductor has either not deposited it or has quoted the wrong PAN, and she should chase before filing rather than claim a credit the portal cannot see. When TDS exceeds her actual liability, the excess comes back as a refund, which is the whole point of matching PANs properly.

What this does not model, and the sister calculators

Thresholds, as above. Surcharge and cess on payments to non-residents under section 195, which have their own rates and treaty questions. Salary TDS under section 192, which depends on the employee’s regime and declarations; the income tax calculator shows the monthly TDS a salary should attract. And TDS on a fixed deposit, which the bank does under 194A on your behalf; the FD calculator will show what the interest was before they took 10% off it.

For working out how much of a GST-inclusive bill is actually taxable value before you apply a rate, use the GST calculator first. The division trick is the same one, just on the other side of the invoice.