Advanced Tax Deducted at Source calculation for salary, interest, rent, contract & professional fees with real-time compliance tracking for FY 2025-26
Amount to be deducted at source from the payment
Amount payable to recipient after TDS deduction
TDS must be deposited to government by 7th of following month. Certificate (Form 16A) must be issued to deductee within specified timelines.
Due Date: 7th of next month
| Payment Type | Section | TDS Rate (with PAN) | TDS Rate (without PAN) | Threshold Limit |
|---|---|---|---|---|
| Salary | 192 | Applicable Income Tax Slab | 30% + Surcharge + Cess | Basic Exemption Limit |
| Interest Other Than Securities | 194A | 10% | 20% | ₹40,000 (₹50,000 for seniors) |
| Rent - Building/Land | 194I | 10% | 20% | ₹2,40,000 annually |
| Rent - Plant/Machinery | 194I | 2% | 20% | ₹2,40,000 annually |
| Professional/Technical Fees | 194J | 10% | 20% | ₹30,000 per transaction |
| Contract Payments | 194C | 1% (Individual/HUF) 2% (Others) |
20% | ₹30,000 (single) ₹1,00,000 (annual) |
| Commission/Brokerage | 194H | 5% | 20% | ₹15,000 |
Note: Education Cess of 4% applies on TDS amount. Higher rates apply for non-furnishing of PAN. Threshold limits are for the financial year (April-March).
TDS Amount = (Taxable Payment Amount) × (Applicable TDS Rate)
Monthly TDS = Estimated Annual Tax Liability / 12
Where: Estimated Annual Tax Liability = Taxable Income × Applicable Slab Rate - Rebates
Total TDS = Base TDS + (Base TDS × 4%)
Scenario: Monthly salary ₹1,25,000 with HRA, standard deduction, and 80C investments
Calculation:
Scenario: Monthly commercial rent ₹45,000, PAN provided
Calculation:
Annual TDS: ₹56,160 (if rent continues all year)
Scenario: Consultant fees ₹85,000 for project, PAN available
Calculation:
Net Payment: ₹76,160 to consultant
TDS on salary requires estimating the employee's total annual tax liability based on projected income, exemptions, and deductions, then deducting proportionally each month using the formula: Average Income Tax Rate = Total Estimated Annual Tax / Projected Annual Income. This differs from fixed percentage deductions for other payments like rent (10%) or professional fees (10%).
Excess TDS can be claimed as a refund when filing your Income Tax Return (ITR). The Income Tax Department will process the refund directly to your bank account. To prevent excessive deduction:
Yes, TDS rates vary significantly based on payment nature:
Rates are higher (typically 20%) if PAN is not provided.
You can check TDS status through multiple official channels:
Regular monitoring helps identify discrepancies early for timely correction.
Late TDS compliance attracts significant penalties:
Penalties under Section 271H may be waived if TDS is paid, late fees/interest settled, and return filed within one year from due date.
Yes, you can apply for a lower or NIL TDS deduction certificate under Section 197 if:
Process: Submit Form 13 to your jurisdictional Assessing Officer with income proof and tax computation. Once approved, provide the certificate to the deductor for reduced/NIL TDS deduction.
Senior citizens (60+ years) enjoy specific benefits in TDS calculation:
Banks automatically apply higher thresholds for senior citizens based on date of birth in records.