TDS Calculator FY 2026-27 — Rates, Limits & Amount

Quick answer

TDS (tax deducted at source) is the tax a payer must cut from certain payments, such as contractor bills, professional fees, rent, commission and interest, before paying the balance. The amount is the payment multiplied by the TDS rate for that type of payment, but only once the yearly, monthly or single-payment limit is crossed. Without a valid PAN, a higher rate, generally 20%, applies. The deducted tax is deposited by the 7th of the next month.

How to use this TDS calculator

The calculator needs five inputs. Each one matches a rule that decides whether TDS applies and at what rate.

1. Type of payment. Choose what you are paying for: contractor, professional fees, technical services, rent of building or of machinery, rent paid by an individual, commission, interest, dividend, property purchase, purchase of goods, e-commerce, payments to partners or lottery winnings. The old section number is shown next to each option.
2. This payment. Enter the amount of the bill or credit you are about to pay. For rent, enter the monthly rent.
3. Total paid to this person this year. Enter the total paid or credited to the same payee in the financial year so far, including this payment. This is how the calculator checks yearly limits. If you leave it lower than the payment, the calculator uses the payment itself.
4. Payee is. Choose individual or HUF, or company, firm and others. This matters mainly for contractor payments, where the rate is 1% or 2%.
5. Payee has given a valid PAN? Choose yes or no. Without PAN, the higher rate is applied.

The result shows either "No TDS needed yet" with the limit that applies, or the TDS to deduct, the rate used, the net amount to pay the payee and the rule behind it.

Who has to deduct TDS

TDS is the payer's responsibility, not the payee's. If TDS was due and not deducted, the payer can be treated as an "assessee in default" and pay interest, and in some cases lose the expense deduction in their own accounts. So it is worth knowing whether the rules apply to you.

• Companies, firms, LLPs, trusts, societies and government bodies must deduct TDS on the payments in the table below once the limits are crossed, whatever their turnover.
• Individuals and HUFs with a business or profession under tax audit in the previous year must deduct TDS on business payments in the same way.
• Other individuals and HUFs, including salaried people, deduct TDS only in specific cases: high rent (old 194-IB), property purchase of ₹50 lakh or more (old 194-IA), and large contract or professional payments of more than ₹50 lakh a year (old 194M).
• Buyers with turnover above ₹10 crore in the previous year deduct TDS on purchases of goods above ₹50 lakh from one seller.
• E-commerce operators deduct TDS on sales made by sellers through their platform.

If you are not sure which group you fall into, check last year's audit status and turnover first. That decides most of the answer.

How the calculator works out TDS

The basic formula is simple: TDS = amount × TDS rate, and net payment = amount − TDS. The real question is whether TDS applies at all, and that depends on the kind of limit attached to each payment.

The five kinds of limit

• Yearly limit: TDS applies once the total paid to the payee in the year crosses the limit. Professional fees, commission, interest, dividend and partner payments work this way.
• Monthly limit: for rent, TDS applies when rent for a month (or part of a month) is more than ₹50,000.
• Single-payment limit: lottery winnings above ₹10,000 in one payment, and property purchases of ₹50 lakh or more.
• Single or yearly limit: contractor payments attract TDS if one bill is more than ₹30,000 or the total for the year is more than ₹1,00,000.
• Only on the excess: TDS on purchase of goods applies only to the value above ₹50 lakh in the year, and only when the buyer's turnover in the previous year was above ₹10 crore.

Choosing the rate

With a valid PAN, the calculator uses the normal rate for the type of payment and, for contractors, the payee type. Without PAN, it uses the higher of the normal rate and the no-PAN rate, which is 20% for most payments and 5% for purchase of goods and e-commerce. The result is rounded to the nearest rupee.

TDS rates and limits used by the calculator

These are the rates and limits for payments made in FY 2025-26 and FY 2026-27 by resident payers to resident payees, as built into the tool.

No cess or surcharge is added to TDS on these payments to residents. The tool shows the familiar section numbers. From 1 April 2026 (tax year 2026-27 onwards), all these payments are covered by section 393 of the Income-tax Act, 2025, which renumbers them; the calculator follows the rates shown above.

Worked examples

Example 1: professional fees to a consultant

A company pays a chartered engineer ₹60,000 for a project report. It is the first payment to her this year. She is an individual and has given her PAN.

• Yearly total = ₹60,000, which is above the ₹50,000 limit, so TDS applies.
• TDS = ₹60,000 × 10% = ₹6,000.
• Net payment to the consultant = ₹60,000 − ₹6,000 = ₹54,000.

Example 2: contractor crossing the yearly limit

A business has paid a contracting firm ₹85,000 in three small bills this year, each below ₹30,000, so no TDS was deducted. A new bill of ₹25,000 comes in, taking the yearly total to ₹1,10,000.

• One bill is not above ₹30,000, but the yearly total crosses ₹1,00,000, so TDS applies.
• The payee is a firm, so the rate is 2%. TDS on this bill = ₹25,000 × 2% = ₹500, net payment ₹24,500.
• Once the yearly limit is crossed, TDS is also due on the earlier ₹85,000: ₹85,000 × 2% = ₹1,700. This catch-up amount is usually deducted from the current or next payment.

The calculator shows the TDS on the current payment. Work out the catch-up for earlier payments separately, as shown above.

Example 3: office rent, with and without PAN

A private limited company pays its landlord ₹60,000 a month as office rent.

• Monthly rent is above ₹50,000, so TDS applies at 10%: ₹6,000 a month. The landlord gets ₹54,000.
• If the landlord has not given a PAN, the rate becomes 20%: ₹12,000 a month, and the landlord gets ₹48,000.

The difference of ₹6,000 a month shows why collecting PAN before the first payment matters to both sides.

Example 4: purchase of goods above ₹50 lakh

A trader whose turnover last year was above ₹10 crore has bought goods worth ₹40 lakh from a supplier this year. A new bill of ₹20 lakh takes the yearly total to ₹60 lakh.

• TDS applies only to the value above ₹50 lakh. The part of this bill above the limit = ₹60 lakh − ₹50 lakh = ₹10 lakh.
• TDS = ₹10,00,000 × 0.1% = ₹1,000. Net payment = ₹20,00,000 − ₹1,000 = ₹19,99,000.
• Every later purchase from this supplier in the same year attracts 0.1% on its full value.

Example 5: buying a flat where stamp value is higher

A couple agrees to buy a flat for ₹72 lakh, but the stamp duty value fixed by the state is ₹80 lakh. They pay the seller equally from both their accounts.

• The property value is above ₹50 lakh, so TDS at 1% applies.
• TDS is worked out on the higher of price and stamp value: ₹80,00,000 × 1% = ₹80,000.
• Each buyer deducts ₹40,000 from their share of the payment and files a separate Form 26QB.

In the calculator, enter the higher stamp value as the payment amount for such cases, since the tool works on the figure you enter.

Example 6: below the limit

A startup pays a freelance designer ₹30,000, and the total paid to him this year is ₹45,000. The yearly limit for professional fees is ₹50,000, so no TDS is needed yet. If the next invoice takes the total above ₹50,000, TDS at 10% applies on the full yearly amount, not only on the part above ₹50,000, so the earlier ₹45,000 also needs to be covered.

Special cases you should know

Rent paid by salaried individuals (194-IB)

If you are an individual or HUF not covered by tax audit and pay rent above ₹50,000 a month, you must deduct TDS at 2%. Unlike business deductors, you deduct it once: from the rent for the last month of the financial year, or the last month of the tenancy if it ends earlier. The calculator shows the TDS on one month's rent. For a full year, multiply the yearly rent. For example, at ₹55,000 a month the calculator shows ₹1,100, and the actual deduction in March for twelve months is ₹6,60,000 × 2% = ₹13,200. You do not need a TAN; the payment is made with Form 26QC on the portal.

Buying a property of ₹50 lakh or more (194-IA)

The buyer deducts 1% of the consideration and pays it with Form 26QB, without needing a TAN. If the stamp duty value is higher than the price paid, TDS is worked out on the higher figure. Where there are several buyers or sellers, the ₹50 lakh limit is checked on the total value of the property, not each person's share. Each buyer files the form for their share of the payment to each seller.

Individuals and HUFs paying contractors or professionals

Individuals and HUFs generally need to deduct TDS on contractor payments, professional fees, commission and interest only if their business or profession was subject to tax audit in the previous year. A separate provision (old 194M) requires individuals not under audit to deduct 2% when payments to a contractor or professional exceed ₹50 lakh in a year. Household payments, such as to a home renovation contractor, are usually outside 194C for an individual not in business.

Bank interest: the limit is per bank

For interest on deposits, the ₹50,000 limit (₹1,00,000 for senior citizens) is applied to the total interest from one bank, across its branches, not to each deposit separately. So a person with several small FDs in the same bank can still face TDS once their combined interest crosses the limit. Interest from different banks is checked bank by bank.

Payments by a firm to its partners (194T)

From 1 April 2025, a partnership firm or LLP must deduct 10% TDS on salary, remuneration, commission, bonus and interest paid or credited to a partner, once the total for that partner crosses ₹20,000 in the year. Earlier these payments had no TDS. Firms should now track partner payments like any other payee and include them in quarterly returns.

E-commerce sales

An e-commerce operator deducts 0.1% on the gross amount of sales made by a seller through its platform. For individual and HUF sellers who have given PAN or Aadhaar, no TDS applies if their gross sales on the platform stay within ₹5 lakh in the year. The seller claims this TDS as credit in their own return.

GST shown on the invoice

When GST is shown separately on the invoice, TDS is usually deducted on the amount excluding GST. Enter the taxable value, not the invoice total, in the calculator in that case.

Lower or nil deduction

A payee can apply to the department for a lower or nil TDS certificate if their actual tax will be lower. If they give you such a certificate, deduct at the rate it states, within its limit and period. For interest and dividend, individuals with no taxable income can give Form 15G (below 60) or 15H (senior citizens), and the payer then does not deduct TDS, subject to conditions.

Payments to non-residents

This calculator covers payments to residents. Payments to non-residents follow different rules and rates, often affected by tax treaties, and generally need expert advice before payment.

After you deduct: TAN, deposit and returns

Deducting TDS is only the first step. A deductor must also deposit it, file a quarterly return and issue a certificate.

Get a TAN first

Every deductor needs a Tax Deduction Account Number (TAN), except for the property purchase, rent-by-individual and similar cases that use the one-time forms 26QB and 26QC. Apply before your first deduction, because the deposit and return both need it.

Deposit on time

TDS is paid online through the e-Pay Tax service on the income tax e-filing portal. Choose the right section and the payee category (company or non-company) while paying, because a wrong code creates a mismatch in your return.

Non-salary TDS on payments to residents is reported in Form 26Q. After filing the return, download Form 16A from TRACES and give it to each payee within 15 days of the return due date.

Correcting a TDS return

Mistakes in a filed TDS return, such as a wrong PAN, a wrong amount or a challan tagged to the wrong quarter, are fixed by filing a correction statement for that quarter. Once it is processed, the payee's Form 26AS updates. Do this as soon as a payee reports a missing credit, because it directly affects their return and refund.

What happens if TDS is not deducted at all

If you were required to deduct TDS and did not, you can be asked to pay the tax yourself with interest. For business deductors, a part of the expense can also be disallowed in your own income tax computation until the TDS is deducted and paid. Fixing a missed deduction early, with interest, costs far less than leaving it for a notice.

Deposited late? Interest at 1.5% per month runs from the date of deduction. Deducted late? Interest at 1% per month runs from the date it should have been deducted. Use our TDS interest and late fee calculator to work out the exact amount for your dates.

Common mistakes with TDS

• Checking only the single bill. Many payments have yearly limits. Track the running total for each payee, or you will miss the point where TDS starts.
• Forgetting the catch-up. When the yearly limit is crossed, TDS is due on earlier payments in the year too, not only on the bill that crossed it.
• Wrong section, wrong rate. Professional fees (10%) and technical services (2%) are both under the old 194J, and rent of buildings (10%) and machinery (2%) both under 194-I. Picking the wrong one leads to short deduction notices.
• Deducting on GST. When GST is shown separately, deduct on the value before GST.
• Not collecting PAN. A missing or wrong PAN means the higher rate, unhappy payees and errors in your TDS return.
• Deducting but not depositing. TDS deducted belongs to the government from that moment. Holding it attracts higher interest and can attract serious consequences.
• Using the wrong payee category in the challan. Company and non-company codes must match the payee, or the return will show mismatches.
• Not issuing Form 16A. Payees need it to check their credit. Download it from TRACES after each quarterly return and send it on time.
• Skipping the TDS return when TDS is deposited. Depositing alone is not enough. Without the quarterly return, payees do not get credit in their 26AS, and a late fee builds up daily.

Documents and details to keep ready

• Payee's name, PAN and address, and whether it is an individual, HUF, firm or company.
• Invoice or agreement showing the nature of the payment, the amount and GST separately.
• A running ledger of payments to each payee for the year, to check yearly limits.
• Any lower deduction certificate, Form 15G or 15H received from the payee.
• Your TAN and login details for the portal and TRACES.
• Challan details (BSR code, date, challan serial number) for every deposit, needed while filing the TDS return.

For the payee: how TDS connects to your return

If TDS is deducted from your payment, it is not a final tax. Your full income, not the net amount received, goes in your return, and the TDS is claimed as tax already paid. It shows in your Form 26AS once the deductor files their TDS return. Check it regularly; our AIS and 26AS guide explains what to look for.

If your actual tax is lower than the TDS, you get the difference as a refund after filing. If it is higher, for example because your slab rate is above the TDS rate, you pay the balance as advance or self-assessment tax. A freelancer with ₹6 lakh of fees and ₹60,000 TDS, for instance, may still owe more or get money back depending on total income, deductions and the regime chosen.

Make sure the payer has your correct PAN. TDS deducted against a wrong PAN does not reach your 26AS, and you cannot claim it until the payer corrects their return.

Professionals and contractors should also match the gross receipts in their books with the TDS entries in 26AS before filing. Every TDS line represents a payment someone has reported making to you, so your declared receipts should be at least that total. If a client deducted TDS on an advance that you have not yet billed, note the reason so it can be explained if asked.

When to take expert help

The calculator handles the common resident payments. Talk to an expert when:

• you are a new business and need a TAN, a deduction process and quarterly returns set up;
• a payment could fall under more than one section, such as a contract that mixes supply of goods and services;
• you missed deductions or deposits in earlier months and need to regularise them with interest;
• you received a TDS default or short deduction notice from TRACES;
• you are paying a non-resident, buying property from a non-resident, or making payments to partners for the first time;
• you are an individual paying high rent or buying a property and want the 26QC or 26QB filing done correctly.

Our income tax filing service covers TDS deductions, deposits and returns along with income tax returns.

Get it checked by an expert

Unsure which section applies or whether you have missed deductions this year? A TaxCaller expert can review your payments, confirm the right TDS rate and limit for each payee, work out any catch-up and interest, and file your TDS returns and forms on time. We tell you the fee upfront before starting, and the first call to discuss your situation is free. Keep a list of your payees and the payments made this year ready for the call.