TDS Calculator

TDS — Pay As You Earn, Not Just at Year End

Tax Deducted at Source (TDS) is India's mechanism for collecting income tax in real-time rather than waiting for annual filing. The payer (your employer, bank, tenant or client) deducts a percentage of your payment and deposits it directly with the government. You receive the net amount. At year-end, all TDS deducted on your behalf appears in your Form 26AS / AIS — you claim credit for it when filing your ITR. If TDS exceeded your actual tax liability, you get a refund. Simple formula: TDS = Gross Payment × Applicable Rate / 100.

TDS Rates by Payment Type — Quick Reference

• Salary (Section 192): Deducted at applicable income tax slab rate. Employer calculates projected annual income and divides tax by 12 months.
• FD Interest (Section 194A): 10% when annual interest from one bank exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G/15H to avoid this.
• Rent (Section 194I): 10% on land/building when monthly rent exceeds ₹20,000. Tenants paying commercial rent must deduct TDS.
• Professional Fees (Section 194J): 10% on payments to doctors, lawyers, engineers, consultants above ₹30,000/year.
• Commission (Section 194H): 5% on commission or brokerage above ₹15,000/year.
• Winnings (Section 194B): 30% flat on lottery, game shows, horse races above ₹10,000 per transaction.

How to Avoid TDS on FD Interest

If your total income is below the basic exemption limit (₹2.5 lakh for individuals under 60, ₹3 lakh for senior citizens), you can submit Form 15G (for those below 60) or Form 15H (for senior citizens) to your bank at the start of each financial year. This self-declaration prevents the bank from deducting TDS on your FD interest. Important: the 15G/15H is only valid for that financial year — resubmit every April. If you have multiple bank relationships, submit to each separately.

TDS for Freelancers and Self-Employed Professionals

If you are a freelancer, consultant or self-employed professional, your clients will deduct 10% TDS (Section 194J) on payments above ₹30,000/year. This is not your final tax — it is an advance. Your actual tax liability depends on your net income after business expenses. If your expenses are significant, your actual tax may be lower than TDS deducted, resulting in a refund. Always maintain invoices and expense records. File ITR even if TDS covers your liability — it is mandatory for income above the basic exemption. Use our Income Tax Calculator to compute your actual tax liability.

TDS vs TCS — What is the Difference?

TDS (Tax Deducted at Source) is collected by the payer — your employer, bank or client deducts tax before paying you. TCS (Tax Collected at Source) is collected by the seller — a business collecting tax at the point of sale (cars above ₹10 lakh, foreign remittances above ₹7 lakh, e-commerce sellers). Both appear in your Form 26AS and are credited against your total tax liability at filing time. Also see our GST Calculator for indirect tax calculations.

✓Verified by ToollyX Team · Last updated June 2026