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How much should actually be deducted?

TDS rates and thresholds vary by the nature of the payment — contractor fees, professional fees, rent, and commission are all treated differently. Pick the category and get the number.

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Before you calculate

TDS isn't one rate — it depends on what you're paying for

Tax Deducted at Source (TDS) applies to specific categories of payments — contractor fees, professional fees, rent, commission, and more — each governed by a different section of the Income Tax Act, with its own rate and threshold below which no deduction is required. Getting the wrong section wrong is one of the most common compliance mistakes businesses make.

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Estimate TDS on a payment

Select the nature of the payment — for help confirming which section applies to your specific case, book a consultation

Nature of payment

Payment amount (₹)

TDS to be deducted

₹ 7,500

Gross payment₹ 75,000

Rate applied10%

Net payment after TDS₹ 67,500

Threshold for this section: ₹50,000 (per payee, per financial year)

Illustrative estimate based on standard thresholds for FY 2025-26 — actual applicability can depend on aggregate payments across the year, payee category, and specific exemptions. Book a consultation to confirm before you deduct.

In plain language

Why the section you pick actually matters

The nature of the payment decides the section

A contractor invoice, a professional fee, and rent are all deducted differently — the label on the invoice matters less than what was actually provided.

Thresholds mean small payments are often exempt

Below the threshold for that section, no TDS applies at all — until either a single payment or the yearly aggregate crosses it.

Getting it wrong has real consequences

Under-deducting TDS can mean disallowed expenses and penalty interest — it's worth confirming the right section before you pay.

Questions

Frequently asked

01What if a payment is just below the threshold?

No TDS is required on that specific payment — but if your aggregate payments to the same payee cross the annual threshold later in the year, TDS becomes applicable retroactively on the full amount for some sections.

02What's the difference between Section 194-I and 194-IB?

194-I applies broadly to rent payments by businesses and covers both land/building (10%) and plant/machinery (2%). 194-IB specifically applies to individuals and HUFs not subject to tax audit, paying rent above ₹50,000/month, at a flat 2%.

03Do TDS rates ever change during the year?

Rates and thresholds are occasionally revised through Union Budget announcements, sometimes with effect from a date mid-year rather than 1 April — worth checking before assuming a rate is still current.

04What if I deduct TDS but forget to deposit it on time?

Late deposit attracts interest, and persistent non-compliance can trigger penalties and disallowance of the expense in your own tax computation.

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Business Income Tax

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Business Support

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Learn more

Vol. 01194C vs 194J: Contractor or Professional Fee?The distinction that determines which TDS section — and rate — actually applies.Guide01 / 03 Vol. 02TDS on Rent: 194-I vs 194-IB ExplainedTwo similarly-named sections with very different rates — here's the difference.Guide02 / 03 Vol. 03What Happens If You Deduct TDS at the Wrong RateThe penalties and disallowances that follow, and how to correct a mistake.Guide03 / 03

Selected · Vol. 02

TDS on Rent: 194-I vs 194-IB Explained — Two similarly-named sections with very different rates — here's the difference.

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How much should actually be deducted?

TDS isn't one rate — it depends on what you're paying for

Estimate TDS on a payment

Why the section you pick actually matters

The nature of the payment decides the section

Thresholds mean small payments are often exempt

Getting it wrong has real consequences

Frequently asked

Where to go next

Accounting & Compliance

Business Income Tax

Business Support

Related articles

Let's figure out exactly what your situation needs.

Thank you — we've received your details.

How much should actually be deducted?

TDS isn't one rate — it depends on what you're paying for

Estimate TDS on a payment

Why the section you pick actually matters

The nature of the payment decides the section

Thresholds mean small payments are often exempt

Getting it wrong has real consequences

Frequently asked

Where to go next

Accounting & Compliance

Business Income Tax

Business Support

Related articles

Let's figure out exactly what your situation needs.

Thank you — we've received your details.