What is TDS?
TDS, or Tax Deducted at Source, is income tax that is cut from a payment before it reaches you. The payer deducts a set percentage, deposits it with the government in your name, and pays you the rest.
TDS applies to many kinds of payments, such as interest, rent, professional fees, commission, contractor payments and early EPF withdrawals. Each has its own rate and a threshold below which no tax is deducted.
TDS is not an extra tax. It is an advance payment of your income tax, and it shows up in your Form 26AS. You can claim it against your total tax when you file your return, and get a refund if too much was deducted.
Good to know
From 1 April 2026, the Income-tax Act, 2025 lists all TDS provisions under a single section, 393, with the same rates and thresholds as before. This calculator still uses the familiar section numbers, such as 192A and 194J.
What is a TDS Calculator?
A TDS calculator works out how much tax should be deducted from a payment, based on who receives it, whether they have given their PAN, the nature of the payment and the amount.
The result is the TDS on a single payment. For payments where the threshold is a yearly total, enter the total paid during the financial year.
Why you should use a TDS Calculator?
- Know what you will receive: See how much of a payment will be deducted as tax before it reaches you.
- Deduct the right amount: If you are making a payment, check the rate and threshold so you deduct neither too much nor too little.
- See the cost of not sharing PAN: Compare the TDS with and without PAN to see how much higher it is when PAN is missing.
How Does a TDS Calculator Work?
The TDS calculator works on the following inputs:
- Recipient: Whether the payment is to an individual, HUF or sole proprietor, or to others such as a firm or company. Some rates, like those for contractors, depend on this.
- PAN of recipient: Whether the recipient has given their PAN to the payer.
- Nature of payment: The kind of payment, which decides the rate and the threshold.
- Amount of Payment: The amount being paid.
The calculator relies on the following formula:
TDS = Amount of Payment × TDS Rate ÷ 100
- Amount of Payment
- The payment, if it is above the threshold for that kind of payment
- TDS Rate
- The rate for that kind of payment and recipient
If the payment is at or below the threshold, no TDS is deducted. If the recipient has not given their PAN, TDS is usually deducted at the higher of twice the normal rate or 20%.
Formula to Calculate TDS with an Example
Consider an example for a better understanding.
- Recipient: Individual
- Nature of payment: 192A - Premature withdrawal from EPF
- Amount of Payment: ₹90,000
The amount is above the ₹50,000 threshold, so TDS applies at 10%.
TDS = 90,000 × 10 ÷ 100
After calculation, the TDS is ₹9,000, and you receive ₹81,000. Without PAN, TDS would be 20%, or ₹18,000.
Things to keep in mind
- Share your PAN: Without PAN, TDS is usually deducted at 20% or more, so always give your PAN to the payer.
- Form 15G and 15H: If your total income is below the taxable limit, you can submit Form 15G (or 15H if you are a senior citizen) to stop TDS on interest and some other payments.
- Check Form 26AS: Make sure every TDS deducted from your payments appears in Form 26AS before you file your return.
- Rates can change: TDS rates and thresholds are revised in the Union Budget. This calculator uses the rates in force for the 2026-27 financial year.