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TDS on Payments Calculator
Work out TDS on contractor, professional, rent, commission, goods and interest payments under the new section 393
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- Indian rules
What are you paying for?
Who are you paying?
· Resident payeePayee type
Contractors: 1% for an individual or HUF, 2% for others.Has the payee given a valid, operative PAN?
A PAN not linked with Aadhaar becomes inoperative and is treated like no PAN.Amounts and date
GST is shown separately on the invoice
Then TDS is worked out on the value before GST
Results
TDS to deduct
₹2,400
2% on ₹1,20,000
Deposit by the 7th of the next month; TDS for March is due by 30 April. Tax year .
How this was worked out
- GST of ₹14,400 is shown separately, so TDS is worked out on the value before GST.
- This payment: ₹80,000 (limit for one payment: ₹30,000).
- Total paid this tax year including this one: ₹1,20,000 (yearly limit: ₹1,00,000).
- The yearly total is above ₹1,00,000, so TDS applies to the entire amount paid this year.
- Includes ₹40,000 paid earlier this year on which TDS was not deducted.
- TDS = ₹1,20,000 × 2% = ₹2,400.
TDS rate chart for tax year 2026-27: old and new sections
Payments to residents. From 1 April 2026, quote the section 393 table entry, not the old 194 section, in challans and TDS returns.
| Payment | Old section | Income-tax Act, 2025 | Rate | TDS applies when |
|---|---|---|---|---|
| Payment to contractor or sub-contractor | 194C | 393(1) Table Sl. No. 6(i) | 1% / 2% | Above ₹30,000 a payment or ₹1,00,000 a year |
| Professional fees | 194J | 393(1) Table Sl. No. 6(iii) | 10% | Above ₹50,000 a year |
| Technical fees (not professional) | 194J | 393(1) Table Sl. No. 6(iii) | 2% | Above ₹50,000 a year |
| Director fees or commission (not salary) | 194J | 393(1) Table Sl. No. 6(iii) | 10% | No limit |
| Commission or brokerage | 194H | 393(1) Table Sl. No. 1(ii) | 2% | Above ₹20,000 a year |
| Rent of plant, machinery or equipment | 194-I | 393(1) Table Sl. No. 2(ii) | 2% | Above ₹50,000 a month |
| Rent of land, building, furniture or fittings | 194-I | 393(1) Table Sl. No. 2(ii) | 10% | Above ₹50,000 a month |
| Rent paid by a small individual or HUF | 194-IB | 393(1) Table Sl. No. 2(i) | 2% | Above ₹50,000 a month |
| Contract, professional fees or commission paid by a small individual or HUF | 194M | 393(1) Table Sl. No. 6(ii) | 2% | Above ₹50 lakh a year |
| Purchase of goods (buyer turnover above ₹10 crore) | 194Q | 393(1) Table Sl. No. 8(ii) | 0.1% | On the part above ₹50 lakh a year |
| Interest other than on securities (non-bank payer) | 194A | 393(1) Table Sl. No. 5(iii) | 10% | Above ₹10,000 a year |
| Higher TDS when no valid PAN | 206AA | 397(2) | 20% (5% for goods) | Any amount |
Good to know
- TDS is deducted at the time of credit in your books or payment, whichever is earlier. Once a yearly limit is crossed, TDS applies to the entire amount, including earlier payments.
- Contractor TDS (6(i)) and professional or technical fees (6(iii)) are not deducted by an individual or HUF paying only for personal purposes.
- A contractor in the business of plying, hiring or leasing goods carriages who owns ten or fewer goods carriages and gives a declaration with PAN is paid without TDS.
- For a payee whose only business is running a call centre, TDS on professional or technical fees is 2%.
- TDS on purchase of goods does not apply where tax is deducted or collected on the same transaction under any other provision.
- No surcharge or cess is added to TDS on payments to residents.
- Interest paid to banks, insurers and certain other bodies, and interest paid by a firm to its partner, is outside this TDS row.
Estimate for payments to residents from 1 April 2026 under the Income-tax Act, 2025 and the Finance Act, 2026. Government deductors, lower-deduction certificates, non-resident payees and special cases are not covered. The GST exclusion follows CBDT Circular 23/2017, which continues under section 536(2)(j) of the 2025 Act so far as it is consistent with it; no 2025 Act circular on this point has been issued yet, so confirm with your CA.
How it works
What this tool does.
Find out whether TDS applies to a business payment, the rate, the TDS amount, what to pay the payee and when to deposit the tax, under section 393 of the Income-tax Act, 2025, with the old 194C, 194J, 194H, 194-I, 194Q and 194A sections shown alongside.
Choose the type of payment, who is paying and who is being paid, and whether the payee has a valid, operative PAN. Enter this invoice or payment, any GST on it, and what you have already paid the same payee this tax year. The calculator picks the matching row of the section 393(1) Table, checks the single-payment and yearly limits, applies the rate (or the higher no-PAN rate under section 397(2)), leaves out GST when it is shown separately on the invoice, and gives the deposit due date under rule 218 of the Income-tax Rules, 2026. Every step of the working is shown. It covers payments to residents made or credited from 1 April 2026.
Rules and dates last reviewed: October 2026
Official sources
- Income-tax Act, 2025: section 393 (Tax to be deducted at source)
- Income-tax Act, 2025: section 402 (Interpretation: specified person, designated person, buyer)
- Income-tax Act, 2025: section 397 (PAN and higher rate)
- Income-tax Act, 2025: section 536 (Repeal and savings)
- Finance Act, 2026 (First Schedule, Part II: rates in force)
- Income-tax Rules, 2026: rule 218 (time of payment of TDS)
- Income-tax Rules, 2026: rule 162 (inoperative PAN)
- CBDT FAQs on the transition to the Income-tax Act, 2025
- CBDT Circular 23/2017 (TDS on amount excluding GST), copy of the signed circular
- Income Tax Department: TDS on purchase of goods (GST and advance payments)
TDS on Payments Calculator formula
TDS = amount liable to TDS × rate. The amount liable to TDS is the value before GST when GST is shown separately, otherwise the whole amount. Once a yearly limit is crossed, TDS applies to the entire amount paid in the year, including earlier payments on which no TDS was deducted. For purchase of goods, TDS applies only to the part above ₹50 lakh a year. Without a valid PAN the rate is the higher of the normal rate and 20% (5% for purchase of goods). Deposit by the 7th of the next month, or by 30 April for March.
Worked example
A private limited company in Pune books a ₹80,000 invoice from a contractor firm on 12 August 2026, plus GST of ₹14,400 shown separately. It has already paid the same firm ₹40,000 this tax year in two bills of ₹20,000, with no TDS. The firm has a valid PAN.
- Row: section 393(1), Table Sl. No. 6(i), payment to contractor (old section 194C). The payee is a firm, so the rate is 2%.
- GST is shown separately, so TDS is worked out on ₹80,000, not ₹94,400.
- This payment of ₹80,000 is above the ₹30,000 single-payment limit.
- Total for the year: ₹40,000 + ₹80,000 = ₹1,20,000, which is above the ₹1,00,000 yearly limit, so TDS applies to the entire ₹1,20,000.
- TDS = ₹1,20,000 × 2% = ₹2,400.
- Pay the contractor ₹94,400 − ₹2,400 = ₹92,000.
Deduct ₹2,400 and deposit it by 7 September 2026, quoting section 393(1) [Table: Sl. No. 6(i)], not 194C.
Sleet Accounting
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Sleet Accounting keeps vendor bills, payments and dues in one place, so TDS is worked out on the right amount.
- GST on every lineSleet Accounting works out CGST, SGST or IGST from each item’s HSN rate as you bill.
- Documents that convertA quotation becomes the sales order, the challan and the invoice, without retyping.
- Dues you can seeReceivables and payables by age, settled against invoices with part payments and credit notes.
Questions
TDS on Payments Calculator, answered.
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What replaced sections 194C, 194J, 194H, 194-I, 194Q and 194A from 1 April 2026?
Section 393 of the Income-tax Act, 2025. Payments to residents are rows of the section 393(1) Table: contractors Sl. No. 6(i) (old 194C), professional and technical fees Sl. No. 6(iii) (194J), commission or brokerage Sl. No. 1(ii) (194H), rent Sl. No. 2(ii) (194-I), purchase of goods Sl. No. 8(ii) (194Q) and interest other than on securities Sl. No. 5(iii) (194A). The CBDT says rates and thresholds were kept the same as under the 1961 Act.
What are the TDS rates for tax year 2026-27?
Contractors 1% (individual or HUF payee) or 2% (others); professional fees 10%; technical fees 2%; commission or brokerage 2%; rent of plant or machinery 2%; rent of land, building, furniture or fittings 10%; purchase of goods 0.1%; interest other than on securities 10%. These come from the section 393(1) Table and, for interest, Part II of the First Schedule to the Finance Act, 2026.
Is TDS on rent calculated monthly?
Yes. Under section 393(1) [Table: Sl. No. 2(ii)], TDS on rent applies when rent is above ₹50,000 for a month or part of a month: 2% for plant, machinery or equipment and 10% for land, building, furniture or fittings. An individual or HUF below the turnover limits deducts 2% under Sl. No. 2(i) once a year, from the rent for March or the last month of the tenancy.
Is TDS deducted on the GST part of an invoice?
Not when GST is shown separately. CBDT Circular 23/2017 says TDS is deducted on the amount without the GST component in that case. Section 536(2)(j) of the Income-tax Act, 2025 keeps circulars issued under the old Act in force so far as they are consistent with the new Act; no new circular on this point has been issued, so confirm with your CA. For purchase of goods, GST is left out only when TDS is deducted on booking the invoice, not on an advance.
What is the TDS rate if the payee has no PAN or an inoperative PAN?
Under section 397(2) of the Income-tax Act, 2025, the higher of the normal rate, the rate in force, or 20% (5% for purchase of goods). Rule 162 of the Income-tax Rules, 2026 applies the same higher rate when a PAN is inoperative because Aadhaar was not linked.
When must TDS on business payments be deposited?
By the 7th of the month after the month of deduction, and by 30 April for tax deducted in March, under rule 218(2) of the Income-tax Rules, 2026 (for deductors other than government offices). TDS by an individual or HUF under Sl. No. 2(i) or 6(ii) is due within 30 days from the end of the month, with Form No. 141.
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