📋 TDS Calculator

TDS Calculator India FY 2025-26 - Complete Guide to Tax Deducted at Source

TDS is one of the most misunderstood parts of Indian taxation - and one of the most consequential. Getting TDS wrong as a deductor means interest charges, penalties and late fees. Getting it wrong as a deductee means either over-paying tax unnecessarily or missing credits that reduce your final ITR liability. This calculator covers every major TDS section, applies the correct FY 2025-26 threshold and rate, and shows you exactly how much tax to deduct before making any covered payment.

How TDS Works - The Basic Mechanism

TDS is a pay-as-you-earn tax collection system. Instead of the recipient paying tax on income at year-end, the payer deducts a specified percentage before making payment and deposits it directly with the government. This achieves two things: the government receives tax revenue throughout the year rather than waiting for ITR season, and tax evasion on income is significantly reduced since it is collected at the point of payment.

• Deductor: The person or entity making the payment. Must have a TAN (Tax Deduction Account Number). Responsible for deducting correct TDS and depositing with the government on time.
• Deductee: The person receiving the payment. Gets credit for TDS deducted against their final income tax liability when filing ITR.
• TAN (Tax Deduction Account Number): 10-digit alphanumeric number mandatory for all deductors. Exception: individuals buying property (194IA) or paying rent as individual/HUF (194IB) - they can deduct TDS without a TAN using Form 26QB or 26QC respectively.
• Form 26AS / AIS: All TDS credited to your PAN is reflected here. Always verify your 26AS before filing ITR - if TDS has been deducted but not deposited by the deductor, the credit will not appear and you must follow up with them.

Most Common TDS Sections - FY 2025-26 Quick Reference

No-PAN TDS Rates - Section 206AA

If the deductee does not furnish their PAN, Section 206AA mandates that TDS be deducted at the higher of the following three rates:

• The rate specified in the relevant section (e.g., 10% for 194A)
• The rate or rates in force (i.e., the standard rate)
• 20% flat

In practice, this almost always means 20% for most sections. For Section 194Q (purchase of goods at 0.1%), the no-PAN rate becomes 5% - a 50x increase. Always collect PAN from the deductee before making any payment to avoid this punitive rate. Deductors who fail to collect PAN and deduct only the standard rate remain liable for the difference.

TDS on Salary - How Section 192 Works

TDS on salary is unlike every other TDS section. There is no flat rate - instead the employer calculates the employee's estimated annual tax liability and deducts it proportionally over 12 months. Here is how it works in practice:

1. Employee declares tax regime: The employee informs the employer whether they want Old Tax Regime or New Tax Regime at the start of the year. If no declaration is made, the employer defaults to New Tax Regime from FY 2023-24 onward.
2. Investment declarations (Old Regime only): Employee submits Form 12BB declaring planned investments under 80C, 80D, HRA, LTA etc. The employer reduces taxable income accordingly to estimate TDS.
3. Estimated annual tax divided by 12: The total estimated tax is deducted equally over 12 months. If the employee's actual income or investments change, the employer recalculates and adjusts TDS in remaining months.
4. Investment proof submission: Typically in January-February, employers ask for actual investment proofs. If actual investments are less than declared, TDS for remaining months increases to compensate.
5. Form 16: The employer issues Form 16 after year-end summarising total salary, deductions, and TDS deducted - used directly to file ITR.

TDS Due Dates and Consequences of Late Deposit

TDS deducted must be deposited with the government on time. The standard due dates are:

• April to February: TDS deducted in any month must be deposited by the 7th of the following month. For example, TDS deducted in June must be deposited by 7th July.
• March: TDS deducted in March has an extended deadline - deposit by 30th April of the same financial year.
• Property purchase (194IA/26QB): Deposit within 30 days from the end of the month in which TDS was deducted.
• Rent by individual/HUF (194IB/26QC): Deposit within 30 days from the end of the month of deduction (or end of tenancy).

Consequences of non-compliance: Late deduction attracts interest at 1% per month from the date tax was deductible to the date of actual deduction. Late deposit attracts 1.5% per month from the date of deduction to the date of deposit. Additionally, failure to file TDS returns on time attracts a fee of ₹200 per day under Section 234E - capped at the TDS amount. These are not penalties that can be waived easily; they accrue automatically and are visible to the Income Tax Department.

Form 15G and Form 15H - How to Avoid TDS Deduction Legally

When your income is genuinely below the taxable limit, you should not have TDS deducted at all. The mechanism to prevent this is a self-declaration submitted to each deductor:

• Form 15G (for residents below 60 years): Your estimated total income for the financial year must be below the basic exemption limit (₹2.5 lakh under Old Regime, ₹3 lakh under New Regime). Your estimated tax liability on total income must be nil. Submit at the start of the financial year to every bank or deductor separately.
• Form 15H (for senior citizens 60+): There is no income ceiling - only the condition that estimated tax liability on total income must be nil. Since senior citizens have higher exemption limits and additional deductions, many qualify even with meaningful investment income.
• Important: Submitting a false 15G/15H declaration to avoid TDS when your income is actually taxable is a punishable offence under Section 277 of the Income Tax Act. Do not file it if you genuinely owe tax.
• 15G/15H must be filed every financial year - they expire on 31st March each year. Set a reminder for April to submit fresh declarations to your banks.