TDS on Payments Checker: Find the Right Section, Rate and Threshold
Deducting TDS on payments is where most SME finance teams slip. Pick the nature of payment and this free TDS calculator returns the applicable section, the rate with PAN, the TDS threshold for FY 2025-26 and the exact amount to deduct. It covers TDS on professional fees, TDS on rent, TDS on contractor payments and more.
No sign-up. No email required. Result is shown instantly in your browser.
Without PAN, Section 206AA forces deduction at the higher of the normal rate or 20%.
Key takeaways
- Every payment head has its own section: section 194J for professional fees, section 194C for contractors, section 194I for rent and section 194H for commission or brokerage.
- Once the TDS threshold FY 2025-26 is crossed, deduct on the full amount paid in the year, not only on the excess over the threshold.
- No PAN means 20% under Section 206AA, whatever the normal rate would have been.
- Payments to non-residents are governed by Section 195 and DTAA, not by the domestic TDS rate chart.
TDS rate chart FY 2025-26 (common payments)
| Payment | Section | Rate (with PAN) | Threshold |
|---|---|---|---|
| Professional fees | 194J | 10% | Rs 50,000 per year |
| Technical services / royalty (certain) | 194J | 2% | Rs 50,000 per year |
| Contractor / sub-contractor (Individual or HUF) | 194C | 1% | Rs 30,000 single or Rs 1,00,000 aggregate |
| Contractor / sub-contractor (Company, Firm, Other) | 194C | 2% | Rs 30,000 single or Rs 1,00,000 aggregate |
| Rent of land, building or furniture | 194I | 10% | Rs 50,000 per month |
| Rent of plant & machinery | 194I | 2% | Rs 50,000 per month |
| Commission or brokerage | 194H | 2% | Rs 20,000 per year |
| Interest other than securities, non-bank payer | 194A | 10% | Rs 5,000 per year |
| Purchase of goods | 194Q | 0.1% | Rs 50,00,000 per year |
| Dividend | 194 | 10% | Rs 10,000 per year |
| Partner remuneration / interest by a firm | 194T | 10% | Rs 20,000 per year |
Rates are before surcharge and health and education cess. Section 194Q applies only where the buyer's turnover exceeded Rs 10 crore in the previous year.
What changed in Budget 2025
- Section 194J threshold raised to Rs 50,000 per year for professional and technical fees.
- Section 194H threshold for commission or brokerage raised to Rs 20,000 per year.
- Section 194I rent threshold moved to Rs 50,000 per month.
- New Section 194T on partner remuneration, commission, bonus and interest from 1 April 2025 at 10% beyond Rs 20,000.
- Section 194A bank and post office interest thresholds raised. This tool covers non-bank interest payers.
No PAN? Section 206AA
If the payee does not furnish a valid PAN, Section 206AA requires deduction at the higher of the rate in force or 20%. In practice, a 10% professional fee deduction becomes 20% and a 1% contractor deduction becomes 20%. Short deduction leads to interest under Section 201, disallowance of the expense, and a demand on the deductor rather than on the payee. Collect and validate PAN before releasing the first payment.
Non-residents: Section 195
Section 195 covers any sum chargeable to tax paid to a non-resident. There is no single rate: the outcome depends on the nature of income, whether a permanent establishment exists, and the relief available under the applicable DTAA. Most remittances also need Form 15CA and a Form 15CB certificate, supported by a Tax Residency Certificate and Form 10F. Get it reviewed before the bank remits.
Frequently Asked Questions
Automate TDS on every payment
The Virtual CFO + Finance Automation Payment Hub applies the correct TDS section and rate at source, so nothing is deducted late or short.