What is TDS?
TDS (Tax Deducted at Source) is a mechanism where the payer deducts tax before making a payment and deposits it directly with the government. It applies to salary, interest on FDs, rent, professional fees, contractor payments, and more.
Common TDS rates in India: - Salary: As per income tax slab - FD Interest: 10% (if interest > ₹40,000/year) - Rent: 10% (if rent > ₹50,000/month) - Professional fees: 10% (if payment > ₹30,000) - Contractor: 1-2% (if payment > ₹30,000)
Formula
TDS Amount = Payment Amount × TDS Rate / 100 Net Amount = Payment Amount − TDS Amount
If PAN is not provided, TDS is deducted at 20% (higher rate).
For ₹5,00,000 at 10% TDS: - TDS = ₹50,000 - Net payment = ₹4,50,000
How to use this TDS Calculator?
1. Enter the total payment amount. 2. Select the applicable TDS rate (10% is most common). 3. See the TDS amount and net payment after deduction.
Common TDS rates: 10% for FD interest, rent, professional fees. 1% for property purchase above ₹50 Lakhs. 2% for contractor payments.