Karan paid a freelance designer ₹40,000 last month. His CA flagged it — "You should have deducted TDS under 194J." Karan had no clue which sections applied to his payments.
This is the bookmark page for that. Every common section, rate, threshold — in one place.
- TDS = Tax Deducted at Source. You cut a slice of payment, deposit it in the payee's PAN.
- Deductor duties: deduct → deposit by 7th of next month → file quarterly return (24Q/26Q/27Q) → issue Form 16 / 16A.
- No PAN of payee → higher rate (typically 20%).
- Payee in lower bracket → can apply for lower-deduction certificate (Sec 197).
The cheat sheet — most-used sections (FY 25-26)
| Sec | Payment type | Threshold | Rate |
|---|---|---|---|
| 192 | Salary | Taxable salary | Slab rate |
| 192A | PF withdrawal | ₹50,000 | 10% |
| 194 | Dividend (Indian co.) | ₹5,000/year | 10% |
| 194A | Bank interest (FD / RD / savings) | ₹40k (₹50k senior) | 10% |
| 194B | Lottery / crossword | ₹10,000 | 30% |
| 194BA | Online gaming winnings | Nil | 30% |
| 194C | Payment to contractor | ₹30k single / ₹1L aggregate | 1% individual / 2% others |
| 194D | Insurance commission | ₹15,000 | 5% |
| 194DA | Life insurance maturity | ₹1L | 5% |
| 194H | Commission / brokerage | ₹15,000 | 5% |
| 194I(a) | Rent — plant / machinery | ₹2,40,000 | 2% |
| 194I(b) | Rent — land / building / furniture | ₹2,40,000 | 10% |
| 194-IA | Property purchase by buyer | ₹50L | 1% |
| 194-IB | Rent by individual (non-audit) | ₹50k/month | 5% |
| 194J | Professional / technical fees | ₹30,000 | 10% (2% technical / call centre) |
| 194K | MF income to unit holder | ₹5,000 | 10% |
| 194LA | Compensation on compulsory acquisition | ₹2,50,000 | 10% |
| 194M | Payment by individual / HUF | ₹50L | 5% |
| 194N | Cash withdrawal from bank | ₹1cr (₹20L if no ITR 3 yrs) | 2% / 5% |
| 194O | Payment by e-commerce operator | ₹5L (individual) | 1% |
| 194Q | Purchase of goods (turnover > ₹10cr) | ₹50L | 0.1% |
| 194R | Benefits / perquisites in business | ₹20,000 | 10% |
| 194S | Crypto / VDA transfer | ₹50k (₹10k business) | 1% |
| 195 | Payments to NRIs | No threshold | 10-30%+ or DTAA |
Under Section 206AA, if the payee doesn't provide PAN, TDS rate becomes the higher of: section rate × 1.2 OR 20%. Always collect PAN before paying.
The deductor routine — every month
Apply via Form 49B at tin-nsdl.com. Different from PAN — needed for all TDS filings.
Whichever earlier. Apply correct section + rate.
(30 April for March deductions.) Challan ITNS 281. Payee PAN + your TAN required.
24Q (salary) · 26Q (non-salary domestic) · 27Q (NRI) · 27EQ (TCS). Due 31 Jul / 31 Oct / 31 Jan / 31 May.
Form 16 (salary, annual): by 15 June. Form 16A (non-salary, quarterly): within 15 days of return due date.
What it costs to miss
The biggest hit is Section 40(a): if you didn't deduct TDS where required, the expense itself is disallowed in your income tax — you pay tax on what you spent.
The TDS rate is not the cost. The cost is the disallowance under Section 40(a) when you forget. A ₹50,000 designer fee not-TDS'd can cost ₹15,000 in extra income tax. Always deduct.
Quick answers
If you make any payment that requires TDS (consultant fees, rent > ₹2.4L, contractor > ₹30k, etc.), yes. TAN is free, takes 10 days.
Yes by default. But they can apply for a Section 197 certificate for lower / nil deduction. Without it, you must deduct.
TDS is on the value of the underlying service / payment excluding GST, as long as GST is shown separately on the invoice (CBDT Circular).
Net banking and debit card yes (RBI-permitted banks). Credit card not for direct tax payments via NSDL.
File a TDS correction statement (revised quarterly return). The deductee's 26AS and AIS get corrected once processed.
When you might want help
The mechanics are routine. Where help pays back: setting up TAN + monthly deduction + quarterly return discipline so you don't pay 1.5%/month interest, handling NRI payments (Section 195 + DTAA), and quarterly TDS reconciliation against 26AS to catch payee mismatches early.
Want fully-managed TDS?
Monthly deduction, quarterly returns, Form 16/16A issue. Fixed monthly fee, zero defaults.