What is a TDS Calculator?
A TDS (Tax Deducted at Source) calculator is a free, online tool designed to help you determine whether TDS needs to be deducted on a particular transaction and, if so, calculate the exact amount. It offers a quick and easy way to check if the correct amount of TDS has been deducted and also provides basic insights into applicable TDS rules.

The TDS calculator is user-friendly, accessible at any time, and can be used repeatedly without limitations.

How Does a TDS Calculator Help?
The TDS calculator helps users estimate the amount of TDS deducted from their income, such as salary, and gives a clear view of their net (in-hand) earnings. This makes it easier to plan finances and manage budgets effectively.

No registration or login is required to use the calculator. Just input a few basic details, and the tool instantly provides accurate results, minimizing the time and errors associated with manual calculations.

How to Use a TDS Calculator?
Using the calculator is straightforward. You’ll need to enter the following information:

• Recipient Type: Select whether you are an individual, sole proprietor, HUF, or another category.
• Payment Amount: Enter the payment amount on which TDS might apply.
• Nature of Payment: Specify the type of payment—e.g., salary, fixed deposit interest, professional fee, etc.

Once the details are submitted, the calculator will indicate whether TDS is applicable. If applicable, it will show the precise amount to be deducted.

How is TDS Calculated?
TDS calculation depends on the nature of payment and relevant provisions under the Income Tax Act. Here's the basic formula used:

Formula:
Average Income Tax Rate = (Income Tax Payable based on slab rates) / (Estimated Annual Income) × 100

Benefits of Using an Online TDS Calculator

• Helps estimate the TDS amount on specific transactions quickly and accurately.
• Easy to use and convenient for both professionals and individuals.
• Provides the applicable TDS rate and basic rule for the selected transaction type.
• Verifies if the correct TDS has been deducted.
• Saves time and reduces the likelihood of manual errors with just a few clicks.

TDS Calculation on Salary

Step 1: Estimate your total taxable income for the financial year. This includes your salary, additional income sources (like rent or interest), and deductions/exemptions you're eligible for—such as HRA, medical reimbursements, and investment-related deductions.

Step 2: Divide the total income tax payable by the number of months you’re employed in the year to arrive at your monthly TDS deduction.

Example:
If your estimated taxable income for the financial year is ₹10,00,000 and you’re employed for all 12 months, then your monthly TDS would be:
₹10,00,000 × 30% / 12 = ₹25,000

Important Notes for Salary TDS Calculation:

• No PAN Card: If you haven’t provided your PAN, your employer will deduct TDS at a higher rate of 20% plus 4% cess on certain income types like FD interest, dividends, lottery winnings, etc.
• New Tax Regime Declaration: If you've opted for the new tax regime, your TDS will be calculated based on the updated tax slabs and deduction rules specific to that regime.
• TDS Refunds: If excess TDS has been deducted, you can claim a refund while filing your income tax return.

TDS Calculation Under Other Sections

Step 1: Identify the type of income and the relevant section of the Income Tax Act (e.g., professional fees under Section 194J, FD interest under Section 194A, etc.).

Step 2: Check the threshold limit applicable to that section. If the payment exceeds this limit, TDS is applicable. If not, no TDS needs to be deducted.

Step 3: Apply the prescribed TDS rate under that section to the income amount.

Note: If the recipient has not furnished a PAN, TDS must be deducted at 20% plus applicable cess.