TDS Sections Explained: Which One Applies to Your Payment?
A plain-language guide to the most common TDS sections under the Income Tax Act — 194C, 194J, 194H, 194I, 192 — with applicable rates, PAN implications, and filing timelines.
What Is TDS?
Tax Deducted at Source (TDS) is a mechanism under the Income Tax Act 1961 where the payer (deductor) deducts tax before making specified payments and deposits it with the government. The deductee receives a TDS certificate (Form 16 / Form 16A) and claims credit while filing the ITR.
Common TDS Sections
Section 192 — Salary
- Who deducts: Employer
- Rate: As per applicable income tax slab of the employee
- Certificate: Form 16 (Part A + B)
- Note: No threshold — TDS applies from the first rupee if projected annual salary exceeds basic exemption (₹2.5L old / ₹3L new regime)
Section 194C — Payment to Contractors/Sub-contractors
- Who deducts: Any person making payments to resident contractors
- Rate: 1% (individuals/HUF); 2% (others)
- Threshold: Single payment > ₹30,000 OR aggregate > ₹1,00,000 in FY
- Example: Advertising agency, transporter, manufacturer on a job-work contract
Section 194H — Commission / Brokerage
- Who deducts: Any person (other than individuals/HUF not covered under §194-I)
- Rate: 5%
- Threshold: > ₹15,000 in FY
- Example: Commission paid to insurance agents, marketing agents, brokers
Section 194I — Rent
- Rate: 10% (land/building/furniture/fittings); 2% (plant/machinery/equipment)
- Threshold: > ₹2,40,000 in FY
- Example: Office rent, warehouse rent, lease of equipment
Section 194J — Professional / Technical Services / Royalties
- Rate: 10% (professional services, royalties, non-compete fees); 2% (technical services, call centre)
- Threshold: > ₹30,000 in FY
- Example: CA/lawyer fees, software development, technical consultancy
Section 194Q — Purchase of Goods (Buyer's TDS)
- Rate: 0.1%
- Applicability: Buyer whose turnover > ₹10 Cr in preceding FY; purchase value > ₹50L per seller
- Note: Overrides §206C(1H) when both buyer and seller thresholds are met
Missing PAN — Higher TDS Rate
If the deductee fails to furnish PAN:
- TDS is deducted at the higher of: applicable rate, 20%, or rate in force
- Exception: §206AA applies but §206AB (for non-filers) overrides at 5% or 10% depending on section
Deposit Due Dates
| Deductor Type | April–Feb | March |
|---|---|---|
| Government deductor | Same day | 7th April |
| Non-government | 7th of following month | 30th April |
TDS Return Deadlines (Form 24Q / 26Q)
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | Apr–Jun | 31 July |
| Q2 | Jul–Sep | 31 October |
| Q3 | Oct–Dec | 31 January |
| Q4 | Jan–Mar | 31 May |
Note: Rates and thresholds are for FY 2026-27. Amendments may apply — verify with a CA before deducting.
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