TDS Applicability Checker

TDS Applicability — Which Section Applies on Which Payment?

The Income Tax Act, 1961 specifies different TDS sections for different types of payments. Identifying the correct section is critical because the rate, threshold limit, applicable form, and even who is responsible for deduction all vary by section. Using the wrong section or rate can lead to short deduction notices, interest u/s 201(1A), and penalties u/s 271C.

Complete TDS section reference — FY 2025-26

How to determine TDS applicability — key rules

• Who deducts: TDS is deducted by the payer (deductor), not the payee. Individuals and HUFs not subject to tax audit are generally not required to deduct TDS except u/s 194IA, 194IB, 194M, and 194S.
• Threshold limits: TDS applies only when the aggregate payment to a single person in a financial year crosses the prescribed threshold. Once the threshold is crossed, TDS applies on the entire amount including earlier payments.
• Lower deduction certificate: Deductees can apply for a lower or nil deduction certificate u/s 197 if their total income is below the taxable limit. TDS must be deducted at the rate specified in the certificate.
• 206AA — No PAN: If the deductee does not provide PAN, TDS must be deducted at the higher of 20% or the applicable rate. This cannot be avoided even if the normal rate is lower.
• 206AB — Non-filer: If the deductee has not filed ITR for the last 2 years and TDS exceeded ₹50,000 in each of those years, double the normal rate or 5% — whichever is higher — applies.