How this calculation works
Calculate withholding from a payment after you have established the applicable TDS rate and taxable payment base. The result separates the amount deducted from the cash paid to the recipient. It does not select a section, test a threshold or calculate the recipient’s final annual income tax.
Worked example
This example uses illustrative inputs. Your current result is shown above.
For a ₹1,00,000 payment at an entered 10% TDS rate, the deduction is ₹10,000 and the recipient receives ₹90,000. This is a rate-arithmetic example, not a statement that 10% applies to every ₹1,00,000 payment.
Assumptions and limits
- The rate is supplied by the user and applies to the whole entered payment base.
- Thresholds, PAN status, exemptions, certificates, gross-up and inclusion or exclusion of GST are not determined.
- The calculation does not reconcile a tax-credit statement or determine final tax payable.
Questions people ask
Is the default rate correct for my invoice?
Not necessarily. TDS treatment depends on the payment category and applicable conditions. Establish the correct base and rate before using this multiplication.
Is TDS an extra amount added to the invoice?
In this form it is deducted from the entered gross payment. A contract that guarantees a net-of-tax receipt needs a gross-up calculation, which this form does not perform.
Does the TDS amount settle my annual income tax?
No. Withholding is a payment-side calculation. Final liability depends on the full annual tax computation and eligible credits.