What is TDS, and when does my business have to deduct it?
TDS is income tax your business deducts from certain payments and deposits with the government for the payee. Once you pay salaries, professional fees, contractors or rent above set limits, you need a TAN, must deduct, deposit by the 7th of the next month, and file quarterly TDS statements by 31 July, 31 October, 31 January and 31 May. Common rates: 10% on professional fees above Rs 50,000, 1% (individual) or 2% to contractors above Rs 30,000 a bill or Rs 1 lakh a year, salary at slab rates. From 1 April 2026 it all sits in section 393 of the Income-tax Act 2025.
A current rate table for 2026-27 that notes all TDS provisions now sit in section 393 of the Income-tax Act 2025, with thresholds and rates mapped to the old section numbers founders still hear.
An explainer of how TDS works for a payer: deposit by the 7th of the following month and quarterly statements due 31 July, 31 October, 31 January and 31 May.
The official TAN service run for the Income Tax Department: what TAN is under section 397 of the Income-tax Act 2025, how to apply online, and the Rs 77 processing fee including GST.
