TDS is deducted by the payer before releasing a payment and deposited with the government against the deductee's PAN. Each section has its own rate and a threshold below which nothing is deducted.

Where the deductee has not furnished a PAN, Section 206AA requires deduction at 20% or the normal rate, whichever is higher — the calculator applies that automatically.

Given: Professional fees of ₹2,00,000 under Section 194J, PAN provided

Threshold ₹50,000 is exceeded, so TDS applies at 10%

TDS = 2,00,000 × 10 / 100 = ₹20,000

Net payable to the consultant = 2,00,000 − 20,000 = ₹1,80,000

Without PAN, the rate would rise to 20% → TDS ₹40,000.

• Rates and thresholds are revised in each Finance Act — verify the current figures before deducting.
• Thresholds usually apply to aggregate payments during the financial year, not to a single invoice.
• TDS is deducted on the amount excluding GST where the GST component is shown separately on the invoice.
• Section 194C has a separate single-payment threshold in addition to the annual aggregate limit.
• Deducted TDS must be deposited and reported in the quarterly TDS return within prescribed due dates.

What if the payment is below the threshold?
No TDS is deducted — but watch the annual aggregate across all payments to the same party.

Is TDS deducted on the GST portion?
No, when GST is shown separately on the invoice TDS applies to the taxable value only.

Can the deductee claim it back?
Yes — TDS is credited against their tax liability and any excess is refunded when they file their return.