TDS Compliance & Planning

Statutory basis: current TDS rates and thresholds under the Income-tax Act, 1961, applicable for FY 2025-26/2026-27.

Section 194C (payments to contractors/sub-contractors): 1% where the payee is an individual/HUF, 2% for any other payee; no TDS required where a single payment does not exceed ₹30,000 or aggregate payments in the financial year do not exceed ₹1,00,000.

Section 194H (commission or brokerage): 2% TDS; the annual threshold was raised from ₹15,000 to ₹20,000 effective FY 2025-26.

Section 194-I (rent): 2% for rent of plant and machinery, 10% for rent of land, building, furniture, or fittings; threshold ₹2,40,000 per annum, below which no TDS applies.

Section 194J (fees for professional or technical services): 10% for professional services (legal, medical, engineering, accountancy, architecture, and similar); 2% for technical services, royalty in the nature of a sale/franchise consideration, and call-centre payments; the annual threshold was raised from ₹30,000 to ₹50,000 effective FY 2025-26.

TDS returns are filed quarterly on Form 26Q (for the sections above); late filing attracts a fee under Section 234E of ₹200 per day, capped at the amount of TDS deductible/collectible for that return.

Sources: tax2win.in, bajajfinserv.in, and taxaj.com on the current 194C/194H/194-I/194J rates and FY 2025-26 threshold revisions; gimbooks.com on the ₹20,000 (194H) and ₹50,000 (194J) revised thresholds (WebSearch, 8 Sep 2026); Section 234E fee cap cross-ratified from this firm's own verified tds-return-filing regulatory_basis entry. The Income-tax Act 2025's Section 392/393/394 renumbering of the TDS chapter (effective 1 April 2026) is a live, still-developing area and is deliberately not asserted here pending first-party CBDT/incometax.gov.in confirmation.

TDS compliance is the management of the tax deducted at source under the Income-tax Act 1961 — the deduction of the TDS on the prescribed payments under the sections of Chapter XVII-B — the salaries under Section 192, the contractors under Section 194C, the rent under Section 194I, the professional fees under Section 194J, the interest and the others — the deposit of the TDS within the prescribed timelines, the quarterly TDS returns, the TDS certificates, and the reconciliation with the Form 26AS. The TDS is the machinery through which the tax is collected at the source of the payment, and the deductor is its operator.

The TDS compliance is the monthly and the quarterly discipline of the deductions — every payment to the contractor, the professional, the landlord and the employee carries the TDS at the prescribed rate, deposited by the 7th of the next month, reported in the quarterly returns and certified to the deductees. The compliance is the intersection of the payments, the rates and the records, and its accuracy is checked by the deductees' own returns and the department's matching.

The cost of a broken TDS compliance is the disallowance and the interest: the payments without the TDS disallowed under Section 40(a)(ia), the delays with the interest, the short deductions with the consequences, and the mismatches that the department's systems find.

This service is for businesses and individuals deducting TDS. We set up the TDS process — the payment mapping, the rates and the calendar — deduct and deposit the TDS within the timelines, file the quarterly returns and issue the certificates, reconcile with the Form 26AS, and review the positions so the deductions are right and the payments remain deductible.