Section 194J TDS Calculator for Freelancers & Consultants
If your client has ever paid you less than your invoice total, the gap is probably TDS: tax deducted at source under Section 194J. This calculator shows how much a client should deduct from a professional or technical-services invoice, and what lands in your bank account after the deduction.
TDS is not an extra tax. It is an advance payment of your own income tax, deducted by the client and deposited with the government in your name. You claim it back as a credit when you file your return.
What Section 194J covers
Section 194J applies when a business client pays a resident individual or firm for:
- Professional services: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, and similar work
- Technical services: fees for technical services other than professional services, and call-centre operations
- Royalty and non-compete fees
- Director's fees paid outside salary
Most freelancers and consultants deal with the first two.
The rates
| Payment type | TDS rate |
|---|---|
| Professional services, royalty, non-compete fees, director's fees | 10% |
| Fees for technical services (other than professional services), call-centre services | 2% |
| Any of the above if the payee has not given a valid PAN | 20% (Section 206AA) |
Rates for the current year are unchanged from the previous one, according to current guidance.
The ₹50,000 threshold
The client is not required to deduct TDS until total payments to you in a financial year cross ₹50,000. The limit was raised from ₹30,000 for FY 2025-26, and some older websites still quote the old figure. It is counted per client, per category, across the whole year, not per invoice.
Once the total crosses the limit, TDS applies to the entire cumulative amount, not only the portion above ₹50,000.
Example. A client pays you ₹40,000 in April (no TDS, since the total is under ₹50,000). In August they pay another ₹30,000. The cumulative total is now ₹70,000, so the client deducts 10% on ₹70,000 = ₹7,000, taken from the August payment. You receive ₹23,000 that month.
A worked example
You invoice a company ₹1,00,000 plus 18% GST (₹18,000), shown separately. The invoice total is ₹1,18,000.
TDS is calculated on the ₹1,00,000 service value, not the GST amount, when GST is shown separately on the invoice.
| Scenario | TDS | You receive |
|---|---|---|
| Professional services, PAN provided (10%) | ₹10,000 | ₹1,08,000 |
| Technical services, PAN provided (2%) | ₹2,000 | ₹1,16,000 |
| PAN not provided (20%) | ₹20,000 | ₹98,000 |
The ₹18,000 GST is still yours to pay to the government through your GST return, whatever the TDS.
Which rate applies to my work?
This is the most common point of confusion. Whether your services count as "professional" (10%) or "technical" (2%) depends on the nature of the work, and websites disagree, especially for software and IT work. In practice, your client decides which rate to apply, based on the contract and invoice description. Ask which they use, and make sure your invoice describes the service accurately. Don't assume the lower rate applies to you.
Which clients actually deduct TDS?
Not every client has to. Companies, firms and most organisations do. An individual or HUF client generally only has to deduct if their own turnover crosses the audit limits in the previous year (₹1 crore for a business, ₹50 lakh for a profession), and not for purely personal spending. If a client is a private individual paying for something personal, no TDS applies.
Getting credit for TDS deducted
- Ask the client for Form 16A, the TDS certificate.
- Check that the amount appears in your Form 26AS or Annual Information Statement (AIS). It only shows if the client filed their TDS return with your correct PAN.
- Claim the credit in your income tax return. It reduces the tax you owe, and if the TDS exceeds your final liability, you get a refund.
- If the amount is missing from 26AS, follow up with the client. Without it, you cannot claim the credit.
How this fits with 44ADA and advance tax
TDS credit is available whether you file under Section 44ADA or on regular books. It reduces your net tax, and so reduces the advance tax you need to pay. Under 44ADA, advance tax is due in a single instalment by 15 March. See the Advance Tax Calculator to work out the balance after TDS, and the Freelancer Tax Calculator to compare 44ADA with actual expenses.
A note on the new Income-tax Act, 2025
From 1 April 2026, the provisions of Section 194J are carried into Section 393(1) of the Income-tax Act, 2025. The section number changes. The rates and the ₹50,000 threshold have been reported as unchanged. Your invoices and Form 16A may show either reference depending on the period.
Common mistakes
- Not giving your client your PAN. Without it, TDS jumps to 20%, and linking the credit to your account becomes harder.
- Calculating TDS on the GST-inclusive total when GST is shown separately. TDS applies to the service value only.
- Using the old ₹30,000 threshold. The limit for FY 2025-26 and later is ₹50,000.
- Not checking Form 26AS. A deduction the client never reported is a credit you can't claim.