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TDS Payment Tool

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How to pay TDS using the TDS Payment tool

You can make TDS payments easily by following these simple steps

Pay TDS now

Select your TDS category, tax type, and assessment year

Next, go ahead and enter your TAN and address

Enter contact details & amount details: surcharge, penalty

Click Pay to finish. You’ll receive the challan via email provided.

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  • Collaborate with your accountant

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What is TDS

What is TDS?

TDS (Tax deducted at source) is a type of direct tax applicable in India. Every business or individual is required to deduct a certain percentage as TDS before making the full payment to contractors, professionals or employees.

When should TDS be deposited

When should TDS be deposited?

TDS should be collected and deposited to the government by 7th of the subsequent month. However, the tax deducted in March should be deposited by 30th April.

For example, the TDS payment due date for May will be 7th June. But, for March it will be 30th April.The TDS due date for March is extended to accommodate the closing of the accounting books for the financial year-end.
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TDS Categories for Business Payments

1. TDS on contractor
payments under section 194C

Businesses usually hire contractors for performing certain jobs rather than offering permanent roles. Here is the list of services where TDS on contractor payments is applicable if contractors or subcontractors are Indian residents :

  • List ItemAdvertising services
  • List ItemCatering services
  • List ItemCarriage of goods & passengers by a mode other than railways
  • List ItemBroadcasting and telecasting services
  • List ItemSupply of labour for works contract

Exceptions for TDS on contractor payments under section 194C

  • List ItemNo TDS will be deducted on contractor payments when the amount paid does not exceed Rs 30,000 in a single contract and Rs 1,00,000 in total during a financial year
  • List ItemTDS is not required for payments made by HUF or an individual to a resident contractor for personal purposes
  • List ItemPayments made to a contractor engaged in plying, leasing or hiring of goods carriages are not subject to TDS, provided such contractor provides his PAN to the payer
Section 194C

2. TDS on professional
payments under section 194J

Businesses need to deduct tax at source for payments made to resident professionals like lawyers, CAs, writers, designers and consultants among others.

Following payments are covered under section 194J :

  • List ItemFees for technical services including consulting fees
  • List ItemProfessional fees
  • List ItemDirector’s fees other than salary payments
  • List ItemNon-compete fees
Professional payments less than Rs. 30,000 are not liable to TDS, except the director’s fees, where no such limit is applicable.
Section 194J

3. TDS on rent payments
under section 194I

Small businesses and startups rent certain assets for their day-to-day operations. Section 194I is applicable on any amount paid for lease, sublease, tenancy, or agreement for using the following assets :

  • List ItemBuilding (inclusive of factory buildings)
  • List ItemLand appurtenant to any building (inclusive of factory buildings)
  • List ItemA plant like an industrial manufacturing plant
  • List ItemEquipment like tools, computer systems, networks, other infrastructure required for running a business
  • List ItemMachinery
  • List ItemAny furniture or fittings
The rental payments for furniture and building are subject to 10% TDS. However, 2 %TDS is applicable for plant and machinery rental payments.
Section 194I

4. TDS on e-commerce
payments under section 194O

Section 194O announced in the Union Budget 2020 dictates every e-commerce operator to deduct 1 % TDS (0.75% for FY 2020-21 applicable till March 31, 2021) of the gross amount of sales of the e-commerce participant.

If the e-commerce participant is a resident Individual or HUF and the gross sales exceed Rs. 5,00,000 in the financial year, TDS will be deducted at the rate of 1% on Gross Sales.If the deductee does not provide the PAN or Aadhaar, then TDS shall be deducted at the rate of 5% irrespective of the gross sales amount.
Section 194O

TDS Rate chart for FY 2021-2022

Section
Nature of Payment
Threshold (Rs.)
Individual/ HUF
Others
TDS Rate (%)
194A
Interest (Others)
5000
10%
10%
194C
Contractor – Single Transaction
30000
1%
2%
194C
Contractor – During the F.Y.
1 Lakh
1%
2%
194H
Commission / Brokerage
15000
5%
5%
194I(a)
Rent of Plant / Machinery / Equipment
2.40 Lakh
2%
2%
194I(b)
Rent of Land Building & Furniture
2.40 Lakh
10%
10%
194J(a)
Fees-tech srvcs, call centre, royalty for sale etc.
30000
2%
2%
194J(b)
Fee for professional service or royalty etc.
30000
10%
10%
194N
Cash withdrawal in excess of 1 crore during the previous year from 1 or more account with a bank or co-operative society (wef 01.09.2019)
1 Crore
10%
10%
1940
TDS on e-commerce participants
5 Lakh
1%
1%
194Q
Purchase of Goods
50 Lakh
0.10%
0.10%
Note: Budget 2021 has introduced new provision that if the Tax return is not filed by the deductee, then TDS to be deducted at twice the applicable rate. This will be effective 1st July 2021

Penalties for late and
non-deduction
of TDS payments

According to the section 201(1A) of the Income Tax Act, an interest @1.5% per month will apply for non-deduction of TDS from the date on which tax was deductible to the date on which tax is deducted.

In case of late TDS deposition, the same interest of 1.5% will apply from the date of deduction to the payment date.

The interest is calculated on a monthly basis, so part of a month will also be considered as a full month.

Penalties for non-filling
of TDS returns

A statement of TDS return has to be filed quarterly by the deductor once the TDS is deposited. The due date for filing TDS returns are as follows:

Quarter
Due Date
April to June (Q1)
31st July of the same FY
June to September (Q2)
31st October of the same FY
October to December (Q3)
31st Janurary of the same FY
January to March (Q4)
31st May of the same FY
Delay in late filing of TDS returns will attract a penalty of Rs 200 per day.
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What is TAN

What is TAN

What is TAN

Every business deducting TDS needs to obtain TAN (Tax Deduction and Collection Account Number), a 10-digit alphanumeric number from the Income Tax Department and then register themselves as a deductor on the TRACES website.

Not quoting TAN in TDS returns, TDS payments and TDS challans and certificates may attract a penalty of Rs 10,000 for the deductor.

Self Assessment Tax v/s Regular Assessment Tax

Self Assessment Tax

Self Assessment Tax

Self-assessment tax is calculated by the taxpayer themselves, by calculating income, deductions and exemptions. The taxpayer can file the income tax return if any TDS or advance tax is to be paid on their taxable income.

Regular Assessment Tax

Regular Assessment Tax

Regular assessment tax is calculated by the Income Tax Department during the assessment of taxpayer’s income in a financial year. If any tax is to be paid, the assessing officer raises an income tax demand, which the taxpayer must respond to and accordingly pay the taxes.

While paying income tax, you need to select 200 as the ‘type of payment’ for self-assessment tax and 400 for payment made for a demand raised by the income tax authorities.

What is Challan no. 281

TDS Challan 281 must be deposited by corporates and non-corporate businesses while paying TDS and TCS (Tax Collected at Source).

TDS for company deductee vs non-company deductee

While paying TDS, you need to select either of the two -

Company Deductee

(0020) Company deductee - if TDS is deducted against payment to a company or a business (i.e. Individual Sole Proprietor, Partnership Firm, HUF)

Non Company Deductees

(0021) Non-company deductee - if TDS is deducted against payment to an individual

TDS Example

Example for
understanding TDS

Let’s say a Private Ltd. Company (Sapna) makes a vendor payment of Rs 100,000/- as office rent to a builder.

Now, Sapna Pvt. Ltd. is required to deduct & deposit TDS of Rs 10,000/- (10%) via TDS Challan 281 and make a net payment of Rs 90,000/- to the builder.

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Trusted by Chartered Accountants in India

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Frequently Asked Questions

FAQs

What is RazorpayX TDS Payment Tool ?
What is RazorpayX TDS Payment Tool ?

RazorpayX TDS Payment Tool is an application that enables businesses to pay TDS online, across different categories seamlessly.

Do I need to enter TAN and address everytime I pay ?
Do I need to enter TAN and address everytime I pay ?

No, you need to enter TAN and address only when you are paying TDS for the first time. For subsequent payments, the details will be prefilled if you’re using the same device and browser.

How do I select Tax Applicable ?
How do I select Tax Applicable ?

Tax applicable should be selected based on the type of vendors/ beneficiaries of the payments you have made. If the beneficiaries/vendors are companies, you need to select Company Deductees (0020) otherwise, you can select Non Company Deductees (0021). You can assign Tax Payment from one major head to another major head during quarterly tax filing as well.

Can I pay TDS via credit card and UPI ?
Can I pay TDS via credit card and UPI ?

Yes, all you need to do is select the relevant details on the RazorpayX TDS Payment Tool, & pay through the Razorpay payment gateway in the next step. You can choose your preferred mode of payment here and pay the TDS.

How can I access the challan after the TDS payment ?
How can I access the challan after the TDS payment ?

Once the payment is successful, the challan will be sent directly to your email address. You can download and store the challan from there for future reference.

What is RazorpayX TDS Payment Tool ?

RazorpayX TDS Payment Tool is an application that enables businesses to pay TDS online, across different categories seamlessly.

Do I need to enter TAN and address everytime I pay ?

No, you need to enter TAN and address only when you are paying TDS for the first time. For subsequent payments, the details will be prefilled if you’re using the same device and browser.

How do I select Tax Applicable ?

Tax applicable should be selected based on the type of vendors/ beneficiaries of the payments you have made. If the beneficiaries/vendors are companies, you need to select Company Deductees (0020) otherwise, you can select Non Company Deductees (0021). You can assign Tax Payment from one major head to another major head during quarterly tax filing as well.

Can I pay TDS via credit card and UPI ?

Yes, all you need to do is select the relevant details on the RazorpayX TDS Payment Tool, & pay through the Razorpay payment gateway in the next step. You can choose your preferred mode of payment here and pay the TDS.

How can I access the challan after the TDS payment ?

Once the payment is successful, the challan will be sent directly to your email address. You can download and store the challan from there for future reference.