Why is the rate so much higher without a PAN?

Because without a PAN the deduction cannot be credited to anyone. The higher rate is the statutory consequence, and it is why collecting a PAN before payment is standard practice.

No. It is a prepayment of the payee's own liability and is credited on their return, so an over-deduction comes back as a refund.

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TDS Calculator

Tax deducted at source on a payment. The rate depends on the section, the nature of the payment and whether the payee gave a PAN, so it is an input rather than a lookup that would go stale.

Also called: tds deduction calculator, withholding tax india.

TDS to deduct

₹50,000

₹50,000 deducted at 10%, leaving ₹4,50,000 paid to the payee. The payment is above the 30000 threshold, so TDS applies.

Net paid to the payee

₹4,50,000

Rate applied

10%

Gross payment needed for a target net

₹5,55,556

On the threshold

The payment is above the 30000 threshold, so TDS applies.

How this is calculated

Computed from the published rates for the tax year you selected, which is not necessarily the current year. A calculation, not tax advice, and it does not know anything about your circumstances beyond the figures entered.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

TDS is a percentage of the gross payment, withheld by the payer and credited against the payee's eventual liability. Two things change the answer. Most sections have a threshold below which nothing is deducted, and it applies to the payment rather than the tax. And a payee who has not provided a PAN attracts a substantially higher rate, which is the mechanism that makes PAN collection non-negotiable in practice.

TDS = payment * rate, once the payment crosses the threshold for that section

A: Payment amount (currency)
r: Rate for the section (decimal)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a professional fee at ten percent

Payment amount: ₹5,00,000
TDS rate for the section: 10%
Threshold below which no TDS applies: ₹30,000
Payee has not provided a PAN: No
Rate where no PAN is provided: 20%

TDS to deduct₹50,000

arithmetic identity

Open this example

no PAN attracts the higher rate

Payment amount: ₹5,00,000
TDS rate for the section: 10%
Threshold below which no TDS applies: ₹30,000
Payee has not provided a PAN: Yes
Rate where no PAN is provided: 20%

TDS to deduct₹1,00,000

boundary: the mechanism that makes PAN collection universal

Open this example

below the threshold nothing is deducted

Payment amount: ₹25,000
TDS rate for the section: 10%
Threshold below which no TDS applies: ₹30,000
Payee has not provided a PAN: No
Rate where no PAN is provided: 20%

TDS to deduct₹0

degenerate case

Open this example

Method and limits

What it assumes

One payment in isolation. Aggregation rules across a year are not applied.

What it deliberately does not model

Rates and thresholds vary by section and change with each Finance Act. Enter the ones that apply.
Surcharge and cess on TDS for non-resident payees are not included.

Sources

Income-tax Act, 1961 and the Finance Act (primary government)

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Why is the rate so much higher without a PAN?: Because without a PAN the deduction cannot be credited to anyone. The higher rate is the statutory consequence, and it is why collecting a PAN before payment is standard practice.
Is TDS an extra tax?: No. It is a prepayment of the payee's own liability and is credited on their return, so an over-deduction comes back as a refund.