1. What is TDS on Bill?

TDS (Tax Deducted at Source) is the amount deducted from a payment when making certain types of payments like rent, commission, professional fees, etc. The deductor deposits this tax with the government.

2. How Does the Calculator Work?

The calculator uses the simple TDS formula:

Where:

• Bill Amount — The total amount of the invoice or bill
• TDS Rate — The applicable tax deduction rate in percentage

Explanation: The calculator multiplies the bill amount by the TDS rate (converted from percentage to decimal) to get the TDS amount.

3. Importance of TDS Calculation

Details: Accurate TDS calculation ensures proper tax compliance, avoids penalties for under-deduction, and helps in proper cash flow management for both payer and payee.

4. Using the Calculator

Tips: Enter the bill amount in your local currency and the applicable TDS rate in percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between TDS and TCS?
A: TDS (Tax Deducted at Source) is deducted by the payer, while TCS (Tax Collected at Source) is collected by the seller at the time of sale.

Q2: When should TDS be deducted?
A: TDS should be deducted at the time of payment or credit, whichever is earlier, as per the applicable provisions.

Q3: What are common TDS rates?
A: Rates vary by country and payment type (e.g., 1% for advertising, 10% for rent, 2% for contract payments in some jurisdictions).

Q4: Can TDS be refunded?
A: Yes, if total tax liability is less than TDS deducted, the excess can be claimed as refund when filing tax returns.

Q5: Are there TDS threshold limits?
A: Yes, most jurisdictions have minimum thresholds below which TDS is not required to be deducted.