TDS on Supplier Payment Calculator for Indian Accountants
Accounts payable teams deduct TDS on every contractor, professional and goods bill that crosses a threshold. This calculator takes the invoice, treats GST the way the CBDT circular requires, applies the no-PAN penalty rate and gives the net amount to release.
Your numbers
Under CBDT guidance, if GST is shown separately in the invoice, TDS is on the amount excluding GST.
Confirm the current rate and threshold for the section in the Income-tax Act and your tax advisor.
Your results
Rates and thresholds change with each Finance Act. Verify the section, rate and threshold before deducting. Not tax advice.
TDS and net payable vs bill amount
Sweeps Bill amount excluding GST from 50000 to 1000000, holding your other inputs fixed.
Payables exception report
Want TDS section and PAN exceptions listed automatically from your accounting data? Ask for an optional expert review.
Optional. The tool and every export work without this. No spam.
How to use it
Enter the bill amount before GST and the GST rate printed on the invoice. Say whether GST is shown separately, because that decides the TDS base. Pick the rate that matches the section you are deducting under, and tell the tool whether you hold the supplier PAN. Read the TDS to deduct and the net payable. Then book the deduction in Tally Prime, Busy or your ERP with the right TDS nature of payment so the 26Q return pulls the correct section.
Method and formula
TDS equals the TDS base times the effective rate. The base is the invoice value excluding GST when GST is shown as a separate line, otherwise the full invoice value. The effective rate is the section rate, or 20% if that is higher and the supplier has not given a PAN. Net payable is the total invoice amount less TDS. The tool rounds TDS to the nearest rupee, which matches the rounding of challan payments.
- Check the annual and single-bill thresholds for the section first.
- Deduct at the earlier of credit or payment.
- Lower deduction certificates under section 197 override the table rate.
Common mistakes
Frequent errors are deducting TDS on the GST component when it was billed separately, using the 194J professional rate for a pure technical-services contract, missing the cumulative threshold across bills in the year, and depositing late. Interest on late deduction and late deposit runs by the month, and a disallowance under section 40(a)(ia) can hit the expense claim. Keep PAN validation in the vendor master to avoid the 20% rate.
Frequently Asked Questions
Is TDS deducted on GST?
If GST is shown separately in the invoice, TDS is on the amount excluding GST. If the invoice shows one amount with GST included, TDS applies to the whole amount. Use the toggle in the tool to see both.
What if the supplier has no PAN?
The higher of the normal rate or 20% applies under section 206AA. The tool applies that automatically. Collect PAN in the vendor master to avoid the penalty rate and reconciliation problems in Form 26AS.
Which rate for a machine repair contract?
A works contract or labour for repair is generally 194C. Technical services can be 194J at 2%. The classification depends on the contract, so confirm with your tax advisor and keep it consistent.
Does the tool check thresholds?
No. Thresholds differ by section and change over time. Check them before using the result, and track the cumulative amount paid to each supplier through the year.
Netray can build a read-only exception report over your payables that finds bills with the wrong TDS section, missing PAN or a cumulative threshold crossed.
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