Figures for tax year 2026-27, checked on 15 October 2026. Have your CA confirm before you file.
You sent an invoice for ₹1,00,000 and ₹90,000 arrived. The missing ₹10,000 is TDS (tax deducted at source). Your client paid it to the government against your PAN, and it counts as tax you have already paid for the year. You get it back as credit, or as cash if you have overpaid. That only works if you check it reached your PAN.
Which rate your client will use
From 1 April 2026, all of these sit in one table in section 393 of the Income-tax Act, 2025. The old section numbers are in brackets because your clients' accounts teams will still use them.
What the client says you are paying for | Rate | Deducted once payments to you cross |
|---|---|---|
Professional fees (old 194J) | 10% | ₹50,000 in the tax year |
Fees for technical services (old 194J) | 2% | ₹50,000 in the tax year |
Contract work (old 194C), you as an individual | 1% | ₹30,000 for one payment, or ₹1,00,000 in the year |
Sale through an Indian e-commerce platform (old 194-O) | 0.1% | Any amount, with an exemption for individuals selling up to ₹5 lakh a year who have given PAN or Aadhaar |
Any of the above, and you have not given your PAN | 20% (5% on e-commerce sales) | Same thresholds |
The same design job can be booked as professional fees by one client and as contract work by another. "Professional services" in the Act includes advertising alongside the listed professions, and finance teams lean towards 10% when unsure. You cannot force a rate, but you can ask what they are using before the first invoice, so the amount you receive is no surprise.
Not every client has to deduct. Companies, firms, LLPs and trusts do. An individual client deducts only if their own business or practice crossed ₹1 crore or ₹50 lakh in receipts the year before. A small individual client below that deducts 2% only once their payments to you cross ₹50 lakh in a year, which rarely happens.
Quoting and invoicing with TDS in mind
Quote the fee, then GST if you are registered, and say TDS applies. The client deducts TDS on the fee, not on the GST, as long as GST appears as its own line.
Invoice line | Amount |
|---|---|
Website redesign, phase 1 | ₹1,00,000 |
IGST at 18% | ₹18,000 |
Invoice total | ₹1,18,000 |
Less TDS at 10% on ₹1,00,000 (deducted by client) | ₹10,000 |
Amount you receive | ₹1,08,000 |
If you are not registered for GST, the invoice is ₹1,00,000 and you receive ₹90,000. GST-ready invoicing has the full invoice format, and GST registration for freelancers explains when you need a GSTIN.
Put a short line in your proposal so nobody argues about it later.
Fees: ₹1,00,000 + 18% GST. Where you deduct TDS, please deduct it on the fee excluding GST, quote my PAN (ABCDE1234F) and share the TDS certificate after you file your quarterly return.
Your client deposits the tax monthly and reports it in a quarterly TDS return. Credit appears against your PAN only after that return is filed, so a June payment may not show until August.
Checking your tax statement
The e-filing portal at incometax.gov.in has a statement that lists every TDS entry against your PAN, client by client. For tax year 2026-27 it is the Annual Information Statement, Form No. 168 under the new rules. For earlier years you will see the older AIS and Form 26AS. The TDS certificate a client gives you is now Form No. 131 (it was Form 16A).
Step 1: Download the statement
15 minutesOpen the Annual Information Statement for the tax year. Besides TDS it shows interest, foreign remittances and tax you paid yourself.
You'll neede-filing loginStep 2: Match each client
30 minutesFor every Indian client that deducted, check the amount credited and the TDS. Your invoices and the statement should agree, allowing for timing at year end.
You'll needyour invoice listStep 3: Chase what is missing
If a deduction is missing or wrong, the client has to file a correction to their TDS return. You cannot fix it from your side.
You'll needclient's accounts contactStep 4: Give feedback on the portal
10 minutesWhere the statement shows something wrong, such as a duplicate, use its feedback option so the portal does not treat it as extra income.
Do this every quarter, not in August. A client is much easier to chase in October about a June payment than a year later.
Subject: TDS for invoice INV-2026-014 not showing against my PAN Hi Priya, Thanks for clearing invoice INV-2026-014 (₹1,00,000, paid 12 June 2026). You deducted ₹10,000 as TDS, but it does not appear in my Annual Information Statement for the June quarter. Could your team check that the quarterly TDS return has my PAN as ABCDE1234F and, if needed, file a correction? A copy of the TDS certificate would help too. Thanks, Rohan
Getting the money back
There is no separate claim form. When you file your return, the TDS in your statement is credited as tax already paid. If it exceeds the tax you owe, the extra is refunded to your pre-validated bank account after processing.
Take Arjun, a writer with ₹20 lakh of receipts whose CA files him under regular books with ₹9 lakh of expenses. His income is ₹11 lakh, so under the new regime the rebate takes his tax to nil. Clients deducted ₹1,10,000 during the year, and all of it comes back as a refund once his return is processed.
TDS also reduces the advance tax you owe through the year. Income tax for freelancers shows how.
TDS is credited in the year the matching income is taxed. If a client deducted in March for an invoice you counted in the following tax year, ask your CA how to carry the credit across.
If TDS will clearly be far more than your tax, for example because your expenses are high, you can apply to the Assessing Officer for a lower or nil deduction certificate (section 395, old 197) in Form No. 128 (Form 13 under the old rules) and give it to your clients. It is worth the paperwork for large retainers, not for a few small invoices.
Foreign clients and platforms
A client outside India does not deduct Indian TDS, so foreign payments arrive in full and the tax on them is yours to pay through advance tax. Some countries withhold their own tax on payments abroad. If a client does that, keep their withholding certificate; you may be able to claim credit in India by filing Form No. 44 (Form 67 under the old rules) within twelve months of the end of the tax year, provided your return is filed on time or as a belated return. A foreign tax credit claim means filing ITR-3 rather than ITR-4. Getting paid from abroad covers the bank paperwork.
Foreign marketplaces paying you from abroad generally do not deduct Indian TDS either. Indian platforms may deduct 0.1% as an e-commerce operator, or 10% if they treat the payout as professional fees. Check the entry in your statement for the platform's TAN and the section to see which.
If any of this does not match what you see in your statements, When to hire a CA explains what a CA can sort out for you.
Common questions
What is the TDS rate for freelancers in India?
It depends on how the client classifies your work. Professional fees attract 10% once a client pays you more than ₹50,000 in a tax year. Fees for technical services attract 2%. Contract work attracts 1% for an individual contractor, above ₹30,000 for a single payment or ₹1 lakh in a year. Indian e-commerce operators deduct 0.1%. Without a PAN, the rate jumps to 20% in most cases.
Is TDS deducted on the GST part of my invoice?
No, if GST is shown separately on the invoice. A CBDT circular from 2017, which still applies under the new Act, says TDS is worked out on the amount excluding GST in that case. On an invoice of ₹1,00,000 plus ₹18,000 GST, a client deducting 10% should deduct ₹10,000 and pay you ₹1,08,000. If GST is not shown separately, the client may deduct on the full amount.
How do I get my TDS refund as a freelancer?
File your income tax return and claim the TDS shown in your Annual Information Statement as tax already paid. If the TDS is more than your total tax for the year, the excess comes back as a refund to your pre-validated bank account after the return is processed. There is no separate refund application.
Do foreign clients deduct TDS?
Not Indian TDS. A client outside India has no obligation under Indian TDS rules. Some countries withhold their own tax on payments abroad. If that happens, you may be able to claim credit for it in India by filing Form No. 44 (Form 67 under the old rules) with the client's withholding certificate. Ask your CA, because a foreign tax credit claim also rules out ITR-4.
