If your startup or tech company pays vendors, contractors, or cloud providers above threshold amounts, TDS obligations apply under the Income Tax Act.
Key TDS sections for tech businesses:
Section 194C: TDS at 1% (individual/HUF) or 2% (company) on contractor payments above Rs 30,000 per transaction or Rs 1 lakh per year
Section 194J: TDS at 10% on professional fees (software development, consulting, legal) above Rs 30,000
Section 194-O: TDS at 1% on e-commerce operator payments to sellers above Rs 5 lakh
Section 195: TDS on payments to non-resident foreign vendors (AWS, Google Cloud, Stripe) , rate depends on DTAA
Filing deadlines:
Deposit TDS by 7th of the following month
File TDS returns quarterly (Form 24Q / 26Q) by 31st of the month after quarter end
Missing TDS deposits attracts interest at 1.5% per month. Late TDS returns attract Rs 200/day penalty.
Tax Garden (https://taxgarden.in) handles TDS computation, deposit, and quarterly return filing for startups and MSMEs in Hyderabad.
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