Freelancer Invoice with TDS Generator

How this calculator works

Why TDS exists for freelancers

If you're an employee, your employer deducts TDS from your salary every month and pays it to the income tax department on your behalf. You see the deduction on your payslip, the cumulative amount in Form 16 at year-end, and you reconcile it when filing your ITR.

Freelancers don't have a single employer. So the income tax department asks the buyer (your client) to withhold tax at source and remit it directly. From the freelancer's side, this means each invoice gets short-paid by the TDS amount, and the client issues a Form 16A every quarter showing what was deducted and remitted under your PAN.

You don't lose this money. When filing your annual ITR, the TDS deducted appears in your Form 26AS and AIS (annual information statement), and you offset it against your final tax liability. If your total tax owed is less than your accumulated TDS, you get a refund. If it's more, you pay the balance. Either way, the tax department's records match your records.

Section 194J — professional and technical services

This is the section that catches most freelancers. It applies when a company (or an individual under tax audit) pays you for professional or technical services. The rules from FY 2025-26 onwards, continuing in FY 2026-27:

• Threshold: ₹50,000 aggregate per payee per financial year (raised from ₹30,000)
• Professional services: 10% TDS
• Technical services: 2% TDS
• No PAN furnished: 20% TDS under Section 206AA
• Tax deducted at the time of credit or payment, whichever is earlier

What counts as "professional"? Doctors, lawyers, chartered accountants, architects, engineers, interior designers, company secretaries, sportspersons, coaches, content writers, journalists, film artists. The CBDT has a notified list. What counts as "technical"? Software development, IT support, system design, photography and video work, technical translation. The line between "professional" and "technical" matters because the TDS rate is 10% versus 2%.

Be careful with the threshold: it's aggregate per financial year, not per invoice. If you're paid ₹40,000 in May and ₹15,000 in October by the same client, the threshold is breached at the second invoice. The client must deduct TDS on the cumulative ₹55,000 — meaning they'll deduct ₹5,500 (10%) from the October payment.

Section 194C — contract work

If your work is more contract-labour than professional advisory, Section 194C may apply instead. Examples: catering services, transport services, advertising production work, manpower supply, courier services. The rates:

• Threshold: ₹30,000 per single contract or ₹1,00,000 aggregate per year
• Individual or HUF supplier: 1% TDS
• Other suppliers (companies, partnerships): 2% TDS
• No PAN: 20% TDS

Whether your particular work falls under 194J or 194C is determined by the nature of services, not what you call your business. A "video producer" providing creative direction would fall under 194J (professional). The same person doing pure camera operation under direction would arguably fall under 194C. The Supreme Court has held that 194C requires a "contract for work" — the deliverable is more important than the process.

GST on top of TDS

If you're GST-registered, your invoice charges GST on the gross amount. TDS is then computed on the amount excluding GST. So a ₹50,000 consulting invoice with 18% GST becomes:

• Taxable value: ₹50,000
• GST 18%: ₹9,000
• Total invoice: ₹59,000
• TDS 10% on ₹50,000: ₹5,000 (deducted by client when paying)
• Net received: ₹59,000 minus ₹5,000 = ₹54,000

The client claims the ₹9,000 GST as input credit and remits ₹5,000 as TDS to the IT department. You receive ₹54,000, claim ₹5,000 TDS credit when filing ITR, and remit your share of the ₹9,000 GST to the GST department after netting input credits on your business expenses.

Form 16A — your TDS certificate

Every quarter, the client issues Form 16A showing the amount paid to you and TDS deducted. Quarters end on 30 June, 30 September, 31 December and 31 March; certificates are issued within 15 days of quarter-end. The certificate shows the BSR code, challan number and date of TDS payment. Keep these — your accountant references them when filing ITR. Better yet, all of this auto-populates in your Form 26AS and AIS on the income tax portal, and most ITR software pulls TDS data directly.

Lower deduction certificate

If your projected annual tax liability is much lower than the standard 10% TDS would imply, apply for a lower deduction certificate under Section 197. You file Form 13 with the assessing officer who issues a certificate specifying a reduced rate (could be as low as 0%) for that financial year. This stops cash flow being tied up unnecessarily until ITR refund. Useful for freelancers in lower tax brackets or those with significant deductible expenses.

Worked example

Consultant invoice, ₹1,00,000 to a corporate client (no GST, professional service):

• Gross fees: ₹1,00,000
• TDS 10% (Section 194J professional): ₹10,000
• Client transfers: ₹90,000
• You claim ₹10,000 TDS credit when filing ITR
• Effective receipt: ₹90,000 in bank, ₹10,000 sitting as TDS credit until ITR season

IT freelancer invoice, ₹1,50,000 with 18% GST (technical service):

• Taxable value: ₹1,50,000
• IGST or CGST+SGST 18%: ₹27,000
• Total invoice: ₹1,77,000
• TDS 2% (Section 194J technical) on ₹1,50,000: ₹3,000
• Client transfers: ₹1,77,000 minus ₹3,000 = ₹1,74,000
• You owe GST ₹27,000 (or net of ITC); you have ₹3,000 TDS credit for ITR

Below threshold scenario, freelance writer billing ₹35,000 in March:

• If this is the first and only invoice to this client this financial year, total is below ₹50,000 — no TDS
• Client transfers full ₹35,000 (plus GST if applicable)
• If a second invoice in May would push the cumulative above ₹50,000, TDS must be deducted on the May invoice for the full cumulative amount, not just the May portion