You invoiced Rs. 1,00,000. They paid Rs. 90,000. The missing Rs. 10,000 was deducted as TDS — Tax Deducted at Source — and is supposed to have been deposited with the government against your PAN.
TDS is not an extra tax. It is your own income tax, collected early, by someone else. Every rupee of it reduces what you finally owe. The catch is that you can only claim it once your client has told the department it exists — and that is where almost everything that goes wrong, goes wrong.
What TDS is, in one paragraph
The person paying you (the deductor) withholds tax at a prescribed rate before paying, deposits it using a challan, and then files a quarterly return — Form 26Q — reporting the deduction against your PAN. That last step is the one that makes the money yours to claim. Deducting and depositing without filing leaves the tax in the system but not attached to you.
The sections that apply to freelancers
| Section | Applies to | Rate | Threshold |
|---|---|---|---|
| 194J | Professional and technical services — development, design, consulting, legal, accountancy | 10% (professional) / 2% (technical services) | Rs. 50,000 per financial year per deductor (raised from Rs. 30,000 in Budget 2025; effective 1 April 2025). |
| 194C | Work contracts — operational work carried out to a specification | 1% (individual/HUF) / 2% (company, firm, AOP) | Rs. 30,000 per single transaction, or Rs. 1,00,000 aggregate per financial year per deductor. |
| 194-O | Payments through a marketplace — Upwork, Fiverr and similar | 0.1% | Rs. 5,00,000 per financial year per deductee (individual/HUF only; no threshold for other entities). |
| 195 | Payments to non-residents | Varies (10-40%); often reduced under DTAA | No threshold — applicable on the first rupee paid to a non-resident. |
When a deduction should appear in your 26AS
Not when your client deducts. When your client files. Form 26Q filings are due under Rule 31A of the Income Tax Rules, 1962:
| Deduction quarter | Form 26Q due |
|---|---|
| April – June | 31 July |
| July – September | 31 October |
| October – December | 31 January |
| January – March | 31 May |
Deductors tend to file on the deadline rather than ahead of it, and the statement takes a few days more to reflect. A gap of up to five or six months between deduction and appearance is normal and is not a problem: a deduction early in a quarter waits for that quarter’s filing deadline, and Q4 (January–March) is not due until 31 May.
Credit for TDS is given under Section 199 read with Rule 37BA on the basis of the deductor’s statement. Not your invoice, not your bank statement, not their email.
Something is wrong — which one is it?
Most TDS trouble is one of six specific situations, and they have different remedies. Find yours:
- The deduction is not in my 26AS at all — usually timing, sometimes a wrong PAN, occasionally a client who never deposited it.
- My Form 16A and my 26AS disagree — start by checking whether the certificate is a real one; that resolves most of these.
- It was deducted under the wrong section — your credit survives it, but the shortfall can land on you as advance tax.
- The statement shows more income than I earned — usually marketplace gross before commission, GST inside the reported figure, or a duplicate.
- My 44ADA gross receipts do not match the statement — most often the March invoice paid in April, which is legitimate and has a rule for it.
- I have been charged 234B / 234C interest — the predictable consequence of TDS being withheld well below your actual tax rate.
Check yours before you contact anyone
Every remedy above starts the same way: line your statement up against the invoices you actually raised, and see which deductions matched, which are merely pending on the filing calendar, and which have nothing behind them. That distinction decides whether you wait or write.
Free · no login · nothing storedPaste your client list, drop in your statement, and see every deduction sorted into matched, pending, mismatch and unmatched. Parsed in your browser — nothing is uploaded, nothing is saved.Claiming it in your return
The TDS you claim reduces your final liability rupee for rupee, and where it exceeds your liability the balance is refundable. Two rules govern how much you can claim and when:
- How much: what appears against your PAN in the statement. Not what the certificate says, not what you calculate should have been deducted.
- When: under the 1961 rules, Rule 37BA(3) gives credit for the assessment year in which the income is assessable. If a March-credited invoice is your receipt in the following year, the credit belongs there too — the return provides for carrying it forward. When the following year is tax year 2026-27, the claim falls under the Income-tax Act 2025 and its 2026 Rules, so ask your CA to confirm how the carried-forward credit is claimed in that return.
The free checker is a 20-row spot check. HourSlip’s in-app TDS tracker runs the same reconciliation against every invoice you raise, all year, with no row limit — and because it knows the quarter of each deduction, the letters it drafts name the quarters instead of asking the deductor to work them out.