TDS for Freelancers in India: Why Your Client Paid 10% Less, and How to Get It Back

You sent an Indian client an invoice for ₹40,000. Only ₹36,000 reached your bank.

The missing ₹4,000 isn't a mistake. It's TDS (tax deducted at source). Your client kept 10% and paid it to the government as income tax on your behalf.

That money is still yours. You get it back when you file your income tax return, either as a lower tax bill or as a TDS refund. But only if it was recorded against your name correctly.

This guide covers TDS for freelancers in India in plain language: the rate, the limit, the new 2026 form names, and how to get your money back.

Not tax advice. A simple explainer for freelancers and small business owners. Check your own situation with your CA.

TDS for freelancers: the short version

• TDS rate: Indian clients usually cut 10% from professional fees. Some cut 2% for technical work.
• TDS limit: if one client pays you ₹50,000 or less in a year, they don't have to cut anything.
• Foreign clients don't cut Indian TDS.
• New names from April 2026: Section 194J is now Section 393, Form 16A is now Form 131, and Form 26AS is now Form 168. The rules are the same.
• Next TDS certificate: due by 15 November 2026 for July–September.
• Getting it back: file your income tax return. TDS counts as tax already paid.

What is TDS on freelance income?

When an Indian business pays you for professional work, the law asks them to keep a small part of the payment and pay it to the income tax department in your name. That part is TDS.

It isn't an extra tax. It's an advance payment of your income tax. At the end of the year, your total tax is worked out, the TDS is subtracted, and you pay only the difference. If TDS was more than your tax, you get a refund.

TDS rate on professional fees: 10% or 2%?

Your client decides which rate applies, not you. Some clients treat software development or IT support as technical work and cut 2%.

Either way, it's your tax paid early. The rate changes how much cash you get now, not how much tax you owe for the year. Don't raise or lower your invoice to make up for it.

TDS limit for freelancers: when no TDS is cut

If a single client pays you ₹50,000 or less for professional or technical work in a year, they don't have to deduct TDS. Once the year's total goes over that, expect 10% to come off. Many clients cut TDS from the very first invoice if they expect to cross the limit.

The limit is per client. Five clients paying you ₹40,000 each don't add up to one limit.

Section 194J is now Section 393: what changed in 2026

India's new income tax law, the Income-tax Act, 2025, started on 1 April 2026. For TDS, it mostly renamed things:

The rate and the limit for freelancers are the same as before. If a client or your CA mentions any of these, they're talking about the same thing.

A simple example

Ananya is a freelance copywriter. A Mumbai agency pays her ₹40,000 a month.

When she files her tax return, she shows ₹1,20,000 as income, not ₹1,08,000. The ₹12,000 counts as tax she has already paid.

Her client wasn't being stingy, and she wasn't underpaid. She just paid some of her tax early.

How to check your TDS in Form 168 (earlier Form 26AS)

Log in to the income tax e-filing website and open Form 168. It's a statement the tax department fills in for you. You don't submit anything.

For each Indian client who cut TDS, check that:

• The client's name is there.
• The amount cut matches the gap between your invoice and what reached your bank.

Clients have until 31 October to report July–September. Check again in November, after they've filed. If a client is missing, email them with the invoice numbers and amounts. Usually they made a typo in your PAN or haven't filed yet.

TDS cut before April 2026 still sits in the old Form 26AS, and you claim it in last year's return. If an invoice from March was paid in April, ask your CA which year it belongs to.

Form 131 (earlier Form 16A): your TDS certificate

Form 131 is the TDS certificate your client gives you. It's proof of what they cut and paid in your name. Clients download it from the tax department's system, so a certificate typed up in Excel doesn't count.

If it doesn't arrive, ask for it. Keep it with your invoices for tax time. Put the four dates in your calendar once and you won't need to think about it again.

Put your PAN on every invoice

TDS is tracked by your PAN. If your client doesn't have it, they cut more tax and it may never show up under your name.

If you're GST-registered, your PAN is already inside your GSTIN (characters 3 to 12). If you're not, write your PAN on the invoice. Here's what goes on an invoice without GST, and here's when a freelancer needs GST registration.

How to claim a TDS refund as a freelancer

There's no separate form for a TDS refund. You get it by filing your income tax return:

1. 1.Check Form 168 and make sure every client's TDS is there.
2. 2.Show your full income (the invoice amounts, not what reached your bank).
3. 3.The return subtracts your TDS from the tax you owe.
4. 4.If TDS is more than your tax, the difference comes back to your bank account as a refund.
5. 5.E-verify your return after filing. An unverified return isn't complete.

If your income is low, or you have expenses to set off, much of your TDS can come back as a refund. Missing TDS in Form 168 is the most common reason a refund comes out smaller than it should.

Foreign clients don't cut TDS

A client in the US, UK or Europe pays you the full amount. That feels nice, but nobody is paying tax on that income for you. Set some aside for advance tax. Your first foreign payment explains what else to know, and invoicing foreign clients in USD covers the invoice itself.

Keep it simple: a 10-minute quarterly check

Once a quarter, put three numbers side by side: what you invoiced, what reached your bank, and what Form 168 shows. If they add up, you're done.

Mavoin keeps all your invoices in one list, shows what's paid and what's still outstanding in ₹, and exports everything to a spreadsheet (CSV). Add a TDS column next to it and the quarterly check takes ten minutes. GST invoices and foreign-currency invoices for ₹199/month, 30-day free trial, no card needed.

Start your 30-day trial, or make your next invoice with the free GST invoice generator.

Mavoin is not a Chartered Accountant service. Verify TDS rates, limits and due dates with your CA.