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TDS under GST and TDS on the GST Amount
"TDS on GST" can mean two things. Under GST law, government departments, local authorities and notified public bodies deduct 2% TDS from payments to suppliers when a contract exceeds ₹2.5 lakh (Section 51 of the CGST Act). Under income tax, TDS on a bill is deducted on the amount excluding GST when GST is shown separately.
Quick answer (FY 2025-26 and FY 2026-27)
- TDS rate
- 2% (1% CGST + 1% SGST, or 2% IGST)
- Threshold
- Contract value above ₹2.5 lakh (excluding GST)
TDS on gst (tds under gst): rate chart
| Payment | Section (1961 Act) | New section (2025 Act) | Rate | Threshold |
|---|---|---|---|---|
| Payment by a government department, local authority, government agency or notified PSU to a supplier, intra-State | CGST Act s. 51 | Unchanged (GST law) | 1% CGST + 1% SGST | Contract above ₹2.5 lakh |
| Same, inter-State supply | CGST Act s. 51 | Unchanged (GST law) | 2% IGST | Contract above ₹2.5 lakh |
| Income-tax TDS on an invoice with GST shown separately | CBDT Circular 23/2017 | 393 table | Section rate on value excluding GST | As per the section |
How TDS under GST works
The deductor deducts 2% of the taxable value (excluding GST) from the payment, deposits it by the 10th of the next month and files GSTR-7. The supplier accepts the entry on the GST portal, and the amount is credited to their electronic cash ledger for paying GST.
No TDS is deducted when the supplier's location and the place of supply are in one State and the recipient is in another. Late deposit attracts 18% interest, and a late GSTR-7 attracts a late fee.
Is income-tax TDS deducted on the GST amount?
No, where GST is indicated separately in the agreement or invoice. CBDT Circular No. 23/2017 says TDS under sections such as 194C, 194H, 194I and 194J is on the amount excluding GST. If GST is not shown separately, TDS is on the full amount.
TDS on gst (tds under gst) calculator
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GST TDS is not linked to PAN; the PAN option does not change it.
Frequently Asked Questions
What is the TDS rate under GST?
Who deducts TDS under GST?
What is the threshold for TDS under GST?
Which return is filed for GST TDS?
Is income-tax TDS deducted on GST?
How does a supplier use the GST TDS credit?
What is the due date for depositing TDS under GST?
What is the interest for late deposit of GST TDS?
Do private companies deduct TDS under GST?
Is TDS under GST deducted on exempt supplies?
New section references are to the Income-tax Act, 2025, in force from 1 April 2026. Verify the table serial number against the official text before quoting it in a return or notice reply.