TDS on Freelance Income: Section 194J vs 194C Explained

TDS (Tax Deducted at Source) is tax your client deducts before paying you. For most Indian freelancers — developers, designers, writers, consultants — Section 194J applies, not 194C. The rate under 194J is 10% (or 2% for technical services). Here is everything you need to know to stay on top of it.

What Exactly Is TDS, and Why Does It Affect Freelancers?

When a registered business or company pays you as a freelancer, they are legally required to deduct a percentage of your fee upfront and deposit it with the Income Tax Department on your behalf. You receive the balance. That deducted amount is called TDS.

It is not an extra tax. It is an advance against your final income tax liability. If too much is deducted, you get a refund when you file your ITR.

Which Section Applies to Your Freelance Work — 194J or 194C?

Section 194J — Professional or Technical Services

• Software developers and IT consultants
• Graphic designers and UI/UX designers
• Content writers, copywriters, and editors
• Management consultants, legal advisors, chartered accountants
• Photographers, videographers, and creative professionals
• Marketing and SEO consultants

Section 194C — Work Contractors

• Printing and publishing jobs
• Advertising agencies fulfilling a production contract
• Transportation or logistics services
• Event management (contractual execution)

TDS Rates and Threshold Limits

Who Is Responsible for Deducting TDS?

TDS is the payer's responsibility, not yours. Your client deducts it before transferring your fee. Not every client deducts TDS. The obligation applies to:

• Companies (public or private)
• Firms and LLPs
• Individuals and HUFs whose business turnover exceeded ₹1 crore (business) or ₹50 lakh (profession) in the preceding financial year

Individual clients — a solo founder paying you person-to-person — generally do not have a TDS deduction obligation. That is why some clients deduct TDS and others don't.

How to Check How Much TDS Has Been Deducted

The place to verify this is Form 26AS — your annual tax statement maintained by the Income Tax Department.

• Log in to the Income Tax e-filing portal
• Go to e-File > Income Tax Returns > View Form 26AS
• You will be redirected to the TRACES portal
• Download the statement for the relevant financial year

Check Part A of Form 26AS. Each entry shows the deductor's name and TAN, the section used (194J or 194C), amount deducted, and whether it has been deposited with the government. If it doesn't appear in 26AS, the client hasn't deposited it yet — you can only claim credit for TDS that appears in 26AS.

How to Claim a TDS Refund When Filing ITR

TDS is an advance tax payment. When you file your ITR, the system calculates your actual tax liability. If TDS deducted exceeds your liability, the excess is refunded.

• Choose the right ITR form. For freelancers with professional income: ITR-3 (if you maintain books) or ITR-4 (Sugam) under the Section 44ADA presumptive scheme.
• Report gross income. Enter the full amount billed to the client — not the net amount received after TDS.
• Pre-fill TDS data. The portal pulls TDS entries directly from Form 26AS. Verify every deduction entry.
• Compute tax. If total TDS > total tax payable, the difference is your refund — credited directly to your bank account.

Form 15G and Form 15H

Form 15G (under 60) and Form 15H (senior citizens) are self-declarations stating your income is below the exemption limit and TDS should not be deducted. Eligibility for Form 15G:

• You are a resident individual
• Your estimated total income for the year is below ₹2.5 lakh
• Tax liability on total income is nil

For most active freelancers, Form 15G will not apply. File your ITR and claim the refund instead.

Form 16A

Form 16A is the TDS certificate issued by your client for non-salary payments — including freelance fees under 194J. Your client must issue it within 15 days of the TDS return due date. It contains the deductor's TAN, your PAN, amount paid, TDS deducted and deposited, and BSR code with challan number.

If a client refuses to issue Form 16A, you can still file using Form 26AS — but Form 16A makes reconciliation cleaner.