What is TDS?
Tax Deducted at Source (TDS) is a mechanism under Indian tax law through which businesses deposit a percentage of certain payments directly with the government.
For Spur’s SaaS services, the applicable TDS rate is **2% under Section 194J(a)** for technical services.
What TDS rate applies to Spur?
Category | Section | TDS Rate | Applies to Spur? |
Technical Services | 194J(a) | 2% | ✅ Yes |
Professional Services | 194J(b) | 10% | ❌ No |
Spur is a packaged Software as a Service platform and is classified as a technical service. Therefore, the applicable TDS rate is **2%, not 10%**.
When does TDS apply?
From 1 April 2025, TDS applies when your total payments to Spur exceed ₹50,000 in a financial year.
The ₹50,000 threshold is calculated on Spur’s charges before GST, across all invoices in the same financial year.
This process is available to all Spur customers, irrespective of their subscription plan or billing frequency. If your payments exceed the applicable threshold, deducting and depositing TDS is your legal obligation.
Please consult your Chartered Accountant to confirm how TDS applies to your business and when the threshold is crossed.
How TDS works with Spur’s billing system
Spur uses Stripe for billing. Stripe does not automatically support TDS deductions on recurring payments, so the process is handled as follows:
1. Pay 100% of the invoice amount, including GST, through Stripe.
2. Calculate TDS at 2% on Spur’s charges before GST.
3. Deposit the TDS with the government and file Form 26Q.
4. Email Form 16A, your bank details, and a cancelled cheque to `[email protected]`.
5. After verification, Spur refunds the eligible TDS amount by bank transfer.
Spur does not issue credit notes or adjust future invoices for TDS.
Step-by-step process
Step 1: Pay the full invoice amount through Stripe
Pay 100% of the invoice amount, including GST, through Stripe.
Example:
- Spur charges before GST: ₹10,000
- GST at 18%: ₹1,800
- Total paid through Stripe: ₹11,800
Step 2: Calculate TDS at 2%
Calculate TDS only on Spur’s charges before GST.
Formula:
`TDS = Amount before GST × 2%`
For a charge of ₹10,000:
`₹10,000 × 2% = ₹200`
Do not calculate TDS on the ₹1,800 GST component.
Step 3: Deposit TDS with the government
Deposit the TDS with the government and report it through **Form 26Q** for the relevant quarter.
Use the correct section code, **194J**, when filing.
If you need Spur’s PAN or other information required for filing, email `[email protected]`.
Step 4: Send the required documents to Spur
Within 15 days of depositing the TDS, email the following to `[email protected]`:
- Invoice number or numbers
- TDS amount deposited
- TDS payment date
- Challan details
- Form 16A
- Bank account details
- A cancelled cheque for the same bank account
Suggested subject line:
`TDS Certificate Submission – [Business name] – [Financial year and quarter]`
Step 5: Spur verifies the submission
Spur verifies the Form 16A and TDS details against the relevant government records.
A refund cannot be processed without Form 16A. Sending a challan or payment confirmation alone is insufficient.
Spur may contact you if the submitted details, bank information, or certificate do not match.
Step 6: Spur refunds the amount by bank transfer
Once the submission is verified, Spur refunds the eligible TDS amount to the bank account provided.
Refunds are always made by **bank transfer**. Spur does not issue credit notes or deduct the amount from a future invoice.
Example
Assume a customer pays ₹10,000 before GST every month.
Description | Amount |
Spur charges per month | ₹10,000 |
Cumulative charges after six months | ₹60,000 |
GST at 18% | ₹10,800 |
Total paid to Spur through Stripe | ₹70,800 |
TDS at 2% on ₹60,000 | ₹1,200 |
Refund from Spur by bank transfe | ₹1,200 |
Adjustment to the next invoice | None |
The customer pays all six invoices in full through Stripe. Because the cumulative pre-GST charges exceed the ₹50,000 financial-year threshold, the customer deposits the applicable TDS, files Form 26Q, and sends Form 16A, bank details, and a cancelled cheque to Spur.
After verification, Spur refunds ₹1,200 by bank transfer. The customer’s next invoice remains unchanged.
Refund timelines
Refund timelines are measured from the end of the quarter in which the relevant invoices were paid:
- April–June, July–September, and October–December: within 30 days after the end of the quarter
- January–March: within 60 days after the end of the quarter
These timelines require Spur to receive a valid Form 16A and the requested bank documents. **No Form 16A means no refund.**
Why does Spur use this process?
Stripe’s recurring billing system does not support automatic TDS deductions. Paying the invoice in full and refunding verified TDS separately allows:
- Your Stripe billing cycle to continue without disruption
- Your business to complete its TDS obligations
- Spur to reconcile the deposited TDS
- The verified amount to be returned directly to your bank account
Important points
- The applicable TDS rate is **2% under Section 194J(a)**.
- The threshold is **₹50,000 per financial year**, effective from 1 April 2025.
- The threshold applies to cumulative charges before GST.
- The process is open to customers on every subscription plan.
- Pay 100% of each invoice through Stripe.
- Calculate TDS on Spur’s charges before GST, not on GST.
- File the TDS through Form 26Q.
- Send Form 16A to `[email protected]` within 15 days of depositing TDS.
- Include your bank details and a cancelled cheque.
- Refunds are made only by bank transfer.
- Spur does not issue TDS credit notes or reduce future invoices.
- Without Form 16A, Spur cannot issue a refund.
- Keep copies of all certificates, challans, and correspondence for reconciliation and audits.
Frequently asked questions
Is TDS available only to annual-plan customers?
No. The process is open to all Spur customers, irrespective of their plan or billing frequency.
Is TDS applicable to every Spur invoice?
TDS applies when your cumulative payments to Spur exceed ₹50,000 before GST in a financial year. Consult your CA to confirm the timing and treatment for your business.
Can I reduce the amount paid through Stripe?
No. Pay the complete invoice amount through Stripe and handle the TDS deposit separately.
oes TDS apply to GST?
No. Calculate TDS only on Spur’s charges before GST.
For example:
- Charges before GST: ₹10,000
- GST: ₹1,800
- Total invoice: ₹11,800
- TDS: 2% of ₹10,000 = ₹200
What happens if I deduct TDS at 10%?
Spur’s SaaS service falls under technical services at a 2% rate. Applying 10% may create reconciliation issues. Please share this guide with your CA or contact `[email protected]` if formal documentation is required.
Do I need to send Form 16A?
Yes. Form 16A is mandatory for verification. Spur cannot refund the TDS amount without it.
Do I need to provide bank details?
Yes. Send your bank details and a cancelled cheque with Form 16A. The refund will be transferred to the verified bank account.
Will Spur issue a credit note?
No. TDS refunds are always made by bank transfer. They are not issued as credit notes or adjusted against future invoices.
How long does a refund take?
Refunds are processed within 30 days after quarter-end, except for the January–March quarter, for which the timeline is 60 days after quarter-end. A valid Form 16A and complete bank documents are required.
What if I forget to deposit TDS?
You may still be required to deposit it, file the relevant return, and pay any applicable interest or penalties. Consult your CA immediately.
Does the process change if I pay by card?
No. Pay the full amount through Stripe, deposit the applicable TDS separately, and submit the required documents to Spur.
How can I obtain Spur’s PAN?
Email `[email protected]` and request the information required for your TDS filing.
## Need help?
For TDS certificates, payment reconciliation, Spur’s PAN, or other questions, email `[email protected]`.