Three situations most of us have been in. You look at a restaurant or shop bill and see CGST 9% and SGST 9% - and wonder if you are being taxed twice. You order something online from another state and the bill says IGST 18% instead. Or you finish a freelance project, invoice ₹1,00,000, and only ₹90,000 arrives - and you wonder where ₹10,000 went.
None of these is a mistake, and none of them is hard. Here is what each tax is, how to tell which one applies, and how to calculate it yourself - with a calculator to check your own numbers.
Updated for 2026. Since 22 September 2025 most goods and services are taxed at 5% or 18% (40% for luxury and harmful goods) - the old 12% and 28% slabs are gone for most items. Since 1 April 2026, TDS follows the new Income-tax Act, 2025. Many older articles still show the old rates.
What each one means, in plain words
| On your bill | What it is |
|---|---|
| GST | The tax on what you buy. It is one tax - the others below are just how it is split. |
| CGST + SGST | GST split into two equal halves, when the seller and buyer are in the same state. Half goes to the Centre, half to the State. |
| IGST | The same GST as one single amount, when the seller and buyer are in different states. |
| TDS | Not GST. Income tax that a client, employer or bank keeps from a payment to you and deposits in your name. |
Remember: CGST 9% + SGST 9% is not double tax. It is one 18% GST, split in half.
Why your bill shows one and not the other
It depends on just one thing: are the seller and the buyer in the same state? GST is split between the Centre and the States, and the state where the item is used gets the state share. So:
| Seller | Buyer | Your bill shows |
|---|---|---|
| Shop in Delhi | You, in Delhi | CGST + SGST |
| Online seller in Delhi | You, in Mumbai | IGST |
| Restaurant in Pune | You, eating there | CGST + SGST - you consumed it in Maharashtra |
| Company in Bengaluru | Your company in Chennai | IGST |
| Anything imported | You, anywhere in India | IGST |
A quick way to check on any bill: a GST number (GSTIN) starts with a two-digit state code. If the seller's code matches the state of delivery, expect CGST + SGST; if it does not, expect IGST.
| GSTIN starts with | State |
|---|---|
| 07 | Delhi |
| 09 | Uttar Pradesh |
| 24 | Gujarat |
| 27 | Maharashtra |
| 29 | Karnataka |
| 33 | Tamil Nadu |
| 36 | Telangana |
And TDS exists so that income tax is collected while you earn, not all at once at the end of the year. It is not an extra tax - it is part of your own income tax, paid early.
How to calculate GST on a price
When the price is before GST - the way most business quotes and invoices are written:
GST = Price × Rate ÷ 100
Total = Price + GST
CGST = SGST = GST ÷ 2 (same state)
IGST = GST (different states)Ravi's shop in Delhi sells a laptop bag for ₹10,000 + 18% GST:
| Customer in Delhi | Customer in Mumbai | |
|---|---|---|
| Price | ₹10,000 | ₹10,000 |
| GST at 18% | ₹1,800 | ₹1,800 |
| On the bill | CGST ₹900 + SGST ₹900 | IGST ₹1,800 |
| Customer pays | ₹11,800 | ₹11,800 |
How to find the GST inside an MRP
In a shop, the MRP or the price on the tag already includes GST. To find how much of it is tax, do not take 18% of the MRP - that gives the wrong answer. Use this instead:
GST = MRP × Rate ÷ (100 + Rate)
Price = MRP − GSTA shirt with an MRP of ₹1,180 at 18%: GST = 1,180 × 18 ÷ 118 = ₹180, and the price before tax is ₹1,000. Taking 18% of ₹1,180 would give ₹212.40 - wrong by ₹32.40.
GST calculator
Put in any price and see exactly what the bill will show.
Which rate applies
| Rate | Examples (since 22 September 2025) |
|---|---|
| 0% | Many fresh and staple foods |
| 5% | Many packaged foods, hotel rooms up to ₹7,500 a night, gym, salon and yoga |
| 18% | Most things: electronics, TVs and ACs, small cars and two-wheelers, most services, software and freelance work |
| 40% | Pan masala and tobacco, aerated drinks, big cars, bikes over 350cc, betting and online money games |
| 3% | Gold, silver and jewellery |
What that means in real money: a ₹2,000 a month gym membership carried ₹360 GST at the old 18%. At 5% it carries ₹100 - ₹3,120 less GST a year.
Rates are fixed item by item. For a business decision, confirm the rate for your exact product or service on the CBIC website or with a CA.
If you run a shop: you only pay GST on what you add
Ravi bought that bag from a manufacturer for ₹6,000 + ₹1,080 GST. When he sells it he collects ₹1,800 GST - but he only sends the difference to the government. This is called input tax credit.
| Amount | |
|---|---|
| GST Ravi collected from his customer | ₹1,800 |
| GST Ravi paid when he bought the bag | − ₹1,080 |
| GST Ravi pays the government | ₹720 |
How TDS is calculated - the "missing ₹10,000"
Priya is a freelance developer. She invoices a company ₹1,00,000 + 18% GST. The company must deduct 10% TDS on professional fees - on the fee only, not on the GST.
TDS = Fee (before GST) × TDS rate
You receive = Fee + GST − TDS| Line | Amount |
|---|---|
| Fee | ₹1,00,000 |
| GST 18% | + ₹18,000 |
| Invoice total | ₹1,18,000 |
| TDS 10% of ₹1,00,000 | − ₹10,000 |
| Priya receives | ₹1,08,000 |
If Priya is not registered for GST - most freelancers earning under ₹20 lakh a year are not - her invoice is just ₹1,00,000 and she receives ₹90,000. That is the "missing ₹10,000" most first-time freelancers ask about.
The TDS rates you are most likely to meet
| Payment to you | TDS | Only if more than |
|---|---|---|
| Freelance or professional fees | 10% | ₹50,000 in a year from that client |
| Technical services | 2% | ₹50,000 in a year |
| Rent from a business tenant | 10% | ₹50,000 a month |
| Rent from an individual tenant | 2% | ₹50,000 a month |
| Fixed deposit interest | 10% | ₹50,000 in a year (₹1,00,000 for senior citizens) |
| Salary | Your tax slab | Your expected tax for the year |
| Any of these, if you have not given your PAN | Higher - often 20% | - |
How to get your TDS back
- Log in to the income tax e-filing portal and open your AIS or Form 26AS. Every TDS deducted against your PAN is listed, with who deducted it.
- Check that each amount matches what your clients, bank or employer told you.
- File your income tax return. The TDS is subtracted from the tax you owe for the year.
- If the TDS is more than your tax, the difference is refunded to your bank account.
If your total income is below the taxable limit, you can give your bank Form 15G (or 15H if you are 60 or older) so it does not deduct TDS on your interest in the first place.
The short version
GST is the tax on what you buy - mostly 5% or 18% since September 2025. In the same state it appears as CGST + SGST, two equal halves; across states as one IGST; and the total is the same either way. To calculate it, price × rate ÷ 100; to find it inside an MRP, MRP × rate ÷ (100 + rate). TDS is income tax kept back from a payment to you - fee × TDS rate, usually 10% for freelancers - and you get it back against your tax when you file your return.
- Not double taxCGST + SGST = one GST, split in half.
- Same state?CGST + SGST. Different states? IGST.
- On a priceGST = price × rate ÷ 100.
- Inside an MRPGST = MRP × rate ÷ (100 + rate).
- TDS on feesFee before GST × 10%.
- TDS is yoursCheck AIS, claim it in your return.
Questions people ask
Am I paying double tax when the bill shows CGST and SGST?
No. CGST and SGST are two halves of one GST. At 18%, you pay 9% + 9% = 18%, the same as one IGST of 18%.
How do I calculate GST from an MRP?
GST = MRP × rate ÷ (100 + rate). For ₹1,180 at 18%, that is 1,180 × 18 ÷ 118 = ₹180.
What are the GST rates in 2026?
Mainly 5% and 18%, with 0% for many essentials, 40% for luxury and harmful goods, and 3% on gold and silver. This has applied since 22 September 2025.
Is TDS deducted on the GST amount?
No, when GST is shown separately on the invoice. TDS is worked out on the amount before GST.
Why did my client pay me less than my invoice?
They deducted TDS, usually 10% of your fee, and deposited it against your PAN. You can see it in your AIS and claim it when you file your return.
Is TDS an extra tax?
No. It is part of your own income tax, collected early, and refunded if it is more than the tax you owe.
When do I need to register for GST?
Usually once turnover crosses ₹40 lakh a year for goods or ₹20 lakh for services (lower in a few special-category states). Sellers on e-commerce platforms must register from the start.
This article is for education, not tax advice. Rates, limits and rules change - check the CBIC and Income Tax Department websites, or ask a chartered accountant, before making a decision.
Educational only. This article explains how things work. It is not investment, tax, legal or career advice, and it is not a recommendation to buy or sell anything. What suits you depends on your own situation - check with a qualified adviser before acting on money decisions.