Here is a comprehensive TDS rate chart for FY 2025-26 (AY 2026-27), covering various payments and applicable sections under the Income Tax Act.
Understanding TDS: Tax Deducted at Source
Tax Deducted at Source (TDS) is an essential system used by the Indian government to collect taxes right at the origin of income. Instead of waiting for individuals or businesses to pay tax at the end of the financial year, the tax is collected in parts throughout the year at the time of making specific payments.
Whenever certain types of payments are made, such as salary, rent, interest, professional fees, or commission, the person making the payment (called the deductor) is required to deduct a specified percentage of tax and deposit it with the government. The person receiving the payment is known as the deductee.
What is TDS in Simple Terms?
TDS is a “pay-as-you-earn” system that helps ensure regular tax collection and reduces tax evasion. Here’s how it works:
- The person who pays (payer or deductor) deducts tax before making the payment.
- The person who receives the income (payee or deductee) receives the net amount (after tax).
- The deducted tax is then deposited with the government.
- TDS is deducted at different rates depending on:
- The type of payment (e.g., salary vs. rent),
- The residential status of the recipient (resident or non-resident),
- And whether PAN/Aadhaar is available.
Key Responsibilities Related to TDS
- Deduct TDS at the correct rate for applicable transactions.
- Deposit the TDS with the government within the specified due dates.
- File TDS returns (quarterly) on time.
- Issue TDS certificates (such as Form 16 or Form 16A) to deductees.
Key Threshold Changes in TDS Provisions – Effective from 1st April 2025
The Finance Act has revised various TDS t193hresholds to ease compliance and improve fairness. Here’s a comparison of the TDS applicability before and after 1st April 2025:
| Section | Nature of PSayment |
TDS Threshold (Until 31st March 2025) | TDS Threshold (From 1st April 2025) |
| 193 | Interest on securities | No threshold | ₹ 10,000 per financial year |
| 194A | Interest (other than securities) | – ₹ 50,000 for senior citizens – ₹ 40,000 for others (when paid by bank, co-op society, or post office) – ₹ 5,000 in all other cases |
– ₹ 1,00,000 for senior citizens – ₹ 50,000 for others (bank, co-op society, or post office) – ₹ 10,000 in other cases |
| 194 | Dividend income to individual shareholders | ₹ 5,000 | ₹ 10,000 |
| 194K | Income from mutual fund units | ₹ 5,000 | ₹ 10,000 |
| 194B | Lottery & crossword winnings | Aggregate winnings exceeding ₹ 10,000 in a financial year | ₹ 10,000 per transaction |
| 194BB | Winnings from horse races | Aggregate winnings exceeding ₹ 10,000 in a financial year | ₹ 10,000 per transaction |
| 194D | Insurance commission | ₹ 15,000 | ₹ 20,000 |
| 194G | Lottery ticket commission/prize income | ₹ 15,000 | ₹ 20,000 |
| 194H | Commission or brokerage | ₹ 15,000 | ₹ 20,000 |
| 194-I | Rent payments | ₹ 2,40,000 per year | ₹ 50,000 per month |
| 194J | Professional or technical service fees | ₹ 30,000 | ₹ 50,000 |
| 194LA | Enhanced compensation on compulsory acquisition of land | ₹ 2,50,000 | ₹ 5,00,000 |
You may also like to read TDS Rate Chart for FY 2024-25
TDS Rate Chart for Residents (FY 2025–26, AY 2026–27)
| Section | Nature of Transaction | Threshold Limit (₹) | TDS Rate |
|---|---|---|---|
| 192 | Salary | Basic exemption limit of individual | Normal Slab Rates |
| 192A | Premature withdrawal from EPF | ₹50,000 | 10% (with PAN), 20% (without PAN) |
| 193 | Interest on Securities: – Debentures – 8%/7.75% Savings Bonds – Other securities |
₹5,000 |
10% |
| 194 | Dividend payment | ₹10,000 | 10% |
| 194A | Interest (from banks, co-op societies, or post office): – Senior Citizens – Others |
₹1,00,000 (Sr) |
10% |
| 194B | Lottery, crossword puzzle, card games | ₹10,000 per transaction | 30% |
| 194BA | Online gaming winnings | No threshold | 30% |
| 194BB | Horse race winnings | ₹10,000 (aggregate/year) | 30% |
| 194C | Contractor/Sub-contractor payments: – Single payment – Aggregate during FY |
₹30,000 |
1% (Individual/HUF) 2% (Others) |
| 194D | Insurance commission | ₹20,000 | 2% |
| 194DA | Life insurance maturity proceeds (non-exempt) | ₹1,00,000 | 2% |
| 194EE | Withdrawal from NSS | ₹2,500 | 10% |
| 194G | Commission on lottery ticket sales | ₹20,000 | 2% |
| 194H | Commission or brokerage | ₹20,000 | 2% |
| 194-I | Rent (by business entities): – Plant & Machinery – Land/Building/Furniture |
₹50,000/month | 2% 10% |
| 194-IA | Transfer of immovable property (except agricultural land) | ₹50,00,000 | 1% |
| 194-IB | Rent by individuals/HUFs (not under 194-I) | ₹50,000/month | 2% |
| 194-IC | Payment under Joint Development Agreements (JDAs) | No limit | 10% |
| 194J | Fees for: – Professional services – Director remuneration/fee/commission – Non-compete payments – Know-how/royalty rights – Technical services – Film royalty – Call center technical services |
₹50,000 for each category | 10% (all except below) 2% for: Technical services, film royalty, call center services |
| 194K | Mutual fund income (e.g., dividend) | ₹10,000 | 10% |
| 194LA | Compensation on land/building acquisition | ₹5,00,000 | 10% |
| 194LBA(1) | Distribution of certain income by business trust to unit holders | No limit | 10% |
| 194LBA(2) | Distribution of: – Interest from SPV – Dividend from SPV (excluding govt holding) |
No limit | 5% (Interest) 10% (Dividend) |
| 194LBA(3) | Rental income from business trust to unit holders | No limit | 30% |
| 194LBB | Income from investment fund (other than capital gains) | No limit | 10% |
| 194LBC | Income from securitisation trust | No limit | 10% |
| 194M | Certain payments by Individual/HUF not covered under 194C, 194H, or 194J | ₹50,00,000 | 2% |
TDS Rate Chart – For Domestic Company
The following are the applicable TDS rates when payments are made to Domestic Companies.
| Section | Particulars | Threshold Limit | TDS Rate |
|---|---|---|---|
| 193 | Interest on securities: a) Central/State Govt security b) Listed debentures c) Other securities |
₹5,000 / ₹10,000 | 10% |
| 194 | Payment of any dividend | ₹10,000 | 10% |
| 194A | Interest (other than securities): Senior Citizens Others |
₹1,00,000 / ₹50,000 | 10% |
| 194B | Lottery, games, crossword etc. | ₹10,000 per transaction | 30% |
| 194BB | Horse race winnings | ₹10,000 aggregate/year | 30% |
| 194C | Payment to contractor/sub-contractor a) Individual/HUF |
₹30,000 (single)/ ₹1,00,000 (annual) | 1% |
| b) Others | — | 2% | |
| 194D | Insurance commission | ₹20,000 | 10% |
| 194DA | Life insurance maturity (on income portion) | ₹1,00,000 | 2% |
| 194H | Commission or brokerage | ₹20,000 | 2% |
| 194-I | Rent: a) Plant and Machinery – 2% b) Land/Building/Furniture – 10% |
₹50,000 per month | 2% / 10% |
| 194-IA | Transfer of immovable property (non-agri) | ₹50 lakhs | 1% |
| 194J | Professional services / technical fees / royalty / directors | ₹50,000 | 2% / 10% |
| 194K | Income from mutual funds | ₹10,000 | 10% |
| 194LA | Compensation on property acquisition | ₹5 lakhs | 10% |
| 194M | Payments by Individual/HUF not under 194C/194H/194J | ₹50 lakhs | 2% |
| 194N | Cash withdrawal exceeding limit: Normal – 2% Non-filers (₹20L–₹1Cr) – 2% Above ₹1Cr – 5% |
₹1 Cr (₹3 Cr for co-op society) | 2% / 5% |
TDS Rate Schedule – Applicable to Foreign Companies
TDS is deducted irrespective of the amount paid to foreign companies (unless specific exemptions apply).
| Section | Description of Payment | TDS Rate |
|---|---|---|
| 194B | Lottery, card games, crossword puzzles (No TDS up to ₹10,000 per transaction) | 30% |
| 194BB | Horse race winnings (No TDS up to ₹10,000 per transaction) | 30% |
| 194E | Non-resident sportsmen/entertainers/associations | 20% |
| 194G | Commission on lottery ticket sales (No TDS up to ₹20,000) | 2% |
| 194LB | Payment in respect of compensation on acqisition of certain immovable property | 5% |
| 194LBA(3) | Interest income received or receivable to a business trust from SPV and distribution to its unitholders. | 5% |
| Dividend income received from SPV by a business trust, in which it holds the entire share capital other than required to be held by the government or government body, and distribution to its unitholders. | 10% | |
| Payment in the nature of income in the nature of rental income, out of real estate assets owned directly by such business trust, to unitholders. | 40% | |
| 194LBB | Payment of certain income by an investment fund to a unitholder. | 40% |
| 194LBC | Income from investment in securitization fund. | 40% |
| 194LC | Payment of interest on loans raised in foreign currency by Indian entities or business trusts via loan agreements or long-term bonds. | 5% |
| Interest payments on long-term bonds listed at a recognized IFSC (International Financial Services Centre) stock exchange. | 4% | |
| 194LD | Interest payments on INR-denominated bonds to Qualified or Foreign Institutional Investors. | 5% |
| 195 | Payment of any other sum, such as-Income by way of LTCG under section 112(1)(c)(iii); | 12.5% |
| Income by way of LTCG under section 112A; | 12.5% | |
| Income by way of STCG under section 111A; | 20% | |
| Any other income by way of LTCG; | 12.5% | |
| Interest Payable on overseas borrowings made by the government or an Indian Company in Foreign Currency. | 20% | |
| Income by way of royalty | 20% | |
| Income from technical fees to the Indian concern by government or Indian concern in pursuance of an agreement on matters related to industrial policy. | 20% | |
| Any other income. | 35% | |
| 196B | Income from units of an offshore fund. | 10% |
| Long-term Capital Gain on transfer of units an offshore fund. | 12.5% | |
| 196C | Income from foreign currency bonds or GDR of an Indian company | 10% |
| LTCG foreign currency bonds or GDR of an Indian company | 12.5% | |
| 196D | Income (excluding dividend and capital gain) from Foreign Institutional Investors. | 20% |
TDS Compliance: Payment & Return Filing
TDS Deduction & Payment Guidelines
Every deductor is required to deduct tax at source (TDS) accurately and ensure timely remittance of the same to the government. Non-compliance may lead to financial penalties and interest.
- TDS must be deducted at the time of credit to the payee’s account or on actual payment, whichever occurs first, for most transactions.
- The deducted amount must be deposited with the government by the 7th of the following month.
- An exception applies to TDS deducted in March, which must be paid by 30th April.
- Late deduction of TDS attracts interest at 1% per month (or part thereof).
- Late payment of deducted TDS incurs interest at 1.5% per month (or part thereof).
Filing of TDS Returns
Deductors are also required to file quarterly TDS statements providing information such as the deductee’s PAN, section under which TDS was deducted, TDS amount, rate, and transaction details.
- In case of property transactions, Form 26QB must be filed within 30 days from the end of the month in which TDS was deducted.
- For regular TDS filings:
- Returns for each quarter are due by the end of the following month, except:
- For the January to March quarter, the due date is 31st May.
- Failure to file TDS returns may attract penalties under Section 271H, at the discretion of the assessing officer.
Conclusion
Stay updated, stay compliant!
Being aware of the latest TDS rates and threshold limits is essential to ensure correct deductions. With several revisions introduced in Budget 2025, keeping yourself informed helps avoid unnecessary deductions on transactions that may now fall below the revised limits. Smart tax compliance today lays the foundation for efficient tax planning and potential savings in the future.
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