Complete TDS Rate Chart Guide for FY 2025-26: Everything You Need to Know

Understanding the TDS Rate Chart is essential for every taxpayer and business in India. The Tax Deducted at Source (TDS) system ensures that income tax is collected at the point of income generation itself. Moreover, the TDS Rate Chart for FY 2025-26 has undergone significant changes that affect millions of taxpayers.

Did You Know?

TDS contributes to nearly 35% of India’s total direct tax collection, making it one of the most crucial revenue mechanisms for the government. Additionally, over 2 crore TDS certificates are issued annually across various income categories.

The government has revised several threshold limits and rates in the latest TDS Rate Chart. Furthermore, these changes aim to reduce compliance burden while ensuring better tax collection efficiency.

Key Changes in TDS Rates for FY 2025-26

The Budget 2025 introduced several important modifications to the TDS Rate Chart. Consequently, taxpayers must understand these changes to ensure proper compliance.

Section	Nature of Payment	Previous Threshold	New Threshold	Previous Rate	New Rate	Effective Date
194A	Interest	₹40,000	₹50,000	10%	10%	April 1, 2025
194I	Rent	₹2,40,000 (annually)	₹50,000 (monthly)	10%	10%	April 1, 2025
194J	Professional Services	₹30,000	₹50,000	10%	10%	April 1, 2025
194H	Commission/Brokerage	₹15,000	₹20,000	5%	2%	October 1, 2024
194T	Partner Payments	N/A	₹20,000	N/A	10%	April 1, 2025
194LBC	Infrastructure Investment Trust	Various	Uniform	Various	10%	April 1, 2025
206AB/206CCA	Higher TDS for Non-filers	Applicable	Omitted	20%/5%	Removed	April 1, 2025

Major TDS Threshold Changes 

1. Section 194A – Interest Payments

Budget 2025 increases TDS thresholds on interest income for various payers and senior citizens, effective April 1, 2025.

Impact:

• Previous Threshold: ₹40,000 annually.
• New Threshold: ₹50,000 annually.
• Rate: Remains 10%.
• Benefit: Individual depositors will face less frequent TDS deductions, improving cash flow.
• Coverage: Applies to interest from banks, cooperative societies, post office deposits.

2. Section 194I – Rent Payments

Section 194-I amendment raises rent TDS threshold to Rs. 50,000 per month, effective April 2025.

Major Change Analysis:

• Previous: ₹2,40,000 annually (₹20,000 per month).
• New: ₹50,000 monthly (₹6,00,000 annually).
• Rate: Continues at 10%.
• Significant Impact: This represents a 150% increase in the annual threshold.
• Practical Effect:
  • Many small property owners will no longer face TDS.
  • Reduced compliance burden for tenants.
  • Better cash flow for the property rental market.

3. Section 194J – Professional Services

Section 194J increases the tax deduction threshold for professional services, technical services, royalty, and sums under section 28 from Rs. 30,000 to Rs. 50,000.

Detailed Impact:

• Previous Threshold: ₹30,000 annually.
• New Threshold: ₹50,000 annually.
• Rate: Maintains 10%.
• Coverage Expansion:
  • Professional fees (CA, lawyers, consultants)
  • Technical services
  • Royalty payments
  • Advertising payments
• Business Benefit: Reduced administrative burden for small service providers.

4. Section 194T – New Introduction

Section 194T was introduced in Budget 2024 to broaden the tax base and enhance compliance among partnership firms and LLPs. This section mandates that TDS be deducted at a rate of 10% on payments made to partners.

New Provision Details:

• Threshold: ₹20,000 annually.
• Rate: 10%.
• Applicability: Partnership firms and LLPs making payments to partners.
• Purpose: Enhanced tax compliance in partnership structures.

TDS Rate Chart for Residents

The TDS Rate Chart for residents forms the backbone of domestic tax deduction. 

Below is the table for various income categories:

Section	Nature of Payment	Threshold Limit (₹)	TDS Rate	Key Details
192	Salary	2,50,000	As per income tax slab rates	Basic exemption limit
192A	EPF/PPF Withdrawal	No threshold	20%	When PAN not furnished
193	Interest on Securities	10,000	10%	Debentures: ₹5,000 limit, Savings Bonds: ₹10,000 limit
194	Dividend	10,000	10%	For individual shareholders
194A	Bank Interest	Bank/Co-op/Post Office: 50,000 (1,00,000 for senior citizens) Others: 10,000	10%	Enhanced limits from April 2025
194B	Lottery/Crossword Winnings	10,000	30%	Per single transaction (not aggregate)
194BB	Horse Race Winnings	10,000	30%	Per single transaction (not aggregate)
194C	Contractor Payments	Individual/HUF: 30,000 Others: 75,000	Individual/HUF: 1% Company: 2%	Rate depends on payee type
194D	Insurance Commission	20,000	5%	Enhanced threshold from ₹15,000
194G	Commission on Lottery Sale	20,000	5%	Enhanced threshold from ₹15,000
194H	Commission/Brokerage	20,000	2%	Rate reduced from 5% to 2% (Oct 2024)
194I	Rent Payment	50,000 (monthly)	10%	Changed from annual ₹2,40,000 to monthly ₹50,000
194IA	Property Purchase	50,00,000	1%	Real estate transactions
194IB	Property Rent	50,000 (monthly)	5%	Separate from 194I
194J	Professional Services	50,000	10%	CA, lawyer, architect, etc.
194J	Technical Services	50,000	2%	Engineering, technical consultancy
194K	Mutual Fund Units	10,000	10%	Enhanced threshold from ₹5,000
194LA	Land Acquisition Compensation	5,00,000	10%	Enhanced threshold from ₹2,50,000
194LBC	Securitization Trust Income	No threshold	10%	Uniform rate for all residents (previously 25%/30%)
194M	Contractor Payment by Individuals	50,00,000	5%	Only for individual/HUF contractors
194N	Cash Withdrawal	1,00,00,000	2%	From bank accounts
194O	E-commerce Transactions	5,00,000	1%	Platform operator to seller
194Q	Purchase of Goods	50,00,000	0.1%	Business purchases
194R	Benefits/Perquisites	20,000	10%	Non-cash benefits
194S	Cryptocurrency	10,000	1%	Virtual digital assets
194T	Partner Payments	20,000	10%	New section effective April 1, 2025

TDS Rate Chart for Non-Residents

Non-residents face different TDS rates under the TDS Rate Chart. Notably, no threshold limits apply to most non-resident payments:

Section	Nature of Payment	Threshold Limit	TDS Rate	Additional Details
192A	Salary to NRI	₹2,50,000	As per income tax slab rates	Only section with threshold limit
193	Interest on Securities	No threshold	10%	Government securities, debentures
194A	Interest (other than securities)	No threshold	20%	Bank deposits, fixed deposits
194B	Lottery/Crossword Winnings	No threshold	30%	All winnings from games of chance
194BB	Horse Race Winnings	No threshold	30%	Winnings from horse racing
194C	Contractor Payments	No threshold	30%	Construction, supply contracts
194D	Insurance Commission	No threshold	20%	All insurance-related commissions
194E	Payments to Non-Residents in Sports	No threshold	20%	Sports personalities, events
194F	Payments on Mutual Fund Units	No threshold	20%	Repurchase of mutual fund units
194G	Commission on Lottery	No threshold	30%	Lottery ticket sales commission
194H	Commission/Brokerage	No threshold	5%	All brokerage and commission payments
194I	Rent to NRI	No threshold	30%	Property rental payments
194J	Professional Services	No threshold	10%	CA, legal, medical, architectural
194J	Technical Services	No threshold	10%	Engineering, IT, consultancy
194K	Mutual Fund Income	No threshold	20%	Dividend, capital gains from MF
194LA	Land Acquisition Compensation	No threshold	20%	Compensation for land acquisition
194LB	Infrastructure Debt Fund	No threshold	5%	Income from IDF units
194LC	Securitisation Trust Income	No threshold	25%	Income from securitization trusts
194LD	Interest on Infrastructure Bonds	No threshold	5%	Interest on notified bonds
194M	Contract Payments by Individuals	No threshold	30%	When individual/HUF is payer
194N	Cash Withdrawals	No threshold	30%	Large cash withdrawals
194O	E-commerce Transactions	No threshold	30%	Platform payments to sellers
195	Other Income to NRI	No threshold	30%	Catch-all provision for unlisted payments

TDS Rate Chart for Domestic Companies (Domestic and Foreign)

The TDS Rate Chart distinguishes between domestic and foreign companies. This distinction ensures appropriate tax treatment based on ClearTax guidelines:

Complete TDS Rate Chart for Domestic Companies

Section	Nature of Payment	Threshold Limit (₹)	TDS Rate
193	Interest on Securities	10,000	10%
194A	Interest other than Securities	5,000	10%
194C	Payments to Contractors	30,000	2%
194D	Insurance Commission	20,000	5%
194G	Commission on Lottery	20,000	5%
194H	Commission/Brokerage	20,000	2%
194I	Rent	50,000 (monthly)	10%
194J	Professional Services	50,000	10%
194J	Technical Services	50,000	2%
194K	Mutual Fund Income	10,000	10%
194LA	Compensation for Land	5,00,000	10%

Complete TDS Rate Chart for Foreign Companies

Section	Nature of Payment	Threshold Limit	TDS Rate
194E	Payment to Non-Resident Sportsmen	NIL	20%
194F	Units of Mutual Fund	NIL	20%
194G	Commission on Lottery	NIL	30%
194H	Commission/Brokerage	NIL	5%
194I	Rent	NIL	30%
194J	Professional Services	NIL	10%
194J	Technical Services	NIL	20%
194K	Income from Units	NIL	20%
194LB	Infrastructure Debt Fund	NIL	5%
194LC	Income from Securitisation Trust	NIL	25%
194LD	Interest on Rupee Denominated Bonds	NIL	5%
195	Other Income to Non-Residents	NIL	30%

GST TDS vs Income Tax TDS 

Tax Deducted at Source (TDS) operates differently under GST and Income Tax regimes, each serving distinct purposes in India’s tax ecosystem. While both involve deduction of tax at the source of payment, they differ significantly in their application, rates, procedures, and compliance requirements. Here’s a detailed comparison highlighting the key differences between GST TDS and Income Tax TDS.

Aspect	GST TDS	Income Tax TDS
Rate Structure	Uniform 2% across all supplies	Variable rates ranging from 1% to 30% depending on nature of payment
Threshold Limit	₹2,50,000 per contract for supplies	Varies by section – ₹30,000 for professional services, ₹1,80,000 for rent, ₹2,40,000 for salary, etc.
Deduction Base	Total invoice value including GST	Payment value excluding taxes in most cases
Credit Utilization	Available as Input Tax Credit (ITC) to supplier	Available as tax credit against income tax liability
Filing Requirements	GSTR-7 monthly return by 10th of following month	Quarterly TDS returns (24Q, 26Q, 27Q) and annual TCS return (27EQ)
Applicability	Only government entities, local authorities, and notified persons/entities	All specified deductors including companies, firms, individuals meeting threshold criteria
Certificate Issuance	TDS certificate through GST portal	Form 16/16A certificates issued by deductors
Payment Timeline	By 10th of the month following deduction	Quarterly – by 7th of April, July, October, and January
PAN Requirement	GSTIN of supplier required	PAN of deductee mandatory for TDS deduction
Nature of Tax	Indirect tax on supply of goods/services	Direct tax on income earned
Refund Process	Through regular GST refund mechanism	Through income tax return filing or separate refund application
Penalty for Non-compliance	Interest at 18% per annum plus penalty up to ₹10,000	Interest at 1.5% per month plus penalty equal to TDS amount
Audit Requirements	Part of regular GST audit	Separate TDS audit if threshold exceeded
Set-off Mechanism	Can be set off against GST liability	Can be set off against income tax liability only
Registration Impact	Does not require separate registration	May require TAN (Tax Deduction Account Number)
Scope of Deduction	Limited to B2B supplies above threshold	Covers salary, rent, professional fees, commission, interest, etc.
Documentation	Invoice with TDS details	Challan, certificate, and return filing
Recovery from Deductee	Supplier can recover GST TDS from buyer	Generally not recoverable from payee
Applicability Timeline	Effective from October 1, 2018	Long-established system since Income Tax Act inception

TDS Rate on Brokerage

The tds rate on brokerage has seen significant changes in the current financial year. 

Understanding these modifications is crucial for businesses:

Section 194H – Commission or Brokerage

• Current Rate: 2% (reduced from 5%).
• Threshold: ₹20,000 (increased from ₹15,000).
• Effective Date: October 1, 2024.

Types of Brokerage Covered:

1. Real estate brokerage
2. Insurance brokerage
3. Stock market brokerage
4. General commercial brokerage

Exception: Commission paid to directors as remuneration attracts 194j TDS Rate of 10% instead of brokerage rates.

Important TDS Provisions and Rules

Several key provisions govern the application of TDS Rate Chart. 

These rules ensure proper implementation:

1. PAN Requirements

Higher TDS rates apply when PAN is not furnished, ensuring proper taxpayer identification and compliance.

Scenario	TDS Rate	Details
PAN Furnished	Standard rates as per TDS chart	Normal deduction rates apply
PAN Not Furnished	20%	Higher rate for all sections
Specific Higher Rates	As mentioned in respective sections	E.g., 30% for lottery winnings

Key Rules:

• Mandatory: PAN required for all high-value transactions.
• Verification: Deductor must verify PAN authenticity.
• Documentation: PAN copy must be maintained in records.
• Exception: Some sections specify rates higher than 20% even without PAN.

2. Certificate Requirements

Mandatory issuance of TDS certificates within prescribed timelines to provide proof of tax deduction to payees.

Certificate Type	Applicable For	Time Limit	Format
Form 16	Salary TDS	15th June of following year	Annual certificate
Form 16A	Non-salary TDS	Within 15 days of quarterly return filing	Quarterly/transaction-wise
Form 16B	Property transactions	15 days from TDS deduction	Transaction-specific
Form 16C	Rent payments	15 days from TDS deduction	Transaction-specific

Key Requirements:

• Digital Signatures: Certificates must be digitally signed
• Correction Process: Revised certificates for any errors
• Penalty: ₹100 per day for delayed issuance
• Format Compliance: Must follow prescribed government formats

Calculation Examples

Understanding the TDS Rate Chart through real examples helps in practical application. Consider these detailed scenarios:

Example 1: Rent Payment Analysis – Section 194I Impact

A company, ABC Pvt. Ltd., pays ₹60,000 rent per month for a commercial office to Mr. Sharma (a resident Indian).

   Important Info:

• Monthly Rent: ₹60,000
  
• Annual Rent: ₹60,000 × 12 = ₹7,20,000
  
• Security Deposit: ₹3,00,000 (No TDS on this)
  
• TDS Threshold: ₹50,000 per month
  
• TDS Rate: 10%
  

TDS Calculation:

1. Rent is more than ₹50,000 → TDS applies.
   
2. Monthly TDS = ₹60,000 × 10% = ₹6,000
   
3. Annual TDS = ₹6,000 × 12 = ₹72,000

If rent per month is more than ₹50,000, the company must deduct 10% TDS and pay it to the government.

Example 2: New Partnership TDS – Section 194T Application

A partnership firm, M/s Tech Solutions, pays salary and interest to its 3 partners.

TDS Rule (Section 194T) – Effective from 1 April 2025:

• TDS applies if any partner gets more than ₹20,000 per year
  
• TDS Rate = 10%

Partner Payments:

Partner A:

• Salary: ₹25,000 × 12 = ₹3,00,000
  
• Bonus: ₹50,000
  
• Interest: ₹10,000 × 12 = ₹1,20,000
  
• Total = ₹4,70,000
  
• TDS = ₹4,70,000 × 10% = ₹47,000
  

Partner B:

• Commission: ₹30,000 × 12 = ₹3,60,000
  
• Profit Share: ₹1,00,000
  
• Total = ₹4,60,000
  
• TDS = ₹4,60,000 × 10% = ₹46,000
  

Partner C:

• Remuneration: ₹20,000 × 12 = ₹2,40,000
  
• Interest: ₹15,000 × 12 = ₹1,80,000
  
• Total = ₹4,20,000
  
• TDS = ₹4,20,000 × 10% = ₹42,000

Total TDS for Firm:

₹47,000 + ₹46,000 + ₹42,000 = ₹1,35,000 per year.

If partners get paid more than ₹20,000 in a year (salary, interest, bonus, etc.), TDS at 10% must be deducted.

As Benjamin Franklin wisely said, “An investment in knowledge pays the best interest” – and nowhere is this truer than when it comes to understanding the TDS Rate Chart. The changes in FY 2025-26 aren’t just numbers on a government notification; they’re opportunities for smarter financial planning and substantial savings. 

Remember, every rupee saved through proper TDS planning is a rupee that stays in your pocket. Don’t let ignorance become your most expensive tax – embrace these changes, update your compliance systems, and transform what many see as a burden into your competitive advantage. 

Don’t wait for the next compliance deadline. Contact RegisterKaro now and ensure your business stays ahead of all TDS requirements for FY 2025-26.

Frequently Asked Questions (FAQs)

1. What is the current TDS rate chart for FY 2025-26?

The TDS Rate Chart for FY 2025-26 includes significant revisions with enhanced threshold limits and new sections. Major changes include increased limits for sections 194A (₹50,000), 194I (₹50,000 monthly), and 194J (₹50,000). The 194H TDS rate has been reduced to 2% from the previous 5%, providing substantial relief to businesses paying brokerage. 

2. How has the 194C TDS rate changed for contractors?

The 194C TDS rate remains unchanged at 1% for payments to individual contractors and 2% for companies and firms. However, compliance has been simplified with clearer guidelines on applicability and documentation requirements. The 194C TDS rate limit threshold continues as ₹30,000 for individuals and ₹75,000 for others annually, not per transaction. 

3. What is the difference between 194IA and 194IB TDS rates?

Section 194IA applies at 1% TDS rate for immovable property purchases exceeding ₹50 lakhs, covering buyer’s obligation during property transactions. Section 194IB levies 5% TDS on rent payments exceeding ₹50,000 monthly for residential properties. The 194IA TDS rate targets property investments while 194IB TDS rate focuses on residential rental income. 

4. When is TDS applicable on rent payments under section 194I?

TDS on rent under Section 194I applies when monthly rent exceeds ₹50,000, representing a significant change from the previous annual threshold of ₹2,40,000. The rate remains 10% for resident landlords and 30% for non-resident landlords. This monthly threshold calculation means businesses paying substantial monthly rents must now deduct TDS regularly. 

5. What are the current income tax TDS rates for different sections?

Income tax TDS rates vary extensively based on payment nature and recipient classification. Salary TDS follows progressive slab rates, while specific sections have predetermined rates like 10% for interest (194A), 10% for professional services (194J), and 30% for lottery winnings (194B). The comprehensive TDS sections and rates include over 25 different categories with varying thresholds and applicability criteria. 

6. How does GST TDS differ from income tax TDS?

GST TDS rate is uniformly 2% and applies exclusively to government entities purchasing goods or services above ₹2,50,000 per contract. Unlike income tax TDS with variable rates, GST TDS has consistent application across all transaction types. The deducted GST TDS provides input tax credit to suppliers through GSTR-2A, unlike income tax TDS which provides tax credit against final liability. 

7. What is the TDS rate on brokerage and commission payments?

TDS rate on brokerage under Section 194H is currently 2%, significantly reduced from the previous 5% rate effective October 2024. The threshold limit increased to ₹20,000 from ₹15,000, providing dual benefits of lower rates and higher exemption limits. TDS on commission varies by type: 194H covers general commercial brokerage at 2%, while 194G covers lottery commission at 5%. 

8. Are there any exemptions from TDS deduction?

Several payments enjoy TDS exemptions including payments to government entities, Reserve Bank of India, and specified tax-exempt institutions under Section 10(23C). Mutual funds specified under Section 10(23D) and payments below respective threshold limits also remain exempt. Agricultural income payments, dividends from domestic companies (with certain conditions), and payments to resident senior citizens below taxable income limits may qualify for exemptions.

9. What happens if PAN is not provided for TDS deduction?

When PAN is not furnished by the payee, TDS must be deducted at 20% or the rate specified in the relevant section, whichever is higher. This punitive provision ensures taxpayer identification and prevents tax evasion through anonymous transactions. The higher rate applies universally to residents and non-residents without exception. 

10. How can taxpayers verify TDS deductions and claim credit?

TDS credit verification is possible through Form 26AS available on the income tax e-filing portal, showing all TDS deductions by third parties. The Annual Information Statement (AIS) provides comprehensive transaction details including high-value purchases and TDS deductions. Taxpayers should regularly reconcile TDS certificates with Form 26AS entries and report discrepancies immediately to deductors.