TDS Rate Chart for FY 2025-26: Tax Deducted at Source (TDS) is an important tax collection mechanism implemented by the Income Tax Department. It ensures that tax is collected at the point of income generation, reducing the chances of tax evasion. In the Union Budget 2025, several changes were introduced to TDS rates for different types of transactions.
This guide provides a simplified explanation of the updated TDS rates for the financial year (FY) 2025-26.
What is TDS?
TDS is a system where the payer (also called the “deductor”) withholds a certain percentage of tax before making payments to the payee (or “deductee”). The deducted tax is then deposited with the government, ensuring timely tax collection.
Why is TDS Important?
- Prevents tax evasion: TDS ensures that taxes are deducted at the source of income.
- Ensures timely collection: Tax is collected at the time of income generation, aiding in efficient tax administration.
- Avoids penalties: Correct and timely deduction of TDS helps in avoiding penalties and interest charges.
Key Changes in TDS Rates for FY 2025-26
The table below summarizes the important changes made to TDS rates as per the Union Budget 2025.
| TDS Section | Nature of Payment | Old Threshold Limit | New Threshold Limit |
|---|---|---|---|
| 193 | Interest on securities | NIL | Rs. 10,000 |
| 194A | Interest other than securities | Rs. 50,000 (Sr. Citizens), Rs. 40,000 (Others) | Rs. 1,00,000 (Sr. Citizens), Rs. 50,000 (Others) |
| 194 | Dividend to individual shareholders | Rs. 5,000 | Rs. 10,000 |
| 194K | Mutual fund income | Rs. 5,000 | Rs. 10,000 |
| 194B, 194BB | Lottery and horse race winnings | Rs. 10,000 (aggregate) | Rs. 10,000 (per transaction) |
| 194D | Insurance commission | Rs. 15,000 | Rs. 20,000 |
| 194H | Commission or brokerage | Rs. 15,000 | Rs. 20,000 |
| 194-I | Rent | Rs. 2,40,000 | Rs. 6,00,000 |
| 194J | Professional/Technical fees | Rs. 30,000 | Rs. 50,000 |
| 194LA | Enhanced compensation | Rs. 2,50,000 | Rs. 5,00,000 |
| 206C(1G) | Overseas remittances and tour packages | Rs. 7,00,000 | Rs. 10,00,000 |
Overview of TDS Rate Chart for FY 2025-26
The following table details TDS rates applicable for various types of income:
| Section | Nature of transaction | Deductee | Threshold Limit (Rs) | TDS Rate |
|---|---|---|---|---|
| 192 | Payment of salary | Resident, Non-Resident | Basic exemption limit of employee | Normal Slab Rates |
| 192A | Premature withdrawal from EPF | Resident, Non-Resident | Rs. 50,000 | 10% (if PAN is furnished). 20% (if PAN is not furnished) |
| 193 | Interest on securities | Resident | Debentures- Rs. 5,000 8% Savings (Taxable) Bonds 2003 or 7.75% Savings (Taxable) Bonds 2018- Rs. 10,000 Other securities- Rs. 10,000 (earlier: No limit) | 10% (Through Budget, 2023 exemption of TDS on interest from listed debentures has been removed. Therefore, tax is to be deducted on interest on such specified securities) |
| 194 | Payment of any dividend | Resident | Rs. 10,000 (earlier: Rs. 5,000) | 10% |
| 194A | Interest from other than interest from securities (from deposits with banks/post office/co-operative society) | Resident | Senior Citizens- Rs. 1,00,000 (earlier: Rs. 50,000) In case of others when payer is bank, cooperative society and post office- Rs. 50,000 (earlier: Rs. 40,000) Others: Rs. 10,000 (earlier: Rs.5,000) | 10% |
| 194A | Interest from other than interest on securities u/s 193 and interest from banks/post office/co-operative society. | Resident | Rs. 5,000 | 10% |
| 194B | Income from lottery winnings, card games, crossword puzzles, and other games of any type | Resident, Non-Resident, Foreign Company | Rs. 10,000 single transaction (earlier: Rs. 10,000 aggregate) | 10% |
| 194BA | Income from online games | Resident, Non-Resident, Foreign Company | NIL | 30% |
| 194BB | Income from horse race winnings | Resident, Non-Resident, Foreign Company | Rs. 10,000 single transaction (earlier: Rs. 10,000 aggregate) | 30% |
| 194C | Payment to contractor/sub-contractor | Resident | Single transaction- Rs. 30,000 Aggregate transactions- Rs. 1,00,000 | Individuals/HUFs – 1% Other than individuals/HUFs – 2% |
| 194D | Insurance commission to | Resident | ||
| i) Individuals ii) Companies | Resident | Rs. 20,000 (earlier Rs. 15,000) | 5% (Budget 2024 – This rate is reduced to 2% with effect from 1st April 2025) 10% | |
| 194DA | Income for the insurance pay-out, while payment of any sum in respect of a life insurance policy. | Resident | Rs. 1,00,000 | 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 |
| 194E | Payment to non-resident sportsmen/sports association | Non-Resident, Foreign Company | No limit | 20% *This rate shall be increased by applicable surcharge and 4% cess |
| 194EE | Payment of amount standing to the credit of a person under National Savings Scheme (NSS) | Resident, Non-Resident | Rs. 2,500 | 10% |
| 194F | Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund | Resident, Non-Resident | No limit | 20% Budget 2024 – This section is proposed to be omitted with effect from 1st October 2024 |
| 194G | Payments, commission, etc., on the sale of lottery tickets | Resident, Non-Resident, Foreign Company | Rs. 20,000 (earlier: Rs. 15,000) | 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 |
| 194H | Commission or brokerage | Resident | Rs. 20,000 (earlier: Rs. 15,000) | 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 |
| 194-I | Rent: | Resident | ||
| 194-I(a) Rent on plant and machinery | Resident | Rs. 6,00,000 (earlier: Rs. 2,40,000) | 2% | |
| 194-I(b) Rent on land/building/furniture/fitting | Resident | Rs. 6,00,000 (earlier: Rs. 2,40,000) | 10% | |
| 194-IA | Payment in consideration of transfer of certain immovable property other than agricultural land. | Resident | Rs. 50,00,000 | 1% |
| 194-IB | Rent payment by an individual or HUF not covered under Section 194-I | Resident | Rs. 50,000/month | 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 |
| 194-IC | Payment under Joint Development Agreements (JDA) to Individual/HUF | Resident | No limit | 10% |
| 194J | Any sum paid by way of fee for professional services | Resident | Rs. 50,000 (earlier: Rs. 30,000) | 10% |
| 194J | Any sum paid by way of remuneration/fee/commission to a director | Resident | Rs. 50,000 (earlier: Rs. 30,000) | 10% |
| 194J | Any sum paid for not carrying out any activity concerning any business; | Resident | Rs. 50,000 (earlier: Rs. 30,000) | 10% |
| 194J | Any sum paid for not sharing any know-how, patent, copyright, etc. | Resident | Rs. 50,000 (earlier: Rs. 30,000) | 10% |
| 194J | Any sum paid as a fee for technical services | Resident | Rs. 50,000 (earlier: Rs. 30,000) | 2% |
| 194J | Any sum paid as fees for technical services, but the payee is engaged in the business of operation of the call center. | Resident | Rs. 50,000 (earlier: Rs. 30,000) | 2% |
| 194K | Payment of any income for units of a mutual fund, for example, dividend | Resident | No limit | 10% |
| 194LA | Payment in respect of compensation on acquiring certain immovable property | Resident | Rs. 5,00,000 (earlier: Rs. 2,50,000) | 10% |
| 194LB | Payment of interest on infrastructure debt fund to Non-Resident | Non-Resident, Foreign Company | No limit | 5% *This rate shall be increased by applicable surcharge and 4% cess |
| 194LC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against loan agreement or the issue of long-term bonds | Non-Resident, Foreign Company | No limit | 5% |
| 194LC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against the issue of long-term bonds listed in IFSC | Non-Resident, Foreign Company | No limit | 4% |
| 194LD | Payment of interest on bond (rupee-denominated) to FII or a QFI | Non-Resident, Foreign Company | No limit | 5% |
| 194LBA(1) | Certain income distributed by a business trust to its unitholder | Resident | No limit | 10% |
| 194LBA(2) | Interest income of a business trust from SPV distribution to its unitholders | Non-Resident, Foreign Company | No limit | 5% |
| 194LBA(2) | Dividend income of a business trust from SPV, in which it holds the entire share capital exempt the capital held by the government, and distribution to its unitholders | Non-Resident, Foreign Company | No limit | 10% |
| 194LBA(3) | Rental income payment of assets owned by the business trust to the unitholders of such business trust | Non-Resident | No limit | 30% |
| 194LBA(3) | Rental income payment of assets owned by the business trust to the unitholders of such business trust | Foreign Company | No limit | 40% |
| 194LBB | Certain income paid to a unitholder in respect of units of an investment fund | Resident, Non-Resident | No limit | 10% |
| 194LBB | Certain income paid to a unitholder in respect of units of an investment fund | Foreign Company | No limit | 40% |
| 194LBC | Income from investment in securitisation fund received to an individual and HUF | Resident | No limit | 25% |
| 194LBC | Income from investment in securitisation fund received to domestic company | Resident | No limit | 10% |
| 194LBC | Income from investment in securitisation fund received to a foreign company | Foreign Company | No limit | 40% |
| 194LBC | Income from investment in securitisation fund received to NRI | Non-Resident | No limit | 10% |
| 194M | Certain payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J | Resident | 50,00,000 | 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 |
| 194N | Cash withdrawal exceeding a certain amount | Resident, Non-Resident | Co-operative society: 3 Crore Others: 1 crore | 2% |
| 194N | Cash withdrawal in case person not filing ITR for last three years and the original ITR filing due date expired | Resident, Non-Resident | – 20 lakh to 1 crore -1 crore | 2% 5% *If cash is withdrawn by a co-operative society the limit shall be Rs 3 Crore instead of Rs 1 Crore |
| 194O | Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform. | Resident | 5,00,000 | 1% (5%, in case PAN is not furnished) |
| 194P | Payment of pension or interest to specified senior citizens of age 75 years or more | Resident | Basic exemption limit of senior citizens or super senior citizens | Normal Income Tax Slab rates |
| 194Q | Payments for the purchase of goods | Resident | 50,00,000 | 0.10% |
| 194R | Perquisite or benefit to a business or profession | Resident | 20,00,000 | 10% |
| 194S | TDS on the transfer of virtual digital assets | Resident | Specified Persons- 50,000 Others- 10,000 | 1% |
| 195 | Income on investments made by NRI citizen | Non-Resident | No limit | 20% |
| 195 | Income by way of LTCG referred to in section 115E in the case of NRI | Non-Resident | No limit | 10% |
| 195 | Income by way of LTCG under section 112(1)(c)(iii) | Non-Resident, Foreign Company | No limit | 10% |
| 195 | Income by way of LTCG under section 112A | Non-Resident, Foreign Company | No limit | 10% |
| 195 | Income by way of STCG under section 111A | Non-Resident, Foreign Company | No limit | 15% |
| 195 | Any other income by way of LTCG | Non-Resident, Foreign Company | No limit | 20% |
| 195 | Interest payable on money borrowed by the government or Indian concern in foreign currency | Non-Resident, Foreign Company | No limit | 20% |
| 195 | Income from royalty payable by the Indian concern or the government, for the copyright in a subject referred in the first proviso of section 115A or computer software referred to in the second proviso of section 115A | Non-Resident, Foreign Company | No limit | 10% |
| 195 | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy. If the agreement for such royalty payment is entered in between 31st March 1961 and 1st April 1976 | Foreign Company | No limit | 50% |
| 195 | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy If the agreement for such royalty payment is entered after 31st March 1976 | Foreign Company | No limit | 10% |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy | Non-Resident | No limit | 10% |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy If the agreement for such payment is entered in between 29th February 1964 and 1st April 1976 | Foreign Company | No limit | 50% |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy If the agreement for such payment is entered after 31st March 1976 | Foreign Company | No limit | 10% |
| 195 | Any other income | Non-Resident | No limit | 30% |
| 195 | Any other income | Foreign Company | No limit | 40% |
| 196B | Income (including LTCG) from units of an offshore fund | Non-Resident, Foreign Company | No limit | 10% |
| 196C | Income (including LTCG) from foreign currency bonds or GDR of an Indian company | Non-Resident, Foreign Company | No limit | 10% |
| 196D | Income (excluding dividend and capital gain) from Foreign Institutional Investors. | Non-Resident, Foreign Company | No limit | 20% |
| 206AB | Income (excluding dividend and capital gain) from Foreign Institutional Investors. Payment to non-filers, i.e. those who have not filed their income tax return in the last year Non filers do not include: – People who are not required to file their ITRs – NRs who do not have a PE in India | Resident | No limit | – 2 times the rate given in the Income Tax Act or Finance Act or – 5%, whichever is higher |
| 206AA | TDS rate in case of Non availability of PAN | Resident, Non-Resident, Foreign Company | No limit | Rates specified above or 20%, whichever is higher |
Conclusion
Understanding the TDS rates for different categories of income is crucial for taxpayers, business owners, and investors alike. Correct TDS deductions help ensure compliance with tax laws, avoiding penalties and interest charges. Staying updated with changes in TDS rates, such as those introduced in the Union Budget 2025, ensures smoother financial transactions and better tax planning.
For assistance with TDS compliance or to optimize your taxes, contact Accounts Profession for expert guidance!
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