UPDATED TDS RATE CHART FOR FY 2024-2025 (AY 2025-2026)

Tax Deducted at Source (TDS) is a mechanism used by tax authorities worldwide to collect tax at the source of revenue generation. It serves as an effective tool to ensure a steady flow of revenue for the government and to prevent tax evasion. TDS applies to various types of income such as salaries, interest payments, rent, commissions and others. In this guide, we present the updated TDS Rate Chart for FY 2024-2025 (AY 2025- 2026), covering various income categories such as salaries, interest payments, rent, commissions, and more. Understanding TDS is essential for both deductors and deductees to ensure compliance with tax laws and avoid penalties.

Section	Nature of Payment	Threshold (Rs.)	Individual / HUF TDS Rates (%)	Others TDS Rate (%)
192	Salaries	Rs. 2,50,000	Slab Rates	Slab Rates
192A	Premature EPF withdrawal	Rs. 50,000	10%	10%
193	TDS on interest on securities	Rs. 10,000	10%	10%
194	Payment of dividend	Rs. 5,000	10%	10%
194A	Interest issued by banks or post offices on deposits	Rs. 40,000	10%	10%
	Interest by others apart from on securities	Rs. 50,000	10%	10%
194B	Amounts won through lotteries, puzzles,or Aggregate of games	Rs. 10,000	30%	30%
194BB	Amounts won from horse races	Rs. 10,000	30%	30%
194C	Payments to   contractor   or   sub-contractor Single Payments	Rs. 30,000	1%	2%
	Payments to contractor/sub-contractor	Rs. 1,00,000	1%	2%
194D	Payment of insurance commission to domestic companies	Rs. 15,000	NA	10%
	Payment of insurance commission to companies other than domestic ones	Rs. 15,000	5%	NA
194DA	Maturity of Life Insurance Policy	Rs. 1,00,000	5%	5%
194EE	Payment under NSS (National Savings Scheme)	Rs. 2,500	10%	10%
194F	Payment of repurchase of unit by UTI or any mutual fund	No Limit	20%	20%
194G	Payments or commission on sale of lottery  tickets	Rs. 15,000	5%	5%
194H	Commission or brokerage	Rs. 15,000	5%	5%
194I	Rent of land, building, or furniture	Rs. 2,40,000	10%	10%
	Rent of plant and machinery	Rs. 2,40,000	2%	2%
194IA	Payment for transfer of immovable property other than agricultural land	Rs. 50,00,000	1%	1%
194IB	Rent payment that is made by an individual or HUF not covered under payment 194I   Payment     made    under     Joint     Development	Rs. 50,000 (per month)	5%	NA
194IC	Agreement (JDA) to Individual/HUF	No Limit	10%	10%
194J	Fees paid for professional services	Rs. 30,000	10%	10%
	Amount paid for technical services	Rs. 30,000	2%	2%
	Amounts paid  as royalty for sale/distribution/exhibition of cinematographic films	Rs. 30,000	2%	2%
194K	Payment of income for units of a mutual fund, for example- dividends	Rs. 5,000	10%	10%
194LA	Payment made for compensation for acquiring certain immovable property	Rs. 2,50,000	10%	10%
194LB	Payment of interest on infrastructure bonds to Non-Resident Indians	NA	5%	5%
194LBA(1)	) Certain income distributed by a business trust among its unit holder	NA	10%	10%
194LD	Payment    of    interest    on    rupee-denominated bonds, municipal debt security, and government NA securities	NA	5%	5%
194M	Amounts     paid      for     contract,      brokerage, commission or   professional   fee   (other   than 194C, 194H, 194J)	Rs. 50,00,000	5%	5%
194N	Cash withdrawal over a certain amount from the  bank, and ITR is filed	RS. 1,00,00,000	2%	2%
	Cash withdrawal from a bank without filing ITR	Rs. 20,00,000	2%	2%
194O	Amount paid for the sale of products/services by e-commerce service providers via their digital platform	Rs. 5,00,000	1%	1%

194Q           Payments made for the purchase of goods                                     Rs. 50,00,000   0.10%    0.10%

194S            TDS on the payment of any crypto or other  virtual asset             NA                    1%          1%

206AA          TDS for non-availability of PAN                                                 NA                     20%        20%

206AB           TDS on non-filers of Income tax return                                                NA             Rate higher of:      Rate in force

                                                                                                                                                              5% or 2

                                                                                                                                                        times the mentioned

                                                                                                                                                                     rate

                                                                                                                                                              in provision

1. How does TDS work?                                                                                                                                                                                                     TDS works on the principle of deducting a certain percentage of tax at the time of making payments to individuals or legal entities. The payer, also known as the deductor, deducts the appropriate amount of TDS and remits it to the government on behalf of the payee, known as the deductor. The amount of TDS deducted is reflected in Form 26AS in income tax portal.   
2. Applicability of TDS                                                                                                                                                                                                             TDS applies to various types of payments made by individuals or entities. Some common cases where TDS is applicable include:                      

   Payment of commissions

   Payments to contractor and subcontractors Payment of salary or wages to employees

   Interest payments by financial institutions and banks Rent payments in excess of limit specified.

   Professional fees payments Dividend payments

    

3. Rates of TDS                                                                                                                                                                                                                                  TDS rates are different based on the type of income and the provisions of the tax laws. These rates are set by the Income tax authorities and are subject to regular revisions. So, it is essential for deductees to keep them up to date with the latest TDS rates.
4. TDS Deduction and Compliance                                                                                                                                                                      The deductors are required to deduct TDS at the rate prescribed and deposit the deducted amount to the government within the prescribed time limits. Failure to comply with TDS provisions may result in penalties and interest charges. Deductors are also required to submit TDS certificates like Form 16 (for income from salary) and Form 16A (for payments other than salary) to the deductors.       
5. Filing of TDS return                                                                                                                                                                                                              Apart from TDS deduction and remittance, payers are also required to file TDS returns with the tax authorities. These returns contain details of TDS deducted, deposited and other relevant details. Failure to file TDS returns by the due date may result in penalties and legal consequences.                                                                                                                                                                                                                           Conclusion: Navigating the intricacies of TDS is vital for businesses and individuals alike to fulfill their tax obligations. From understanding how TDS works to complying with deduction and filing requirements, staying informed about the latest TDS rates and regulations is crucial. By following these guidelines, taxpayers can ensure smooth tax operations and avoid any legal repercussions.                                 ********************************************