TDS Rate Chart for FY 2025-26 (AY 2026-27) by Income Tax Department

Tax Deducted at Source (TDS) is a mechanism launched by the Government of India to generate revenue. In this mechanism, the payer deducts a certain percentage of tax at the time of making payment to the receiver. This amount is then transferred directly to the government. Using this method, the government can collect the tax at the point when it is earned by the individual rather than waiting for the financial year to end.

TDS is applicable to various sources of income such as salaries, interest on fixed deposits, rent, commissions, etc. This mechanism of TDS helps reduce the chances of tax evasion and ensures a constant flow of revenue to the government throughout the financial year. Understanding its importance is essential for the taxpayers in India.

TDS is deducted from distinct sources of income, as per the rate set by the tax department, Government of India. The firm/individual who deducts the amount in the form of TDS while making the payment is known as the deductor, and the firm/individual who receives the deducted amount is known as the deductee.

It is the key responsibility of a deductor to deduct the TDS amount while making the payment and transferring the same to the government. Note the point: the applicability of Tax Deducted at Source (TDS) is the same for all modes of payment, including cash, cheque, or credit. TDS is synced with the PAN cards of both the deductor and the deductee.

In accordance with the income tax department, TDS is applicable on the following sources of income:

• Salaries
• Interest payments
• Commission payments
• Rent payments
• Consultation fees
• Professional fees

Note: Individuals making payments of rents or paying fees to professionals such as lawyers and doctors for their services are not required to deduct TDS from that amount.

Tax Deducted at Source (TDS) is a type of advance tax that is compulsory to be deposited with the government frequently, and the deductor is responsible for depositing this amount to the government on time.

The amount deducted in the form of TDS can be claimed by the deductee in the form of tax return after they file the income tax return (ITR).

Recently, the Government of India, Income Tax Department, has uploaded the latest TDS rate chart, amended as per the Finance Act 2025, for the Financial Year 2025-26 (Assessment Year 2026-27).

To know the latest updated rates for TDS, refer to the PDF below