TDS Rate Chart for FY 2025-26 (AY 2026-27), Updated As Per Latest Income Tax Rules:

TDS Rate Chart for FY 2025-26 (AY 2026-27), Updated As Per Latest Income Tax Rules

What do you mean by TDS?

The full form of TDS is Tax Deducted at Source. It is a method where a certain percentage of income is deducted by the payer at the time of making specified payments, such as salary, rent, interest, etc., and submitted to the government.

Why is TDS important?

• It ensures timely tax collection.
• It is mandatory compliance for businesses and individuals.
• It Reduces tax evasion.

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Salary and Bank Interest

Section 192: Salary Section 192 of the Income Tax Act requires employers to deduct TDS from employees' salaries at the time of actual payments. No tax is required to be deducted if the taxable income of the employee does not exceed Rs. 2.5 Lakhs, and this section includes normal slab rates. Section 194A: Bank/Post Office Interest Under Section 194A of the Income Tax Act, TDS is deducted at a rate of 10% on interest on securities. TDS will be deducted only if the interest is more than Rs 40,000 or Rs 50,000, and it is deducted at 10% with a valid PAN and 20% without a PAN.

Lottery, Games and Horse Race

Section 194B: Lottery/Game Shows/Crossword It specifies the TDS to be deducted on wins from lotteries, crossword puzzles, game shows, etc. Threshold limit is Rs. 10,000 for a single transaction, and the TDS Rate is 30%. Section 194BA: Online Games Any person who is in charge or responsible for paying any amount to the person winning via online games during the FY is liable to deduct the TDS on net winnings either during withdrawal or at the end of the financial year under the Income Tax Act, 1961. There is no threshold limit. However, the TDS rate is 30%. Section 194BB: House Race winnings It is a provision in the Income Tax legislation which provides a deduction on any income generated from winning a horse race. The threshold limit is Rs.10,000 and the TDS Rate is 30%.

Contractors, Insurance, Commission

Section 194C: Contractors/Subcontractors Contractor is an individual who has decided to enter into a contract to carry out either a part or the entire work. whereas an individual who has decided to enter into a contract to carry out a part or the entire work is a subcontractor, and the threshold limit is Rs. 30,000 per transaction or Rs. 100,000 aggregate per year. and the TDS rate is 1% for individuals/HUF and 2% for others. Section 194D: Insurance Commission Insurance Commission is any remuneration or reward that is in the form of commission or otherwise. the threshold limit is Rs. 20,000 and the TDS Rate is 2%. Section 194DA: Life Insurance Policy Proceeds Any payout from a life insurance policy, including maturity benefits and death benefits, is subject to TDS. Threshold limit is Rs100,000, and the TDS Rate is 2%.

Commission, Rent and Property

Section 194G: Commission on Lottery Ticket Sales Any income earned by a person in the form of a bribe, remuneration, or prize on lottery tickets who has been selling lottery tickets or also stocking, distributing or purchasing is liable to pay taxes. the threshold limit is Rs. 20,000 and the tax Rate is 2%. Section 194H: Commission or Broking The payment received by an individual or agent who acts on behalf of another entity is called commission. TDS on commission for services like selling, buying, etc.: the threshold limit of this is Rs 20,000. and the TDS Rate is 2%. Section 1941: Rent on Plant/Machinery and Property TDS on rent paid for machinery, furniture or buildings. Threshold limit of this is Rs.50,000 per month and the TDS Rate is 2% for Plant and Machinery and 10% for Land, Building, Furniture.

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Property Sale and High Rent by Individuals

Section 194IA: Sale of Immovable Property The buyer of an immobile property must deduct TDS at 1% while making the payment to the owner or seller of the property. TDS cut is made by the buyer and not by the seller. Tax is applicable only for transactions over Rs 50 lakhs. Section 194IB: High Rent by Individual/HUF TDS on rent paid by individuals/HUF is not covered under 1941 at a rate of 2% and the threshold limit is Rs 50,000 per month.

Technical Fees, Dividends and Individual Payments

Section 194J: Professional/technical Fees TDS on fees for technical services, royalty, consultancy, etc., at the rate of 10% for General professional services and 2% for Technical services/call centres Section 194K: Mutual Fund Dividend TDS on dividends from mutual fund units is at the rate of 10% of TDS and the threshold limit is Rs 10,000. Section 194M: Payments by Individual/HUF TDS on contract or commission/professional payments not covered under 194C, 194H, or 194J at a rate of 2%, and the threshold limit is Rs 50,00,000.

Cash Withdrawal and E-commerce

Section 194N: Cash withdrawal TDS is on large cash withdrawals from banks/post offices with a threshold limit of Rs 1 crore for others and Rs 3 crore for Co-op Societies. (TDS Rate is 2%) Section 194O: E-commerce Transactions TDS on payments made by e-commerce operators to sellers at the rate of 0.10% and the threshold limit is Rs 500,000.

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Purchase of Goods and Business Perks

Section 194P: Senior Citizens more than 75 years old TDS on income of senior citizens with only pensions plus interest income. Senior citizens should have been residents in the previous year. only the basic exemption limit for senior citizens or super senior citizens with a normal tax slab rate. Section 194Q: Purchase of Goods TDS on purchase of goods by a buyer whose turnover is more than Rs 10 crore. the threshold limit is Rs 50,00,000 and the TDS rate is 0.10%. Section 194R: Perquisites in Business/Profession TDS on benefits/advantages given to business associates or professionals at a rate of 10% and the threshold limit is Rs 20,000.