Tax Deducted at Source is a crucial revenue generating mechanism of the government, whereby tax is deducted at the stage of income generation itself. The person who is making the payment should deduct TDS for different kinds of transactions. For example, salaries, rent, interest, commissions and professional services.
While making specified payments to persons, it is necessary to deduct tax before making a payment under the provisions of Income Tax Act. You can refer to the following article for TDS rate chart 2025 for the latest tax deduction rates applicable to various types of income.
Contents
What is TDS?
TDS (Tax Deducted at Source) is a way of collecting tax at the time income is earned or paid. The person making the payment is called the deductor and must cut a part of the amount as tax. The person receiving the payment is called the deductee.
TDS is deducted at different rates depending on the type of payment, who is receiving it, and whether they are an Indian resident or a foreigner.
It’s important to:
- Deduct the right amount of tax,
- Deposit it with the government within the due date,
- And file TDS returns on time.
The next section includes TDS rates for residents, non-residents, and both Indian and foreign companies.
What is a TDS Rate Chart?
A TDS Rate Chart is a detailed table that shows where TDS needs to be deducted, under which section of the law, the applicable TDS rate, and the exemption limits (minimum amount up to which TDS is not required).
TDS rates differ based on several factors:
- Whether the person is a resident or non-resident,
- The type of payment (like salary, interest, rent, etc.),
- The amount of each payment,
- And the total amount paid during the financial year.
This chart has been updated as per the 2025 Budget and helps taxpayers follow the rules properly and avoid penalties for missing TDS compliance.
TDS Changes from 1st April, 2025
Starting 1st April 2025, the government has made some important changes in the TDS rules.
One of the key updates is the increase in threshold limits—this means tax will now be deducted only if the payment crosses a higher amount than before under various sections.
Here are the new relaxed threshold limits for TDS deduction:
| Section | Nature of Payment | TDS Threshold Till 31st March 2025 | TDS Threshold From 1st April 2025 |
|---|---|---|---|
| 193 | Interest on securities | NIL | ₹10,000 |
| 194A | Interest (Bank/PO/Co-op Society) | ₹50,000 (Senior Citizens) ₹40,000 (Others) |
₹1,00,000 (Senior Citizens) ₹50,000 (Others) |
| 194 | Dividend (Individual) | ₹5,000 | ₹10,000 |
| 194K | Income from Mutual Fund Units | ₹5,000 | ₹10,000 |
| 194B | Lottery/Crossword Winnings | ₹10,000 (Aggregate per FY) | ₹10,000 (Per Transaction) |
| 194BB | Horse Race Winnings | ₹10,000 (Aggregate per FY) | ₹10,000 (Per Transaction) |
| 194D | Insurance Commission | ₹15,000 | ₹20,000 |
| 194G | Lottery Commission | ₹15,000 | ₹20,000 |
| 194H | Brokerage/Commission | ₹15,000 | ₹20,000 |
| 194-I | Rent | ₹2,40,000 (Annual) | ₹50,000 (Monthly) |
| 194J | Professional/Technical Fees | ₹30,000 | ₹50,000 |
| 194LA | Enhanced Compensation | ₹2,50,000 | ₹5,00,000 |
TDS Rates for Residents – FY 2025–26
| Section | Nature of Transaction | Threshold Limit (₹) | TDS Rate |
|---|---|---|---|
| 192 | Payment of salary | Basic exemption limit | Slab Rates |
| 192A | Premature EPF withdrawal | 50,000 | 10% (with PAN), 20% (without PAN) |
| 193 | Interest on securities | 5,000 to 10,000 | 10% |
| 194 | Dividend to resident | 10,000 | 10% |
| 194A | Interest (banks/post offices) | 50,000/1,00,000 (Senior Citizens) | 10% |
| 194B | Lottery/Crossword winnings | 10,000 per transaction | 30% |
| 194BA | Online gaming income | No limit | 30% |
| 194BB | Horse race winnings | 10,000 | 30% |
| 194C | Contractor/Sub-contractor | 30,000 (single), 1 lakh (yearly) | 1% (Ind./HUF), 2% (Others) |
| 194D | Insurance Commission | 20,000 | 2% |
| 194DA | Life Insurance proceeds | 1,00,000 | 2% |
| 194EE | NSS withdrawal | 2,500 | 10% |
| 194G | Commission on lottery tickets | 20,000 | 2% |
| 194H | Commission or brokerage | 20,000 | 2% |
| 194-I(a) | Rent on plant & machinery | 50,000/month | 2% |
| 194-I(b) | Rent on land/building/furniture | 50,000/month | 10% |
| 194-IA | Immovable property purchase | 50 lakh | 1% |
| 194-IB | Rent by Ind./HUF (not in business) | 50,000/month | 2% |
| 194-IC | JDA Payments | No limit | 10% |
| 194J | Professional/Technical Fees | 50,000 | 10% / 2% (Technical) |
| 194K | Income from mutual fund units | 10,000 | 10% |
| 194LA | Compensation for property acquisition | 5 lakh | 10% |
| 194LBA | Trust distributions | No limit | 5% to 30% |
| 194LBB | Income from investment funds | No limit | 10% |
| 194LBC | Securitisation income (residents) | No limit | 10% |
| 194M | Certain payments by Ind./HUF | 50 lakh | 2% |
| 194N | Cash withdrawal | 20 lakh to 1 crore | 2% to 5% |
| 194O | E-commerce transactions | 5 lakh | 0.10% |
| 194P | Pension/Interest to 75+ Sr Citizens | Basic exemption limit | Normal slab rates |
| 194Q | Purchase of goods | 50 lakh | 0.10% |
| 194R | Perquisites to business/profession | 20,000 | 10% |
| 194S | Virtual Digital Assets | 10,000 / 50,000 | 1% |
| 194T | Partner’s Remuneration | 20,000 | 10% |
TDS Rate Chart – For Non Residents
| Section | Particulars | TDS Rate |
|---|---|---|
| 192 | Payment of salary | Normal Slab Rate |
| 192A | Premature withdrawal from EPF (No TDS if < ₹30,000) | 10% |
| 194B | Lottery, games, puzzles, etc. (Up to ₹10,000 – No TDS) | 30% |
| 194BB | Horse race winnings (Up to ₹10,000 – No TDS) | 30% |
| 194E | Non-resident sportsman/entertainer/association | 20% |
| 194EE | NSS account payments | 10% |
| 194G | Commission on lottery tickets (Up to ₹20,000 – No TDS) | 2% |
| 194LB | Interest from infrastructure debt fund | 5% |
| 194LBA(2) | Business trust interest from SPV | 5% |
| 194LBA(2) | Business trust dividend from SPV | 10% |
| 194LBA(3) | Rental income by business trust to unitholders | 30% |
| 194LBB | Income from investment fund to unitholder | 30% |
| 194LBC | Securitisation fund income | 30% |
| 194LC | Interest on foreign currency loan | 5% |
| 194LC | Interest on bonds in IFSC exchange | 4% |
| 194LD | Interest on rupee-denominated bonds to FII/QFI | 5% |
| 195 | Investment income by NRI | 20% |
| 195 | LTCG (u/s 115E for NRI) | 12.5% |
| 195 | LTCG (u/s 112(1)(c)(iii)) | 12.5% |
| 195 | LTCG (u/s 112A) | 12.5% |
| 195 | STCG (u/s 111A) | 20% |
| 195 | Other LTCG | 12.5% |
| 195 | Interest on foreign currency borrowings | 20% |
| 195 | Royalty (industrial policy agreement) | 20% |
| 195 | Royalty for copyright/software (Sec 115A) | 20% |
| 195 | Technical fees (industrial policy agreement) | 20% |
| 195 | Other income | 30% |
| 196B | Income from offshore fund units | 10% |
| 196B | LTCG on offshore fund units | 12.5% |
| 196C | Income from foreign currency bonds/GDR | 12.5% |
| 196D | FIIs (excluding dividend/capital gain) | 20% |
Conclusion
Knowing the TDS rates for FY 2025–26 is crucial for salaried individuals, businesses, freelancers, and professionals. Deducting and depositing TDS correctly ensures compliance and prevents penalties from the Income Tax Department. Always stay updated with the latest TDS provisions as notified by the CBDT.
