TDS stands for Tax Deducted at Source. In simpler words it is the collection of taxes by the Indian government at the source of income. It is the tax collected by the payer on income while paying/crediting to the payee and depositing the same to the government on payee’s behalf. The motive behind introduction of TDS was to reduce tax evasion by the payee.
TDS is applicable to various incomes like salary, rent, dividend, asset sales, etc. and is an important part of Income Tax compliance. TDS has to be deducted at the rates prescribed by the tax department. Below you’ll find the TDS rate chart, which summarizes all the TDS provisions of the Income Tax Act.
Budget 2025 Update
- The threshold for TDS on rent has been increased from Rs.2.4 lakhs per year to Rs.6 lakhs per year.
- The threshold for TDS on senior citizen interest income has been increased from Rs.50,000 to Rs.1,00,000.
What is TDS?
The procedure of TDS was implemented by the Indian government to collect taxes at the source of income. A certain percentage of tax is deducted by the payer at the time of making payments to the receiver, and this amount is then remitted to the government.
TDS has to be deducted at the rates prescribed by the tax department. The company or person that makes the payment after deducting TDS is called a deductor and the company or person receiving the payment is called the deducted.
It is applicable to a wide range of income categories such as salaries, interest on fixed deposits, rent, commissions, etc. TDS helps prevent tax evasion and understanding it is crucial for both payers and receivers of income in India.
TDS on Payment to Partners by Firm under Section 194T
Starting from April 1, 2025, if a firm makes any payments to its partners, it must deduct TDS at 10% if the payment amount exceeds the threshold limit of 20,000. These payments include salary, remuneration, bonus, commission, and interest.
Note: TDS is not applicable to the drawings and the capital repayment to the partners. But TDS applies to the interest on capital or borrowings from partners.
What is TDS rate chart?
TDS rate chart is a chart or document that contains the rates at which tax is to be deducted at the source from various incomes like salaries, interest, rent, professional fees etc. These rates may vary depending on the nature of income and the status of the recipient such as individual, company etc. among other factors.
The following tables list the various TDS rates applicable to resident and non-resident payments as well as TDS rates on domestic and foreign companies in India. Any person paying income is responsible to deduct tax at source and deposit TDS within the stipulated due date.
TDS Rate Chart for FY 2025-26
| TDS Section List | Nature of Payment | Threshold | Individual or HUF | Others |
| 192 | Payment in form of salary | ₹ 2,50,000 | Slab Rates | Slab Rates |
| 192A | Employee Provident Fund withdrawal prematurely/early | ₹ 50,000 | 10% | `10% |
| 193 | Interest earned on securities including listed debentures and other securities | ₹ 10,000 | 10% | `10% |
| 194 | Payment of dividends by domestic Co. | ₹ 10,000 | 10% | `10% |
| 194A | Interest on deposits from banks or post offices Interest income other than securities | ₹ 50,000 ₹ 1,00,000 (senior citizen) ₹ 10,000 | 10% 10% | `10% 10% |
| 194B | Winnings of Lotteries, Puzzles or Games (Casual income) | 10,000 in a single transaction | 30% | 30% |
| 194BA | Winnings from online Games | _ | 30% | 30% |
| 194BB | Winnings from Horse races | 10,000 in a single transaction | 30% | 30% |
| 194C | Payments made to contractors or sub-contractors (one time) Payments made to contractors or sub-contractors on an aggregate basis | ₹ 30,000 ₹ 1,00,000 | 1% 1% | 2% 2% |
| 194D | Commission paid on insurance sales to domestic companies Commission paid on insurance sales to non-domestic companies | ₹ 20,000 ₹ 20,000 | Not Applicable 5% | 10% Not Aplicable |
| 194DA | Maturity of life insurance policy | ₹ 1,00,000 | 2% | 2% |
| 194EE | Payment received from the National Savings Scheme by individuals | ₹ 2,500 | 10% | 10% |
| 194G | Payments or commission made from the sale of lottery tickets | ₹ 20,000 | 2% | 2% |
| 194H | Commission or brokerage fees | ₹ 20,000 | 2% | 2% |
| 194I | Rent paid for land, building, or furniture Rent paid for plant and machinery | ₹ 50,000 per month i.e. 6,00,000 in a financial year | 10% 2% | 10% 2% |
| 194IA | Payment for the transfer of immovable property excluding agricultural land | ₹ 50,00,000 | 1% | 1% |
| 194IB | Rent payment made by an individual or HUF not covered under section 194I | ₹ 50,000 (per month) | 2% | Not Applicable |
| 194IC | Payments made under a Joint Development Agreement to I / HUF | No Limit | 10% | 10% |
| 194J | Fees paid for professional and technical services (doctor/CA etc.) Royalty paid for the sale, distribution, or exhibition of cinematographic films | ₹ 50,000 ₹ 50,000 | 10% 2% | 10% 2% |
| 194K | Income received from units of a mutual fund, such as dividends | ₹ 10,000 | 10% | 10% |
| 194LA | Compensation for acquiring certain immovable property | ₹ 5,00,000 | 10% | 10% |
| 194LB | Interest on infrastructure bonds to Non-Resident Indians | Not Applicable | 5% | 5% |
| 194LBA(1) | Distribution of certain income by a business trust to its unit holders | Not Applicable | 10% | 10% |
| 194LD | Interest payment on rupee-denominated bonds, municipal debt security, and government securities | Not Applicable | 5% | 5% |
| 194M | Payments made for contracts, brokerage, commission, or professional fees excluding sections 194C, 194H, 194J- Individual/HUF | ₹ 50,00,000 | 2% | 2% |
| 194N | Cash withdrawal exceeding a specified amount from the bank, with filed ITR When ITR is not filed | ₹ 1,00,00,000 ₹ 50,00,000 | 2% 2% then 5% after 1cr on slab basis | 2% 2% then 5% after 1cr on slab basis |
| 194O | Amount received for the sale of products/services by e-commerce service providers through digital platforms | ₹ 5,00,000 | 0.1% | 0.1% |
| 194P | Senior citizen above 75 yr of age having salary and interest Income, ITR not required | Not Applicable | Slab Rates | Not Applicable |
| 194Q | Payments made for the purchase of goods | ₹ 50,00,000 | 0.10% | 0.10% |
| 194R | Perquisite provided | ₹ 20,000 | 10% | 10% |
| 194S | TDS on the payment of crypto currencies or other virtual assets | ₹ 50,000 (specified person) ₹ 10,000 (others) | 1% | 1% |
| 194T | TDS on payments made by firms to their partners | ₹ 20,000 | Not Applicable | 10% |
| 206AA | TDS applicable in case of non-availability of PAN | Not Applicable | At a higher rate than:-2X the rate specified by the act-20%-The currently applicable rate | At a higher rate than:-2X the rate specified by the act-20%-The currently applicable rate |
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