Tax Deducted at Source (TDS) is a crucial concept for businesses operating in India. It's a mechanism where the tax liability is deducted at the source of income by the payer before disbursing the payment to the recipient. This deducted amount is then deposited to the government's account. Understanding TDS rates and keeping yourself updated with the latest changes are essential for accurate financial management.
In this article, we will explore the TDS rate charts for the financial year (FY) 2024-25 (Assessment Year 2025-26), we will also discuss the various income categories, applicable rates, and recent updates, helping you navigate the system effectively.
What is a TDS Rate Chart?
A TDS rate chart is a reference table outlining the different types of income subject to TDS and the corresponding tax deduction rates. These rates are determined by the Income Tax Act of India and are periodically revised by the government. Referring to an accurate and updated TDS rate chart ensures you comply with tax regulations and avoid potential penalties.
Understanding TDS Rate Components
TDS rate charts typically categorize income sources and provide the corresponding TDS rate for each category. They may also differentiate rates based on factors like:
- Nature of Payment: The type of income being paid determines the applicable TDS rate. Common examples include salaries, interest income, professional fees, rent payments, etc
- PAN Status: Whether the recipient (deductee) provides a Permanent Account Number (PAN) significantly impacts the TDS rate. Not having a PAN typically attracts a higher deduction rate
- Tax Residency: The residency status of the recipient (resident or non-resident) plays a role in determining the TDS rate
The Importance of TDS Rate Charts
TDS rate charts serve as a reference point for both deductors and deductees. They specify the applicable tax rate to be deducted at source for various income streams. Knowing the correct TDS rate ensures:
Compliance: Following the prescribed TDS rates guarantees adherence to tax regulations, minimizing the risk of penalties and interest charges for non-compliance.
Accurate Tax Calculations: Both deductors and deductees can use the chart to estimate their tax liabilities, enabling them to plan their finances effectively.
Easier Tax Filing: By understanding the TDS already deducted, deductees can accurately calculate their final tax liability while filing their income tax returns.
Who Deducts TDS?
The responsibility of deducting TDS falls on the deductor, which can be:
- Individuals or HUFs (Hindu Undivided Families) making specified payments
- Companies
- Government agencies
- Local authorities
The deductor is obligated to deduct TDS only if the payment exceeds the prescribed threshold limit set by the Income Tax Act.
Types of Income Subject to TDS
TDS applies to a wide range of income sources, including:
- TDS rate on salary income
- Interest income (bank deposits, fixed deposits, etc.)
- TDS rate on rent income
- TDS rates on commission payments
- Professional fees
- Payments to contractors
- Payments for the sale of immovable property
- Winnings from lottery, puzzles, etc.
- Dividend income (except for certain cases)
- Repurchase of debentures
TDS Rate Chart for Financial Year 2024-25
Section |
Type of Payment |
Threshold TDS Rate Limit (₹) |
Individual/HUF Rate (%) |
Others
Rate (%) |
192 |
Salaries |
Rs. 2,50,000 |
TDS Slab Rates |
TDS Slab Rates |
192A |
Premature EPF withdrawal* |
Rs. 50,000 |
10% |
10% |
193 |
Interest on securities |
Rs. 10,000 |
10% |
10% |
194 |
Dividend Payment |
Rs. 5,000 |
10% |
10% |
194A |
Interest on deposits |
Rs. 40,000
Rs. 50,000 (For senior citizens) |
10% |
10% |
194A |
Interest by others apart from on securities |
Rs. 5,000 |
10% |
10% |
194B |
Winnings (Lottery, Puzzles, Games) |
Aggregate of Rs. 10,000** |
30% |
30% |
194BB |
Winnings from horse races |
Rs. 10,000 |
30% |
30% |
194C |
Contractor/Sub-contractor Payments – Single Payments |
Rs. 30,000 |
1% |
2% |
194C |
Contractor/sub-contractor Payments – Aggregate Payments |
Rs. 1,00,000 |
1% |
2% |
194D |
Insurance commission payment to domestic companies |
Rs. 15,000 |
NA |
10% |
194D |
Insurance commission payments to other companies |
Rs. 15,000 |
5% TDS rate on salary |
NA |
194DA |
Life Insurance Maturity |
Rs. 1,00,000 |
5% |
5% |
194EE |
Payment of an amount standing to the credit of an individual under NSS (National Savings Scheme) |
Rs. 2500 |
10% |
10% |
194F |
Payment of repurchase of unit by UTI (Unit Trust of India) or any mutual fund |
No Limit |
20% |
20% |
194G |
Payments or commission on sale of lottery tickets |
Rs. 15,000 |
5% |
5% |
194H |
TDS rates on commission or brokerage |
Rs. 15,000 |
5% |
5% |
194I |
TDS rate on rent of land, building, or furniture |
Rs. 2,40,000 |
10% |
10% |
194I |
TDS rate on 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 |
TDS rate on rent payment that is made by an individual or HUF not covered under payment 194I |
Rs. 50,000 (per month) |
5% |
NA |
194IC |
Payment that are made under Joint Development Agreement (JDA) to Individual/HUF |
No Limit |
10% |
10% |
194J |
Fees paid for professional services |
Rs. 30,000 |
10% |
10% |
194J |
Paid for technical services |
Rs. 30,000 |
2% |
2% |
194J |
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 eg.- dividends |
Rs. 5,000 |
10% |
10% |
194LA |
Payment for compensation for acquiring certain immovable property |
Rs. 2,50,000 |
10% |
10% |
194LB |
Interest payment on infrastructure bonds to Non-Resident Indians |
NA |
5% |
5% |
194LBA(1) |
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 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 |
Instances where cash withdrawal over a certain amount takes place from the bank, and ITR is filed |
Rs. 1,00,00,000 |
2% |
2% |
194N |
Instances where cash withdrawal takes place from a bank and one does not file an 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 for the purchase of goods |
Rs. 50,00,000 |
0.10% |
0.10% |
194S |
TDS on crypto or other virtual asset payment |
NA |
1% |
1% |
206AA |
TDS for no PAN |
NA |
At a rate higher than
|
20% |
206AB |
Income tax return non-filers |
NA |
Rate higher of:
|
Gurgaon Mumbai Pune Bengaluru