TDS Rate Chart For FY 2025-26 (AY 2026-27)

TDS or Tax Deducted at Source aids in reducing revenue evasion. It facilitates the real-time collection of taxes as income is received. The threshold limit for TDS (Tax Deducted at Source) under the Income Tax Act in India varies depending on the specific section under which the TDS is deducted. For example, under Section 194C, for contractual payments, the threshold limit is capped at ₹1,00,000 per financial year or ₹30,000 per payment (whichever is lower). In some cases, the threshold limit is higher for certain types of payees, such as government entities or specified persons (those with turnover below certain limits).

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What is TDS?

Tax Deducted at Source (TDS) is a way for tax to be paid throughout the year. Under this process, the person or business making a payment, such as for a salary or rent, must cut a small, defined portion for tax. This collected amount is then deposited with the government on the recipient’s behalf.

Since different payments require different tax rates, the payer must refer to a TDS section list. This is the official chart that provides the correct tax percentages for various types of transactions, ensuring accuracy and proper compliance.

What is TDS Rate Chart?

Think of a TDS rate chart as a simple guide for tax deductions. It’s a table that tells you exactly what percentage of tax to cut for different kinds of payments. The correct rate can actually change depending on who you are paying, what the payment is for, and how much it is. The chart shows you all these different rates.

It also lists the tax law section and the minimum payment amount that requires a deduction. Payers use this information to do things right and stay compliant. The guide you’ll find below is up-to-date and includes the TDS rate chart changes, making it accurate for the 2025-26 financial year.

TDS Rate Chart FY 2025-26 (AY 2026-27) for Salary and Retirement-Related Payments

When it comes to salary, premature EPF withdrawals, or other retirement-related payments, the tax deduction rules are quite specific. The amount of tax to be deducted at source by your employer or the fund manager is determined based on your income slab and whether you have provided your PAN details.

This TDS chart below outlines the rates applicable for such payments during the financial year 2025-26. It serves as a clear guide for both employers and employees to understand their tax obligations.

Section of the Income Tax Act	Nature of Payment	TDS Rate	Threshold Limit
Section 192	Payment of Salary	At slab rates	The basic exemption limit
Section 192A	Premature withdrawal from Employees’ Provident Fund (EPF)	10% (If PAN is provided)	₹50,000

TDS Rate Chart FY 2025-26 (AY 2026-27) for Interest Income and Dividends

TDS is also applied to income from interest and dividends. Unlike salary, these deductions use a fixed percentage and are not based on progressive TDS slab rates. The specific rate depends on the source of the income, such as from securities or bank deposits.

The chart below details these rates for the 2025-26 financial year.

Section of the Income Tax Act	Nature of Payment	TDS Rate	Threshold Limit
Section 193	Interest on Securities	10%	₹10,000
Section 194	Dividends	10%	₹10,000
Section 194A	Interest on bank/post office deposits	10%	₹50,000
Section 194A	Interest on deposits (Senior Citizen)	10%	₹1,00,000
Interest (Others)	10%	₹10,000
Section 194K	Dividend from Mutual Funds	10%	₹10,000

TDS Rate Chart FY 2025-26 (AY 2026-27) for Lottery, Gambling, and Gaming Winnings

Winnings from activities like lotteries, crossword puzzles, horse races, or online games are taxed at a high, flat rate with no minimum exemption limit. This TDS percentage chart clearly shows the single, straightforward rate that applies to all such earnings for the 2025-26 financial year.

Section of the Income Tax Act	Nature of Payment	TDS Rate	Threshold Limit
Section 194B	Winnings from Lotteries, Crossword Puzzles, etc.	30%	₹10,000
Section 194BA	Winnings from Online Games	30%	-
Section 194BB	Winnings from Horse Races	30%	₹10,000

TDS Rate Chart FY 2025-26 (AY 2026-27) for Contractor, Subcontractor and Commission Payments

Payments made to contractors, subcontractors, or for various types of commissions are also covered by tax deduction rules. Unlike some other categories, the rates for these payments can differ depending on whether the recipient is an individual or a different type of entity. This TDS section chart provides a clear breakdown of these specific rates for the 2025-26 financial year.

Section of the Income Tax Act	Nature of Transaction	Threshold Limit	TDS Rate (Indv/HUF)	TDS Rate (Others)
Section 194C	Payment to contractors or sub-contractors	₹30,000 (Single Transaction) or ₹1 Lakh (In a FY)	1%	2%
Section 194D	Insurance Commission	₹20,000	2%	10%
Section 194DA	Payment received – Life Insurance Policy	₹1 Lakh	2%	2%
Section 194EE	Payment received – National Savings Scheme (NSS)	₹2,500	10%	10%
Section 194G	Lottery Commission	₹20,000	2%	2%
Section 194H	Commission/Brokerage	₹20,000	2%	2%

TDS Rate Chart FY 2025-26 (AY 2026-27) for Professional Services and Royalties

Payments for professional services and royalties have specific tax deduction rules. It’s important for payers to be aware of the correct percentages, particularly any revised TDS rates, to ensure proper tax compliance. The applicable rate depends on the specific nature of the service provided.

The chart below breaks down these rates for the 2025-26 financial year.

Section of the Income Tax Act	Nature of Transaction	Threshold Limit	TDS Rate
Section 194J(a)	Fees – Technical Services, Call Centre, Royalty, Distribution / Exhibition of Cinematography Films, etc.	₹50,000	2%
Section 194J(b)	Fees – All other Professional Services	₹50,000	10%

TDS Rate Chart FY 2025-26 (AY 2026-27) for Rent Payments

Tax deduction at source also applies to different types of rent payments. The tax rate varies depending on whether the rent is for property like land and buildings or for plant and machinery. This current TDS rate chart clarifies the specific rates and thresholds for each scenario during the 2025-26 financial year.

Section of the Income Tax Act	Nature of Transaction	Threshold Limit	TDS Rate
Section 194I(a)	Rent for Plant & Machinery	₹50,000	2%
Section 194I(b)	Rent of Land, Building & Furniture	₹50,000	10%
Section 194IA	Transfer of certain immovable property other than agricultural land	₹50 lakh	1%
Section 194IB	Rent payment by Individual / HUF not covered u/s 194I	₹50,000 per month	2%
Section 194IC	Payment under specified Joint Development Agreement	-	10%

TDS Rate Chart FY 2025-26 (AY 2026-27) for Other Payments

Beyond common categories like salary and rent, TDS rules also apply to a wide variety of other transactions. These can include everything from e-commerce sales and property compensation to large cash withdrawals. This latest TDS rate chart covers these specific scenarios to ensure all payments are handled correctly for the 2025-26 financial year.

Section of the Income Tax Act	Nature of Transaction	Threshold Limit	TDS Rate (Indv/HUF)	TDS Rate (Others)
Section 194LA	Compensation on transfer of certain immovable property other than agricultural land	₹5 lakh	10%	10%
Section 194LB	Income by way of interest from infrastructure debt fund (non-resident)	-	5%	5%
Section 194LBA	Certain income from units of a business trust	-	10%	10%
Section 194LBB	Income in respect of investment of investment fund	-	10% for residents, 30% for non-residents	10% for residents, 40% for non-residents
Section 194LBC	Income in respect of investment in securitization trust	-	10% for residents, 40% for non-residents, 10% for Individual & HUF	10% for residents, 40% for non-residents, 10% for Individual & HUF
Section 194M	Payment made for Contracts, Brokerage or Professional Fees etc. by Individual and HUF	₹50 lakh	2%	2%
Section 194N	Cash withdrawal in excess of ₹1 crore during the previous year from 1 or more account with a bank or co-operative society	₹1 Crore (₹3 Crores, if withdrawal is by co-operative society)	2%	2%
Section 194N	Cash withdrawal if ITR not filed for previous 3 years	₹20 Lakh	2% (₹20 Lakh - 1 Crore), 5% (₹1 Crore and above)	2% (₹20 Lakh - 1 Crore), 5% (₹1 Crore and above)
Section 194O	TDS on e-commerce participants	₹5 lakh	0.1%	0.1%
Section 194P	TDS in case of Specified Senior Citizen (above 75 years) having Salary & Interest (ITR not required)	-	Slab Rates	NA
Section 194Q	TDS on Purchase of Goods exceeding ₹50 Lakh	₹50 lakh	0.1%	0.1%
Section 194R	Benefits or perquisites of business or profession	₹20,000	10%	10%
Section 194S	Payment of consideration for transfer of virtual digital asset by persons other than specified person	₹10,000	1%	1%
Section 194S	Payment of consideration for transfer of virtual digital asset by specified person	₹50,000	1%	1%
Section 194T	Payments by Partnership Firms to Partners	₹20,000	10%	10%

Note: When PAN is not available, the TDS rate is a flat 20% (if TDS applicable is lower than 20%).

TDS Rate Chart for Foreign Companies

The rules for deducting tax at source are different when making payments to foreign companies. For most transactions, TDS must be deducted regardless of the payment amount, as threshold limits often do not apply. This new TDS rate chart details the specific tax percentages applicable for various types of payments to foreign entities for the 2025-26 financial year.

Section of the Income Tax Act	Particulars	TDS Rate
Section 194B	Income by way of lottery winnings, card games, etc. (Up to ₹10,000 per transaction – No TDS)	30%
Section 194BB	Income by way of horse race winnings (Up to ₹10,000 per transaction – No TDS)	30%
Section 194E	Payment to non-resident sportsmen, entertainers, or sports associations	20%
Section 194G	Commission, etc., on the sale of lottery tickets (Up to ₹20,000 – No TDS)	2%
Section 194LB	Compensation on acquisition of certain immovable property	5%
Section 194LBA(3)	Interest income from SPV to a business trust	5%
	Dividend income from SPV to a business trust	10%
	Rental income from real estate assets owned by a business trust	40%
Section 194LBB	Income from an investment fund to a unitholder	40%
Section 194LBC	Income from investment in a securitization fund	40%
Section 194LC	Interest payment for loan borrowed in foreign currency by Indian company or business trust (loan agreement or long-term bonds)	5%
Section 194LC	If interest is payable against long-term bonds listed in a recognized stock exchange in IFSC	4%
Section 194LD	Interest on rupee-denominated bonds to FIIs or QFIs	5%
Section 195	Income by way of LTCG under section 112(1)(c)(iii)	12.5%
	Income by way of LTCG under section 112A	12.5%
	Income by way of STCG under section 111A	20%
	Any other income by way of LTCG	12.5%
	Interest on foreign currency borrowing by government or Indian concern	20%
	Income by way of royalty	20%
	Income from technical fees related to industrial policy	20%
Section 195	Any other income	35%
Section 196B	Income from units of an offshore fund	10%
Section 196B	Long-term Capital Gain on transfer of units of an offshore fund	12.5%
Section 196C	Income from foreign currency bonds or GDR of an Indian company	10%
Section 196C	LTCG on foreign currency bonds or GDR of an Indian company	12.5%
Section 196D	Income (excluding dividend and capital gain) from Foreign Institutional Investors	20%

Note: When the amount is paid to foreign companies, there is no threshold limit for TDS deduction. TDS will be deducted irrespective of the amount paid.

Budget 2025: Key TDS Changes For FY 2025-26

Budget 2025 introduced several important updates to TDS provisions, impacting the threshold limits for many types of payments. The TDS rate chart changes 2025 are designed to adjust these limits and simplify compliance. Below is a summary of the key changes taking effect from 1st April, 2025.

Section of the Income Tax Act	Till 31st March, 2025	From 1st April, 2025
193 - Interest on securities	NIL	₹10,000
194A - Interest other than on securities	When payer is bank, cooperative society or post office: (i) ₹50,000 for senior citizen (ii) ₹40,000 in case of others	When payer is bank, cooperative society or post office: (i) ₹1,00,000 for senior citizen (ii) ₹50,000 in case of others
194A - Interest other than on securities	In case the payer is others: (i) ₹5,000	In case the payer is others: (i) ₹10,000
194 - Dividend (for an individual shareholder)	₹5,000	₹10,000
194K - Income in respect of units of a mutual fund	₹5,000	₹10,000
194B - Winnings from lottery, crossword puzzle etc.	Aggregate of amounts exceeding ₹10,000 during the financial year	₹10,000 in respect of a single transaction
194BB - Winnings from horse race	Aggregate of amounts exceeding ₹10,000 during the financial year	₹10,000 in respect of a single transaction
194D - Insurance commission	₹15,000	₹20,000
194G - Commission, prize etc. on lottery tickets	₹15,000	₹20,000
194H - Commission or brokerage	₹15,000	₹20,000
194-I - Rent	₹2,40,000 (in a financial year)	₹50,000 (in a month)
194J - Fee for professional or technical services	₹30,000	₹50,000
194LA - Income by way of enhanced compensation	₹2,50,000	₹5,00,000

Other Notable Changes:

Removal of Section 206AB, which placed an added compliance burden on TDS deductors.
The TDS rate for Section 194LBC (income from investment in securitization trusts for residents) has been reduced to 10%.
With effect from 1st April, 2025, a new section 194T is inserted, wherein TDS has to be deducted on a partner’s remuneration at 10%.

Consequences of Failing to Deduct or Submit the TDS

Failing to deduct or deposit TDS can lead to serious consequences for the deductor, including:

Disallowance of Expense

As per Income Tax Act sections 40(a)(i) and 40(a)(ia), if TDS is not deducted or deposited correctly, the expense (except salary) may be disallowed as a deduction, increasing your taxable income and potentially your tax liability. It applies to both resident and non-resident recipients.

However, if you rectify the mistake by deducting or depositing the tax in a subsequent year, the deduction may be allowed that year.

Interest Charges

Under Section 201, failing to deduct or deposit TDS makes you an “assessee-in-default,” liable to pay interest:

1% per month from the due date of deduction to the date of deduction
1.5% per month from the due date of deduction to the date of actual payment

Penalty

Section 271C allows the authorities to impose a penalty equal to the amount of tax not deducted or deposited.

To Sum it Up

Knowing the threshold limits for TDS under the Income Tax Act is crucial for all taxpayers. It helps in efficient tax planning for your final liability or a potential TDS refund, and ensures adherence to legal requirements. As tax regulations may change, consulting tax professionals or referring to official government notifications for the latest information is advisable. Individuals and businesses can contribute to a transparent and robust tax system by staying informed and compliant.

FAQs on Threshold Limit for TDS Under the Income Tax Act

What is the salary exemption limit for TDS?

For TDS on salary, the exemption limit is the same as the basic exemption limit in the Income Tax slabs. If your estimated annual income is below this limit after considering all deductions, your employer will not deduct any tax. For the financial year 2025-26, this limit is generally ₹3 lakh under the new tax regime.

How can I avoid TDS deductions if my income is below the threshold?

If your total income for the year is below the taxable limit, you can prevent TDS on payments like interest by submitting Form 15G (for individuals below 60) or Form 15H (for senior citizens) to the payer (e.g., your bank). Even if a payment is listed on a TDS deduction chart, these forms certify that your income is not taxable, so no deduction is required.

What are the key changes in TDS rates effective from April 2025?

The main changes from April 2025 involve increased threshold limits. For example, the TDS limit for interest paid by banks to senior citizens is now ₹1 lakh. Limits for rent, insurance commission, and professional fees have also been raised. Additionally, the compliance burden under Section 206AB has been removed, and a new Section 194T for partner remuneration has been introduced.

What is the rate of TDS for casual income?

Casual income, such as winnings from lotteries, online games, or horse races, is taxed at a flat rate of 30%. This rate applies if your winnings exceed the specified threshold for that category.

What is the TDS rate for commission?

For general commission or brokerage under Section 194H, the TDS rate is 2%. For insurance commission under Section 194D, the rate is 2% for individuals and 10% for other entities.

What is the TDS rate for NRI?

There is no single TDS rate for Non-Resident Indians (NRIs). The rate varies significantly based on the nature of the income. For instance, it can be 5% for interest on certain infrastructure bonds, 20% for royalties or professional fees, and 35% for any other income not specified elsewhere.

What is the TDS rate for professional fees?

Under Section 194J, TDS on professional fees is 10%. However, for fees related to technical services, call centres, or royalties from cinematograph films, a lower rate of 2% is applicable.

What is the TDS rate for sale of property?

For the sale of immovable property (other than agricultural land), the TDS rate is 1% of the sale price. This deduction applies if the transaction value is ₹50 lakh or more.

How to check TDS deducted using PAN number?

You can easily check all TDS deducted against your PAN number by viewing your Form 26AS. This is your annual tax statement, which is available on the Income Tax e-filing portal. Simply log in, navigate to the ‘e-File’ menu, select ‘View Form 26AS’, and you will be able to see a consolidated record of all taxes paid on your behalf.