TDS Rate Chart: Complete Guide for 2025-26 Updates

Tax Deducted at Source (TDS) is an important part of India’s tax system. It means tax is deducted upfront from payments like salaries, rent, or professional fees. This helps the government collect taxes smoothly. Understanding the TDS (Tax Deducted at Source) rate chart is very important for both individuals and businesses to follow tax rules correctly. In this blog, you will learn about the TDS rates for the Financial Year 2024-25 (Assessment Year 2025-26) across different types of income like salaries, interest, dividends, and more. By reading this guide, you will get a clear and easy-to-understand overview of the TDS system and how it affects your money matters.

What is TDS?

Tax Deducted at Source (TDS) is a way the Indian government collects taxes directly when income is paid. When a payment is made, such as salary, rent, interest, or commission, the payer deducts a certain percentage as tax. This deducted amount is then sent to the government. TDS helps ensure taxes are collected promptly and reduces tax evasion. It plays an important role in keeping the tax system fair. Both the person paying and the person receiving the money should understand how TDS works in their daily financial transactions.

TDS must be deducted based on the rates notified by the Income Tax Department. The individual or business making the payment and deducting tax is known as the deductor. The person or entity receiving the payment after tax deduction is called the deductee.

What is the TDS Rate Chart?

A TDS (Tax Deducted at Source) rate chart is a detailed table that shows the tax deduction rates for different types of payments, as per the Income Tax Act 1961. It helps clarify how much tax needs to be deducted before making payments like salary, interest, rent, professional fees, or commission. The rates in the chart differ based on the type of payment and the category of the recipient, such as individuals, companies, non-residents, and more. This chart is updated every year during the Union Budget. It acts as a guide for taxpayers and deductors to follow tax rules correctly and avoid fines or legal trouble.

TDS Changes from 1st April, 2025

The government has revised the threshold limits for TDS deductions under different sections. Here are the following changes made in TDS provisions with effect from 1st April, 2025:

However, the government has introduced important updates to the TDS rules. Section 206AB, which increased compliance requirements for deductors, has been removed. The TDS rate for income received by residents from securitization trusts under Section 194LBC has been lowered to 10%. Additionally, from April 1, 2025, a new Section 194T will mandate a 10% TDS on the partner’s remuneration.

TDS Rate Chart - For Residents

Here are the TDS Rates Applicable for Payments Made to Residents, based on different types of income and transactions:

1. Section 192 – Salary payment: TDS as per applicable income tax slab; no fixed rate.
2. Section 192A – Premature EPF withdrawal above Rs. 50,000: TDS at 10% (with PAN), 20% (without PAN).
3. Section 193 – Interest on securities: TDS at 10% if interest exceeds Rs 5,000 (debentures), Rs. 10,000 (savings bonds/others).
4. Section 194 – Dividend income exceeding Rs 10,000: TDS at 10%.
5. Section 194A – Interest other than securities: TDS at 10% if interest exceeds Rs. 50,000 (others) or Rs. 1,00,000 (senior citizens).
6. Section 194B – Lottery, puzzle, card game winnings ≥ Rs. 10,000: TDS at 30%.
7. Section 194BA – Online gaming income (no threshold): TDS at 30%.
8. Section 194BB – Winnings from horse races ≥ Rs. 10,000 (aggregate in FY): TDS at 30%.
9. Section 194C – Payment to contractors/sub-contractors: TDS at 1% (individuals/HUFs), 2% (others) if single payment ≥ Rs. 30,000 or annual total ≥ Rs. 1,00,000.
10. Section 194D – Insurance commission above Rs. 20,000: TDS at 2%.
11. Section 194DA – Life insurance policy proceeds exceeding Rs. 1,00,000: TDS at 2%.
12. Section 194EE – NSS amount credited above Rs. 2,500: TDS at 10%.
13. Section 194G – Lottery ticket commission above Rs. 20,000: TDS at 2%.
14. Section 194H – Commission or brokerage exceeding Rs. 20,000: TDS at 2%.
15. Section 194-I – Rent: TDS at 2% (plant/machinery), 10% (land/building/furniture) if monthly rent ≥ Rs 50,000.
16. Section 194IA – Sale of immovable property (non-agricultural) above Rs. 50 lakhs: TDS at 1%.
17. Section 194IB – Rent paid by individual/HUF (not liable under 194-I) if monthly rent ≥ Rs. 50,000: TDS at 2%.
18. Section 194IC – Payment under Joint Development Agreement: TDS at 10% (no threshold).
19. Section 194J – Professional/technical fees, director fees above Rs. 50,000: TDS at 10% (general), 2% (technical/royalty).
20. Section 194K – Mutual fund income (dividend) above Rs. 10,000: TDS at 10%.
21. Section 194LA – Compensation for land/building acquisition above Rs. 5 lakhs: TDS at 10%.
22. Section 194LBA(1) – Income by business trust to unitholders: TDS at 10%.
23. Section 194LBA(2) – Interest from SPV to business trust: TDS at 5%.
24. Section 194LBA(2) – Dividend from SPV to business trust: TDS at 10%.
25. Section 194LBA(3) – Rental income from business trust to unitholders: TDS at 30%.
26. Section 194LBB – Income from investment funds to unitholders: TDS at 10%.
27. Section 194LBC – Income from securitization funds: TDS at 10%.
28. Section 194M – Specified payments by individuals/HUFs above Rs. 50 lakhs: TDS at 2%.
29. Section 194N – Cash withdrawals by non-ITR filers Rs. 20 lakhs–Rs 1 crore: TDS at 2%.
30. Section 194O – E-commerce payments exceeding Rs. 5 lakhs: TDS at 0.1%.
31. Section 194P – Pension/interest to senior citizens (≥75 years): TDS as per income tax slab.
32. Section 194Q – Purchase of goods above Rs. 50 lakhs: TDS at 0.1%.
33. Section 194R – Benefits/perquisites to business/profession above Rs 20,000: TDS at 10%.
34. Section 194S – Virtual Digital Assets (VDA) transfer above Rs. 10,000: TDS at 1%;the threshold for specified individuals/HUFs is Rs. 50,000.
35. Section 194T – Partner’s remuneration in firms/LLPs above Rs. 20,000: TDS at 10%.

This reorganized chart reflects the latest applicable TDS rates for residents on various payments, including thresholds and conditions. The rates align with recent government notifications and the Union Budget 2025-26 provisions.

TDS Rate Chart - For Non-Residents (Other than a Company)

Here are the TDS rates that apply when payments are made to non-residents. In most cases, there is no threshold limit, except under Section 192A:

1. Section 192 – TDS on salary to non-resident individuals: As per normal slab rates.
2. Section 192A – Premature withdrawal from EPF: 10% TDS (if withdrawal exceeds Rs. 30,000 and no TDS below this threshold).
3. Section 194B – Winnings from lotteries, card games, crossword puzzles, etc.: 30% TDS (no TDS if amount ≤ Rs 10,000 per transaction).
4. Section 194BB – Winnings from horse races: 30% TDS (no TDS if amount ≤ Rs. 10,000 per transaction).
5. Section 194E – Payment to non-resident sportsman, athlete, entertainer, or sports association: 20% TDS.
6. Section 194EE – Payment from National Savings Scheme (NSS): 10% TDS.
7. Section 194G – Commission on lottery ticket sales: 2% TDS (no TDS if amount ≤ Rs. 20,000).
8. Section 194LB – Interest on infrastructure debt fund: 5% TDS.
9. Section 194LBA(2) –

• Interest income from SPV distributed by a business trust: 5% TDS.
• Dividend income from SPV distributed by a business trust: 10% TDS.

10. Section 194LBA(3) – Rental income distributed by a business trust from real estate assets: 30% TDS.
11. Section 194LBB – Certain income paid by investment funds to unitholders: 30% TDS.
12. Section 194LBC – Income from investment in securitization fund: 30% TDS.
13. Section 194LC –

• Interest on foreign currency loans or long-term bonds: 5% TDS.
• If interest is on long-term bonds listed on the IFSC stock exchange: 4% TDS.

14. Section 194LD – Interest on rupee-denominated bonds to FIIs/QFIs: 5% TDS.
15. Section 195 – Payments to non-residents:

• Investment income: 20%
• LTCG under section 115E (for NRIs): 12.5%
• LTCG under section 112(1)(c)(iii): 12.5%
• LTCG under section 112A: 12.5%
• STCG under section 111A: 20%
• Any other LTCG: 12.5%
• Interest on money borrowed by the Govt. or Indian concern in foreign currency: 20%
• Royalty (industrial policy-related agreements): 20%
• Royalty for copyright/software under section 115A: 20%
• Fees for technical services (under industrial policy agreements): 20%
• Any other income: 30%

16. Section 196B –

• Income from units of offshore fund: 10% TDS.
• LTCG from the transfer of such units: 12.5% TDS.

17. Section 196C – Income (including LTCG) from foreign currency bonds or GDRs of Indian companies: 12.5% TDS.

18. Section 196D – Income (excluding dividends and capital gains) of Foreign Institutional Investors: 20% TDS.

TDS Rate Chart - For Domestic Companies

Here are the TDS rates for domestic companies:

1. Section 193: Interest on securities is subject to TDS at 10% if the amount exceeds Rs. 5,000.
2. Section 194: Dividend payments are subject to TDS at 10% if the amount exceeds Rs. 5,000.
3. Section 194A: Interest (other than interest on securities) is subject to TDS at 10% if the amount exceeds Rs. 5,000.
4. Section 194C: Payments to contractors or sub-contractors are subject to TDS at 2% if the amount exceeds Rs. 30,000 per contract or Rs. 1,00,000 in aggregate during the financial year.
5. Section 194D: Insurance commission payments are subject to TDS at 10% if the amount exceeds Rs 15,000.
6. Section 194DA: Payments under life insurance policies are subject to TDS at 5% on the income component if the amount exceeds Rs. 1,00,000.
7. Section 194EE: Payments from the National Savings Scheme (NSS) are subject to TDS at 10% if the amount exceeds Rs. 2,500.
8. Section 194G: Commission on the sale of lottery tickets is subject to TDS at 5% if the amount exceeds Rs. 15,000.
9. Section 194H: Commission or brokerage payments are subject to TDS at 5% if the amount exceeds Rs. 15,000.
10. Section 194I: Rent paid for plant and machinery is taxed at 2% TDS. For land, buildings, furniture, or fittings, 10% TDS applies if the yearly rent is over Rs. 2,40,000.
11. Section 194J: Fees for professional or technical services are subject to TDS at 10% if the amount exceeds Rs. 30,000.
12. Section 194K: Income from units of mutual funds is subject to TDS at 10% if the amount exceeds Rs. 5,000.
13. Section 194LA: Compensation on the acquisition of certain immovable property is subject to TDS at 10% if the amount exceeds Rs. 2,50,000.
14. Section 194LBA: Certain income distributed by a business trust to its unit holders is subject to TDS at 10%.
15. Section 194LBB: Income distributed by an investment fund to its unit holders is subject to TDS at 10%.
16. Section 194LBC: Income from investment in securitization trusts is subject to TDS at 25%.
17. Section 194M: Payments by individuals or HUFs for contractual work, commission, or brokerage exceeding Rs. 50,00,000 in a financial year are subject to TDS at 5%.
18. Section 194N: Cash withdrawals exceeding Rs. 1 crore in a financial year are subject to TDS at 2%.

19. Section 194O: Payments by e-commerce operators to e-commerce participants are subject to TDS at 1% if the amount exceeds Rs. 5,00,000.

20. Section 194Q: Purchase of goods exceeding Rs. 50,00,000 in a financial year is subject to TDS at 0.1%.
21. Section 194R: Benefits or perquisites provided in the course of business or profession are subject to TDS at 10% if the value exceeds Rs. 20,000.
22. Section 194S: Transfer of virtual digital assets is subject to TDS at 1% if the amount exceeds Rs 10,000.

TDS Rate Chart- For Foreign Companies

Here are the section-wise TDS rates for foreign companies, as per the provisions of the Income Tax Act, 1961:

1. Section 194B: TDS at the rate of 30% is applicable on income earned by foreign companies from lottery winnings, card games, crossword puzzles, and other similar games. However, no TDS is required if the amount does not exceed Rs 10,000 per transaction.
2. Section 194BB: TDS at 30% is applicable on income from horse race winnings for foreign companies. If the aggregate winnings do not exceed Rs 10,000 in a financial year, no TDS needs to be deducted.
3. Section 194E: Payments to a non-resident sportsman, athlete, entertainer, or sports association that is not an Indian citizen attract TDS at the rate of 20%.
4. Section 194G: TDS at 2% applies to payments made as commission or similar charges on the sale of lottery tickets to foreign companies. No TDS is required if the payment is up to Rs 20,000.
5. Section 194LB: TDS at 5% applies to payments made by way of interest to foreign companies in respect of borrowings made by infrastructure debt funds or business trusts from non-residents.
6. Section 194LBA (3): If a business trust distributes interest income received from an SPV to its unitholders, TDS is deducted at 5%. If dividend income is distributed under similar circumstances, TDS is deducted at 10%. However, if the business trust distributes income in the nature of rent from real estate assets owned directly, TDS is deducted at 40%.
7. Section 194LBB: TDS at 40% is applicable on certain income paid by an investment fund to its unitholders, where such income is taxable in the hands of the unitholder.
8. Section 194LBC: Income paid to foreign companies from securitization funds is subject to TDS at the rate of 40%.
9. Section 194LC: If an Indian company or business trust pays interest to a foreign company on a loan taken in foreign currency or on long-term bonds, TDS is applicable at 5%. If the interest is paid on long-term bonds listed on a recognized stock exchange in an IFSC, the TDS rate is reduced to 4%.
10. Section 194LD: TDS at 5% is applicable on interest payments on rupee-denominated bonds made to Foreign Institutional Investors (FIIs) or Qualified Foreign Investors (QFIs).
11. Section 195: This section covers a wide range of payments to foreign companies. The TDS rates are as follows:

• Long-term capital gains (LTCG) under section 112(1)(c)(iii): 12.5%.
• LTCG under section 112A: 12.5%.
• Short-term capital gains (STCG) under section 111A: 20%.
• Other LTCG not covered above: 12.5%.
• Interest on money borrowed in foreign currency: 20%.
• Royalty income: 20%.
• Fees for technical services in line with industrial policy: 20%.
• Any other income not specified: 35%.

12. Section 196B: TDS is deducted at 10% on income received from units of offshore funds by foreign companies. If the income is in the form of LTCG on the transfer of such units, the applicable TDS rate is 12.5%.
13. Section 196C: TDS at 10% is applicable on income earned by foreign companies from foreign currency bonds or Global Depository Receipts (GDRs) of an Indian company. If the income is in the form of LTCG on transfer of such securities, TDS is applicable at 12.5%.
14. Section 196D: TDS at 20% applies to income (excluding dividends and capital gains) earned by Foreign Institutional Investors (FIIs).

However, there is no threshold limit for TDS deduction when payments are made to foreign companies. TDS is to be deducted irrespective of the amount paid.

Recent Amendments and Budget 2025 Highlights: TDS Updates

The Union Budget 2025-26 brought major updates to the Tax Deducted at Source (TDS) system to make tax filing easier and reduce the burden on taxpayers. These amendments, outlined in the Finance Bill 2025, took effect from April 1, 2025.

Here is a detailed explanation:

1. Increased TDS Threshold for Rent Payments

The TDS threshold under Section 194-I increases from Rs 2.4 lakh to Rs 6 lakh per year. This means if the total annual rent is ?6 lakh or less, no TDS applies. This change helps individuals and small businesses who pay rent under the earlier limit. They do not need to deduct or deposit tax anymore. It reduces paperwork and makes rent payments easier to manage.

2. Higher TDS Exemption Limit for Senior Citizens

Section 194A now allows senior citizens to earn up to Rs 1 lakh in interest income without facing any TDS. Earlier, the exemption was only Rs 50,000. This update benefits retired individuals who depend on interest from fixed deposits and savings schemes. They now retain more income in hand and face fewer tax deductions.

3. Reduction in TDS Rates for Insurance Commission

The TDS rate on insurance commission under Section 194D comes down from 5% to 2%. This reduction benefits insurance agents, who often earn a commission on policies sold. The lower tax rate increases their take-home income and supports the growth of the insurance industry.

4. Rationalization of TDS Rates and Thresholds

The budget proposes fewer TDS rates and limits across different sections. This makes it easier for taxpayers to understand when and how much TDS applies. It avoids confusion, especially for small businesses and individuals. With uniform rules, the tax deduction process becomes more transparent and simple to follow.

5. Decriminalization of TDS Payment Delays

The budget removes criminal penalties for delays in TDS payments, as long as the pending amount is paid before the income tax return filing deadline. This provides relief to businesses and individuals who miss deadlines due to genuine issues. They no longer face strict legal consequences for minor delays but still must clear dues on time.

6. Omission of Sections 206AB and 206CCA

Sections 206AB and 206CCA earlier imposed higher TDS and TCS rates on people who did not file income tax returns. These sections are now removed. This simplifies the TDS process and reduces extra checks for deductors. It also makes it easier for new or occasional taxpayers to manage tax deductions without facing higher rates.

These changes make the TDS system simpler, fairer, and more friendly for taxpayers. They reduce confusion, support better compliance, and help different sections of society like senior citizens, small businesses, and professionals.

Conclusion

The updated TDS framework for FY 2024-25, introduced in the Union Budget 2025-26, shows the government’s effort to simplify tax compliance. It offers real relief to taxpayers through higher thresholds and lower rates. The removal of strict penalties makes the system easier to follow. These reforms promote ease of doing business and ensure a fairer and more efficient taxation system for all stakeholders. If you want to file TDS return, contact Online Legal India to get help.