TDS Rate Chart 2024-25 & 2025-26 | Updated Tax Deducted at Source Slabs & Limits
Tax Deducted at Source (TDS) is a very important compliance system under the Income Tax Act of 1961, designed to facilitate tax collection directly from the source of income. Taxpayers, businesses, and professionals need to be aware of the relevant TDS rates to avoid penalties and engage in effective tax planning. This article, "TDS Rate Chart 2024-25 & 2025-26 | Updated Tax Deducted at Source Slabs & Limits," offers a detailed overview of the current TDS rates for various payments, such as salaries, interest, rent, professional fees, and other income types. Keep yourself informed about the latest updates in TDS regulations to ensure smooth tax compliance in the upcoming financial years.
What is The Tax Deducted at Source (TDS)
The Tax Deducted at Source (TDS) system was introduced with the objective of ensuring tax collection at the very origin of income generation. This mechanism serves as a method of tax enforcement by mandating that a certain percentage of tax be deducted by the payer at the time of making specific payments. Under this concept, any individual or entity (known as the deductor) responsible for disbursing payments of a specified category—such as salaries, interest, professional fees, rent, commission, or contractual payments—must deduct tax before transferring the payment to the recipient (referred to as the deductee).
Once the tax is deducted, the deductor is obligated to deposit the deducted amount into the Central Government’s account within the prescribed timeline. This ensures a steady flow of revenue to the government while reducing the chances of tax evasion. The individual or entity whose income has been subjected to TDS can claim a credit for the tax deducted. This is facilitated through Form 26AS, which is a consolidated tax statement reflecting the TDS details, or through the TDS certificate (Form 16 or 16A) provided by the deductor. The deductee can adjust the deducted amount against their total tax liability while filing their income tax return, ensuring that they are not taxed twice on the same income.
Important TDS Updates from Budget 2025
Budget 2025 brings important changes in TDS rates for specific payments to enhance business operations and improve taxpayer compliance. These revised TDS rates will take effect from April 1, 2025. The table below outlines the affected payments, the corresponding TDS rate changes, and the new applicable rates.
The Union Budget 2025 has proposed the following revisions to the TDS rate chart
| Section | Present (Rs.) | Proposed (Rs.) From 1April 2025 |
|---|---|---|
| 193 – Interest on securities | NIL | 10,000 |
| 194A – Interest other than interest on securities | 50,000/- for senior citizen | 1,00,000/- for senior citizen |
| 40,000/- in case of others when banks, cooperative societies and post office pays TDS | 50,000/- in case of others when banks, cooperative societies and post office pays TDS | |
| 5,000/- in other cases | 10,000/- in other cases | |
| 194 – Dividend for an individual shareholder | 5,000 | 10,000 |
| 194K – Income in respect of mutual fund units | 5,000 | 10,000 |
| 194B – Winnings from lottery, crossword puzzle and | Aggregate of amounts exceeding 10,000/- during the financial year | 10,000/- in respect of a single transaction |
| 194BB – Winnings from horse race | ||
| 194D – Insurance commission | 15,000 | 20,000 |
| 194G – Income by way of commission, prize on lottery tickets | 15,000 | 20,000 |
| 194H – Commission or brokerage | 15,000 | 20,000 |
| 194-I – Rent | 2,40,000 (during a financial year) | 6,00,000 (during a financial year) |
| 194J – Fee for professional or technical services | 30,000 | 50,000 |
| 194LA – Income by way of enhanced compensation | 2,50,000 | 5,00,000 |
| 206C(1G) – Remittance under LRS and overseas tour program package | 7,00,000 | 10,00,000 |
Notes: If a taxpayer does not furnish their PAN card details, they will be subject to higher rates of Tax Deducted at Source (TDS), as mandated by tax regulations. The increased TDS rates serve as a compliance measure to ensure proper tax reporting and documentation. On the other hand, if a taxpayer provides valid PAN details, the standard TDS rates, as prescribed under the applicable tax laws, will be applied.
The TDS rate chart presented above clearly outlines the applicable tax deduction rates based on whether the taxpayer has submitted their PAN details. This distinction is crucial because the absence of a PAN can lead to significantly higher deductions, impacting the taxpayer’s cash flow and overall tax liability. Therefore, taxpayers are advised to ensure that their PAN details are correctly provided to avoid excessive TDS deductions.
Existing TDS Rate Chart for FY 2024-2025
| - | Section and Nature of Payment | TDS Rate |
|---|---|---|
| - | Section192-Income from Salary | As per the slab rates |
| - | Section 192A-Premature EPF withdrawal | 10% (30% in case PAN is unavailable) |
| - | Section193-Interest on securities | 10% |
| - | Section 194-Dividend | 10% |
| - | Section 194A-Interest earned other than securities | 10% |
| - | -Interest that is earned apart from post office/bank securities | 10% |
| - | Section 194B-Income earned from card games, lotteries, and/or other games | 30% |
| - | Section 194BB-Earnings from horse races | 30% |
| - | Section 194D-Insurance commission | 5% |
| - | Section 194DA- Life insurance policy payments | 2% (w.e.f. 01.10.2024) |
| - | Section 194E-If payments are made to sportsmen who are non-residents | 20% |
| - | Section 194EE-In case NSS deposits are sold | 10% |
| - | Section 194F- Payment towards repurchase of units by Unit Trust of India or Mutual Funds | 20% ((The provisions of this section are not applicable with effect from 01-10-2024) |
| - | Section 194G-Any commission received from the sale of lottery tickets | 2% (w.e.f. 01.10.2024) |
| - | Section 194H- Brokerage or Commission | 2% |
| - | Section 194I-Plant & Machinery (Rent) | 2% |
| -Furniture, Building or Land (Rent) | 10% | |
| - | Section 194IA-Transfer of Immovable Property (excluding agricultural land) | 1% |
| - | Section 194IB-Rent paid by HUF/Individual not required to conduct tax audit | 2% ((w.e.f. 01.10.2024) |
| - | Section 194IC-In case monetary compensation is paid (Joint Development Agreements) | 10% |
| - | Section 194J-Fee paid for technical services | 2% |
| Section 194J-Fee paid for professional services | 10% | |
| - | Section 194LA-Compensation paid in case of immovable property purchase | 10% |
| - | Section 194LB-Interest that is earned from an Infrastructure Bond (NRI) | 4%-5%-9% |
| - | Section 194LBB-Investment fund paying income to the unit holder (except for incomes that are exempt under Section 10 (23FBB)) | 10% |
| - | Section 194LBC-Income generated from investments in securitisation trust (as per Section 115TCA) | 25% (in case of HUF)-30%(in other case) |
| - | Section 194LD-Interest in certain government securities and bonds | 5% |
| - | Section 194N-mandates TDS on cash withdrawals exceeding Rs. 1 crore (Rs. 3 crores for co-operatives) at 2%. For those who haven’t filed ITR for three years, TDS applies at 2% beyond Rs. 20 lakhs and 5% beyond Rs. 1 crore | 2% |
| - | Section 194Q-Goods purchased | 0.10% |
| - | Section 194P-For senior citizens who are above 75 years | As per the slab rates |
| - | Section 194S-Virtual Digital Assets payment | 1% |
| - | Section 206AA-In case PAN is not available | 20% of the rate in force or double the rate as per the act, whichever is higher |
| - | Section 206AB-In case ITR is not filed at higher rates | Double the rate (as per the act) or 5% (whichever is higher) of the rate in force |
TDS Rate Chart for Non-Resident Indians
Below is the TDS section-wise chart for NRIs (Non-Resident Indians):
| - | Section and Nature of Payment | TDS Percentage | |
|---|---|---|---|
| - | Section 192- Salary payment | Normal slab rate | |
| - | Section 192A- Payment of accumulated balance of provident fund | 10% | |
| - | Section194B-Income received from winning lotteries, crossword puzzles, card games and other games | 30% | |
| - | Section 194BB- Income received from winning horse races | 30% | |
| - | Section 194E-Payment to a non-resident sportsman (including an athlete), an entertainer (not a citizen of India) or a non-resident sports association | 20% | |
| - | Section 194EE-Payment under the National Savings Scheme | 10% | |
| - | Section 194F-Payment on repurchase of Mutual Fund or Unit Trust of India | 20% | |
| - | Section 194G-Commission on the sale of lottery tickets | 5% | |
| - | Section 194LB- Infrastructure debt fund interest | 5% | |
| - | Section 194LBA(3)- Interest income distribution by a Business Trust | 30% | |
| - | Section 194BB- Distribution of income by an Investment Fund other than income which is exempt under Section 10(23FBB) | 30% | |
| - | Section 194LBC- Distribution of income by a Securitisation Trust under Section 115TCA of the Income Tax Act, 1961 | 30% | |
| - | Section 194LC- Interest income from Indian company on funds borrowed in international currency | 4%-5%-9% | |
| - | Section 194LD-Interest income on certain government securities and rupee-denominated bonds | 5% |
TDS deduction chart for domestic companies
The table below shows the TDS percentage for different types of payments.
| - | Section and Nature of Payment | TDS Percentage |
|---|---|---|
| - | Section 193- Interest on securities (Any security of the State or Central Government; Securities or debentures for money issued by any local authority established by a State, Central, or Provincial Act; Any debenture issued by a company; Interest charged on any other security) | 10% |
| - | Section 194- Dividend payment | 10% |
| - | Section 194A- Income by way of interest other than Interest on Securities | 10% |
| - | Section 194B-Income received from winning card games, lottery or crossword puzzles | 30% |
| - | Section 194BB- Income received by winning horse race | 30% |
| - | Section 194C- Payment made to contractor/ subcontractor/ HUF (Hindu Undivided Family)/ Individuals/ Others | 1% to 2% |
| - | Section 194D- Insurance Commission | 10% |
| - | Section 194DA-Payment of any amount in respect of a life insurance policy with effect from 1st September 2019, the insurer will deduct tax on the income portion compromised in the insurance payout | 5% |
| - | Section 194EE- Payment of funds in a person’s National Savings Scheme (NSS) | 10% |
| - | Section 194F- Amount payable for a Unit Trust of India (UTI) or Mutual Fund to repurchase a unit | 20% |
| - | Section 194G- Payment like commissions on sale of lottery tickets | 5% |
| - | Section 194H- Brokerage or Commission | 2% |
| - | Section 194-IA- Transfer of certain movable property, excluding agricultural land, in exchange for payment | 1% |
| - | Section 194-IC- Payment under Joint Development Agreements (JDA) to HUF/ Individual | 10% |
| - | Section 194J- Any sum paid by way of fees for professional or technical services | 2% or 10% |
| - | Section 194K-Income in respect of units payable to resident person | 10% |
| - | Section 194LA- Payment of compensation on acquisition of certain immovable property | 10% |
| - | Section 194LBA(1)- A business trust may transfer certain income to its unitholder. | 10% |
| - | Section 194LLB- A certain amount of income given to an unitholder in relation to their investment fund units. | 10% |
| - | Section 194LBC- Income from investment from securitisation of funds | 10% |
| - | Section 194M- Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who is not liable to deduct TDS under sections 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when the aggregate sum credited or paid during a financial year exceeds ₹50 lakh. | 2% |
| - | Section 194N- Cash withdrawal during the previous year from one or more accounts maintained by a person with a banking company, cooperative society engaged in the business of banking or a post office | 2% or 5% |
| - | Section 194O- Payment or credit of amount by the e-commerce operator to e-commerce participant | 0.10% |
| - | Section 194Q- Payment to a resident for purchase of goods of the aggregate value exceeding ₹50 lakh | 0.10% |
TDS Rate Chart for Foreign Companies
| - | Section and Nature of Payment | TDS Percentage |
|---|---|---|
| - | Section 194B- Income for winning lottery, card games, crossword puzzles, and others | 30% |
| - | Section 194BB- Income received from horse race-winning | 30% |
| - | Section194E- Payment to a non-resident Indian sports association, sportsperson, performer, or entertainer | 20% |
| - | Section 194G- Payments of commission on the sale of lottery tickets | 2% |
| - | Section 194LB- Payment of interest on infrastructure debt fund | 5% |
| - | Section 194LBA(2)- Payment of the nature referred to in Section 10(23FC)(a) and | 5% |
| - | -Payment of the nature referred to in Section 10(23FC)(b) | 10% |
| - | Section 194LBA(3)- Business trust shall deduct tax while distributing any income received from renting or leasing or letting out any real estate asset owned directly by it to its unit holders. | 40% |
| - | Section 194LLB- Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB) | 40% |
| - | Section 194LLC-Income in respect of investment made in a securitisation trust (specified in Explanation of section 115TCA) | 40% |
| - | Section 194LC -Loan interest payment, borrowed in foreign currency by an Indian company or business trust against a loan agreement or the issue of long-term bonds. If interest is payable against long-term bonds listed in recognised stock exchange in IFSC | 5%-4% |
| - | Section 194LD-Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of the issue of long-term bonds (including long-term infrastructure bonds) | 4%-5%-9% |
| - | Section 195-Payment of any other amount | 10% or 12.5% |
Conclusion
The TDS rate chart serves as a crucial reference for understanding tax deductions across various income categories, including salaries, interest earnings, and other specified payments. It provides a structured overview of applicable rates and thresholds, ensuring compliance with tax regulations.
By referring to the latest TDS rate chart, both individuals and businesses can make informed financial decisions, optimize tax planning, and prevent unnecessary deductions. Staying updated with current TDS rates is essential to avoid penalties, enhance financial management, and ensure smooth tax compliance.
FAQs on Tax Deducted at Source (TDS)
1. What is Tax Deducted at Source (TDS)?
Tax Deducted at Source (TDS) is a mechanism under the Income Tax Act of 1961 where tax is deducted at the origin of income. The payer deducts a specified percentage of tax before making payments like salaries, rent, professional fees, and more. The deducted tax is then deposited with the government.
2. What are the TDS updates proposed in Budget 2025?
Budget 2025 introduced significant changes to TDS rates effective from April 1, 2025. For example, the TDS exemption limit for interest on securities under Section 193 increased to Rs.10,000. The limit for professional fees (Section 194J) was also raised from Rs. 30,000 to Rs.50,000.
3. How are higher TDS rates applied if PAN details are not provided?
If a taxpayer fails to furnish PAN details, they will be subject to higher TDS rates under Section 206AA. In such cases, the applicable TDS rate is either 20% or double the normal rate, whichever is higher, to ensure tax compliance.
4. How can taxpayers claim TDS credits?
Taxpayers can claim TDS credits by referring to Form 26AS, which reflects the deducted tax. Alternatively, they can use Form 16 or Form 16A provided by the deductor. These credits can be adjusted against the total tax liability when filing the income tax return.
5. What is the TDS rate for payments to Non-Resident Indians (NRIs)?
For NRIs, TDS rates vary based on the type of income. For example, winnings from lotteries or horse races are taxed at 30%, while payments to non-resident sportsmen are subject to a 20% TDS rate. Interest on infrastructure debt funds is taxed at 5%.