TDS Rate Chart 2025-26
Complete TDS rate chart for FY 2025-26. Section-wise TDS rates for salary, rent, professional fees, e-commerce, interest, and more. Updated for the latest Finance Act amendments.
Tax Deducted at Source (TDS) is one of the most common compliance requirements for Indian businesses. Whether you're paying contractors, rent, professional fees, or operating an e-commerce marketplace, you may be required to deduct TDS and deposit it with the government. Getting the rate wrong — or failing to deduct at all — leads to interest, penalties, and disallowance of expenses.
TDS Rate Chart FY 2025-26
| Section | Nature of Payment | Threshold (₹) | TDS Rate — Individual/HUF | TDS Rate — Company |
|---|---|---|---|---|
| 192 | Salary (as per slab) | Basic exemption limit | As per income tax slab | — |
| 194A | Interest (banks/post office) | 40,000 (50,000 for seniors) | 10% | 10% |
| 194A | Interest (others) | 5,000 | 10% | 10% |
| 194C | Payment to contractor (single) | 30,000 | 1% | 2% |
| 194C | Payment to contractor (aggregate FY) | 1,00,000 | 1% | 2% |
| 194D | Insurance commission | 15,000 | 5% | 10% |
| 194G | Commission on lottery tickets | 15,000 | 5% | 5% |
| 194H | Commission or brokerage | 15,000 | 5% | 5% |
| 194I(a) | Rent — plant, machinery, equipment | 2,40,000/year | 2% | 2% |
| 194I(b) | Rent — land, building, furniture | 2,40,000/year | 10% | 10% |
| 194J | Professional / technical fees | 30,000 | 10% (2% for technical) | 10% (2% for technical) |
| 194LA | Compulsory acquisition of immovable property | 2,50,000 | 10% | 10% |
| 194N | Cash withdrawal | 1 crore (20L if no ITR filed) | 2% / 5% | 2% / 5% |
| 194O | E-commerce sales through operator | 5,00,000 (individual/HUF) | 1% | 1% |
| 194Q | Purchase of goods | 50,00,000 | 0.1% | 0.1% |
| 206C(1H) | TCS on sale of goods | 50,00,000 | 0.1% | 0.1% |
Note: If PAN is not provided, TDS is deducted at 20% or the applicable rate — whichever is higher (Section 206AA).
TCS Rates — Tax Collected at Source
| Section | Nature of Transaction | Rate |
|---|---|---|
| 206C(1) | Sale of scrap, tendu leaves, timber, forest produce | 1–2.5% |
| 206C(1C) | Parking lot, toll plaza, mining and quarrying | 2% |
| 206C(1F) | Sale of motor vehicles > ₹10 lakh | 1% |
| 206C(1G) | Remittance abroad under LRS | 5% (20% over ₹7 lakh) |
| 206C(1H) | Sale of goods > ₹50 lakh/year | 0.1% |
Key TDS Rules Every Business Must Know
1. Deduct on credit or payment — whichever is earlier If you credit a vendor's account (e.g., provision entry in books) before actually paying, TDS must be deducted at the time of crediting, not payment.
2. Deposit by 7th of the following month TDS deducted must be deposited to the government by the 7th of the next month (except March: deadline is 30 April for government deductors, 30 April for non-government deductors).
3. File TDS returns quarterly
- Form 24Q — for salary TDS
- Form 26Q — for non-salary payments (domestic)
- Form 27Q — for payments to non-residents
- Quarterly due dates: 31 July, 31 October, 31 January, 31 May
4. Issue TDS certificates
- Form 16 (salary) — annually by 15 June
- Form 16A (non-salary) — within 15 days of the TDS return due date
5. TRACES reconciliation Payees claim TDS credit via Form 26AS. Ensure PAN is correctly quoted in all challans and returns — mismatches cause credit rejection for your vendors.
Consequences of TDS Non-Compliance
| Issue | Consequence |
|---|---|
| Non-deduction | Interest 1% per month + penalty up to 100% of TDS under Section 271C |
| Non-deposit after deduction | Interest 1.5% per month |
| Late filing of TDS return | ₹200/day under Section 234E (min ₹10,000 to max TDS amount) |
| Incorrect PAN | 20% TDS rate applies; expense disallowed under Section 40(a) |
Frequently Asked Questions
Q. Is TDS deduction mandatory for all businesses? No. The obligation to deduct TDS applies to specific categories of payers: companies, government entities, and individuals/HUFs who had their accounts audited under Section 44AB in the preceding year. Small businesses below the audit threshold are generally exempt, with some exceptions (like Section 194O for e-commerce operators).
Q. What is the difference between TDS and TCS? TDS is deducted by the payer at the time of making a payment. TCS is collected by the seller at the time of receiving payment (on specified goods/transactions). Both flow to the recipient's Form 26AS credit.
Q. How do I verify that TDS has been deposited by the deductor? Check Form 26AS on the Income Tax portal or use TRACES. The entry will reflect once the deductor files their quarterly TDS return and the challan is matched.
Related Resources
Frequently Asked Questions
What is TDS?+
Tax Deducted at Source (TDS) is a mechanism where the payer deducts tax at the time of making a payment and deposits it with the government on behalf of the payee. It is governed by Chapter XVII-B of the Income Tax Act, 1961.
What happens if TDS is not deducted?+
If TDS is not deducted when required, the payer is treated as an assessee-in-default. They become liable for the TDS amount itself, plus interest at 1% per month for non-deduction and 1.5% per month for non-deposit, along with a penalty equal to the TDS amount under Section 271C.
What is the TDS rate on e-commerce sales under Section 194O?+
Under Section 194O, e-commerce operators must deduct TDS at 1% on the gross amount of sales made by sellers through their platform. The threshold is ₹5 lakh per year for individual/HUF sellers with a PAN.
When must TDS be deducted — at the time of payment or credit?+
TDS must be deducted at the time of credit or payment, whichever is earlier. So if you credit a vendor's account before actually paying, TDS must be deducted at the time of crediting.