- Article 9: TDS Rate Chart for FY 2025-26: Every Section, Every Rate, and the Changes You Cannot Miss
- Article 10: TDS on Salary India: Section 192, Form 16 Explained, and How to Avoid Short Deduction
- Article 11: TDS on Professional Fees Section 194J: The Complete Guide for Freelancers and Consultants
- Article 12: TCS on Foreign Remittance India: LRS Rates, Thresholds, and What Changed in 2024-25
TDS Rate Chart for FY 2025-26: Every Section, Every Rate, and the Changes You Cannot Miss
Introduction: why TDS rates matter more than most people think
TDS is not just the employer deducting from your salary. It is a pervasive mechanism that affects every payment above a threshold — rent, professional fees, contractor work, interest, commission, property purchase. Get the rate wrong and you face a short-deduction demand plus 1% interest per month. Get the section wrong and the deductee cannot claim credit properly. And from FY 2025-26, there are meaningful changes — new sections, revised thresholds, rate cuts — that make updating your reference chart a non-negotiable April ritual.
This article gives you the current FY 2025-26 rates for every major TDS section, the changes that are new this year, and the two overarching rules (PAN requirement and treatment of GST) that affect every section.
Key changes effective from 1 April 2025
| What changed for FY 2025-26 Section 194J threshold: Raised from ₹30,000 to ₹50,000 annually (professional fees, technical services, royalty, director fees). Section 194H: Rate cut to 2% (from 5%), threshold raised to ₹20,000. Applied from 1 October 2024, carried forward. Section 194IB: Rent by non-audit individuals/HUF — rate cut to 2% from 5%, threshold ₹50,000 per month. Effective 1 October 2024. Section 194T (NEW): TDS at 10% on partner remuneration, salary, commission, interest by firms/LLPs above ₹20,000 per partner per year. From 1 April 2025. Section 194A: Threshold for bank/cooperative interest raised to ₹50,000 (general) and ₹1,00,000 for senior citizens. Section 194I (Rent): Threshold clarified at ₹50,000 per month (not per year). Rates unchanged: 2% (plant/machinery), 10% (land/building/furniture). |
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The complete TDS rate chart — major sections for FY 2025-26
Salary and salary-like payments
| Section | Nature of payment | Threshold | Rate |
|---|---|---|---|
| 192 | Salary (all employers) | Basic exemption limit | Slab rates (new or old regime) |
| 192A | Premature EPF withdrawal | ₹50,000 | 10% (20% without PAN) |
| 194T (NEW) | Partner remuneration/salary in firm/LLP | ₹20,000 per year per partner | 10% |
Interest income
| Section | Nature of payment | Threshold | Rate |
|---|---|---|---|
| 194A | Interest other than on securities — bank/cooperative/post office | ₹50,000 (₹1,00,000 for senior citizens) | 10% |
| 194A | Interest from other sources (e.g., company FDs) | ₹10,000 | 10% |
| 194LC | Interest from Indian company to non-resident under specified bonds | No threshold | 5% |
Contractor and professional payments
| Section | Nature of payment | Threshold | Rate |
|---|---|---|---|
| 194C | Payment to contractor — individual/HUF | ₹30,000 single / ₹1,00,000 annual | 1% |
| 194C | Payment to contractor — company/firm | ₹30,000 single / ₹1,00,000 annual | 2% |
| 194J | Professional services (doctor, lawyer, architect, CA, engineer, consultant) | ₹50,000 annual | 10% |
| 194J | Technical services (software support, maintenance, technical testing) | ₹50,000 annual | 2% |
| 194J | Royalty (literary, artistic, scientific) | ₹50,000 annual | 10% |
| 194J | Director fees (non-salary) | No threshold | 10% |
| 194M | Payment by individual/HUF (non-audit) under 194C, 194H, 194J | ₹50,00,000 annual aggregate | 2% |
Rent and property
| Section | Nature of payment | Threshold | Rate |
|---|---|---|---|
| 194I(a) | Rent — plant, machinery, equipment | ₹50,000 per month | 2% |
| 194I(b) | Rent — land, building, furniture, fittings | ₹50,000 per month | 10% |
| 194IB | Rent by individual/HUF (not under audit) for residential/commercial | ₹50,000 per month | 2% |
| 194IA | Purchase of immovable property (by buyer) | Property value > ₹50 lakh | 1% |
Commission, brokerage, dividend, and others
| Section | Nature of payment | Threshold | Rate |
|---|---|---|---|
| 194H | Commission or brokerage | ₹20,000 annual | 2% |
| 194 | Dividend from domestic company | ₹5,000 annual | 10% |
| 194B | Lottery/crossword winnings | ₹10,000 per transaction | 30% |
| 194BB | Horse race winnings | ₹10,000 per transaction | 30% |
| 194D | Insurance commission | ₹20,000 annual | 5% |
| 194DA | Life insurance maturity payment | ₹1,00,000 per year | 5% (on income component only) |
| 194G | Commission on sale of lottery tickets | ₹20,000 | 5% |
| 194K | Mutual fund income distribution (dividends) | ₹5,000 per year | 10% |
Special payments
| Section | Nature of payment | Threshold | Rate |
|---|---|---|---|
| 194N | Cash withdrawal from bank (cooperative society) | ₹3 crore (cooperative); ₹1 crore others | 2% |
| 194N | Cash withdrawal by non-ITR filers (≥3 yr) | ₹20 lakh | 2-5% as applicable |
| 194O | E-commerce operator — TCS on seller sales via platform | ₹5 lakh per seller | 0.1% |
| 194Q | Purchase of goods by buyer (turnover > ₹10 crore) | Goods purchase > ₹50 lakh per seller/year | 0.1% |
| 194R | Benefit or perquisite in business/profession | ₹20,000 per recipient per year | 10% |
| 194S | Transfer of Virtual Digital Asset (crypto/NFT) | No threshold (certain) | 1% |
| 194LA | Compensation for land acquisition (not notified) | ₹5,00,000 per payment | 10% |
| *"The PAN rule is more expensive than the wrong section. A 194J rate error costs 8% extra (10% vs 2%). A missing PAN error costs 20% when the rate is 2%. Collect PAN at onboarding, not after payment."* |
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The two overarching rules that apply to every section
Rule 1: TDS without PAN — Section 206AA
If the deductee does not furnish a valid PAN, TDS must be deducted at the higher of: (a) the applicable rate in the relevant section, (b) the rate in force under the Act, or (c) 20%. In practice, this converts most professional and contractor TDS into a 20% deduction. The deductee can claim this as credit in their ITR, but it creates cash flow pain.
| Section | Normal rate | Rate without PAN |
|---|---|---|
| 194C (contractor, individual) | 1% | 20% |
| 194J (technical services) | 2% | 20% |
| 194J (professional services) | 10% | 20% |
| 194H (commission) | 2% | 20% |
| 194A (interest) | 10% | 20% |
| 194I (rent — building) | 10% | 20% |
Rule 2: No TDS on the GST component of invoices
CBDT has clarified that TDS under the Income Tax Act should be deducted on the invoice amount excluding GST. If a professional bills ₹80,000 + ₹14,400 GST = ₹94,400, TDS under 194J is calculated on ₹80,000 only (₹8,000 at 10%), not ₹94,400. This assumes the GST amount is separately indicated on the invoice. If the invoice does not break out GST, TDS is deducted on the full amount.
TDS deposit and return due dates for FY 2025-26
| Obligation | Due date |
|---|---|
| Monthly TDS deposit (non-government) | 7th of following month |
| March TDS deposit (all deductors) | 30th April 2026 |
| Q1 TDS return (April–June 2025) — 24Q, 26Q | 31 July 2025 |
| Q2 TDS return (July–September 2025) — 24Q, 26Q | 31 October 2025 |
| Q3 TDS return (October–December 2025) — 24Q, 26Q | 31 January 2026 |
| Q4 TDS return (January–March 2026) — 24Q, 26Q | 31 May 2026 |
| Form 16 (salary TDS certificate) for AY 2026-27 | 15 June 2026 |
| Form 16A (non-salary TDS certificate) | 15 days after quarterly return due date |
Worked example 1: Manisha pays a freelance consultant ₹75,000
Manisha runs a boutique marketing agency in Pune. She pays Arjun, a freelance digital marketing consultant (not a company), ₹75,000 in Q1 FY 2025-26 — his first payment this year. His PAN is on file.
| Step | Value |
|---|---|
| Section applicable | 194J — professional services (marketing/consulting) |
| Threshold for 194J | ₹50,000 per year |
| Year-to-date payments to Arjun before this | ₹0 |
| Does this payment cross ₹50,000? | Yes — ₹75,000 > ₹50,000 |
| TDS rate | 10% (professional services) |
| TDS to be deducted | 10% of ₹75,000 = ₹7,500 |
| Arjun receives | ₹75,000 − ₹7,500 = ₹67,500 |
| Manisha deposits ₹7,500 to government by | 7th of following month |
In Q2, Manisha pays Arjun another ₹40,000. Year-to-date aggregate: ₹1,15,000 — already past the ₹50,000 threshold. TDS: 10% of ₹40,000 = ₹4,000. She deposits this by the 7th of the next month and includes it in her Q2 Form 26Q return (due 31 October 2025).
Worked example 2: Rohan, property owner, rents office space at ₹60,000 per month
Deepak runs a Bengaluru startup that rents 2,000 sq ft of commercial office space from Rohan at ₹60,000 per month. His accounts are audited — so Section 194I applies (not 194IB).
| Step | Value |
|---|---|
| Section applicable | 194I(b) — land and building |
| Monthly rent | ₹60,000 |
| Threshold | ₹50,000 per month — exceeded |
| TDS rate | 10% |
| Monthly TDS | 10% of ₹60,000 = ₹6,000 |
| Amount paid to Rohan | ₹60,000 − ₹6,000 = ₹54,000 |
| Deepak deposits ₹6,000 by | 7th of following month |
| Rohan gets credit in Form 26AS | After Deepak files 26Q quarterly return |
| What Rohan must do Rohan declares ₹7,20,000 (₹60,000 × 12) as rental income in his ITR. He claims ₹72,000 TDS credit (12 months × ₹6,000) from Form 26AS. His tax liability after 30% slab and standard 30% deduction on rent income nets out; TDS already paid reduces final payable. If TDS credit is not reflecting in 26AS, Rohan should check whether Deepak filed the quarterly 26Q returns correctly. |
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Common mistakes deductors make
Mistake 1: Deducting TDS on individual transactions without checking the annual aggregate
Section 194J triggers at ₹50,000 annual aggregate, not per invoice. If you pay a consultant ₹30,000 in April and another ₹25,000 in June (total ₹55,000), TDS should have been deducted from the June payment when the aggregate crossed ₹50,000. Many deductors incorrectly assume each payment is evaluated independently.
Mistake 2: Using 194J for software product purchases
Paying for a SaaS subscription (Zoho, Freshdesk, QuickBooks) is a purchase of goods/software product, not professional services. Historically there was confusion. The current understanding is that payment for pre-packaged software is a royalty under 194J (10%), while customised software development contracts under 194C (1-2%) or 194J for technical services (2%) applies — depending on the nature. Get clarity from your CA on recurring software vendor payments.
Mistake 3: Not deducting 194T on partner remuneration
New from 1 April 2025. Every partnership firm and LLP now must deduct TDS at 10% on salary, remuneration, bonus, commission, or interest paid to a partner above ₹20,000 per year. Many firms missed this in Q1 and discovered the shortfall later. If you are in a firm and received remuneration without TDS deduction since April 2025, ask your firm to comply retroactively — and factor the credit into your advance tax planning.
Mistake 4: Not depositing TDS before the 7th
Interest under Section 201(1A): 1% per month for failure to deduct, and 1.5% per month for failure to deposit after deduction. On a ₹50,000 deduction left undeposited for 3 months, that is ₹2,250 of interest — on top of the original liability. It accumulates faster than most business owners expect.
A practical takeaway: the April update drill
Every April, spend 30 minutes updating your vendor master with the new TDS rate chart. Flag any vendor where the rate changed (194H is now 2%, 194IB is now 2%, 194J threshold is ₹50,000). Validate PANs on the Income Tax portal. And if you are in a partnership firm, set up 194T deduction in your payroll for partner drawings. This one annual hour prevents penalty notices year-round.
Key Takeaways
- Section 194J threshold raised from ₹30,000 to ₹50,000 annually for professional fees, technical services, and royalty — effective 1 April 2025.
- Section 194H (commission and brokerage) rate cut from 5% to 2%, and threshold raised to ₹20,000 — effective 1 October 2024 and continuing into FY 2025-26.
- New Section 194T: TDS at 10% on payments above ₹20,000 per year by partnership firms and LLPs to partners — from 1 April 2025.
- Section 194IB (rent by non-audit individuals/HUF): rate revised to 2% from 5% effective 1 October 2024.
- No PAN rule (Section 206AA): TDS at 20% or double the applicable rate if the deductee does not provide a valid PAN.
- TDS deposit due date is the 7th of the following month; quarterly TDS return (24Q/26Q) due dates are 31 July, 31 October, 31 January, and 31 May.
Frequently Asked Questions
What is the TDS rate on professional fees under Section 194J for FY 2025-26?
Under Section 194J, TDS is deducted at 10% on payments for professional services (like legal, medical, architectural, consulting) and at 2% for technical services (like software support, maintenance contracts). The threshold from 1 April 2025 is ₹50,000 per financial year per payee. If the payment or aggregate payments to a single professional in a year cross ₹50,000, TDS must be deducted on the entire amount — not just the excess.
What is the TDS rate for contractor payments under Section 194C?
Section 194C TDS is 1% for payments to individual contractors and HUFs, and 2% for payments to firms and companies. The threshold is ₹30,000 per single contract or ₹1,00,000 aggregate payments in a financial year. If either limit is crossed, TDS applies on the full amount paid in that transaction (not just the excess over the threshold).
What happens if a deductee does not provide PAN?
Under Section 206AA, if the deductee does not provide a valid PAN, TDS must be deducted at the higher of: (a) the rate specified in the relevant section, (b) the rate or rates in force, or (c) 20%. In practice, this means most non-salary TDS sections jump to 20% without PAN. For salaried employees, tax is deducted at slab rates without PAN benefit, which effectively means higher deduction.
What is Section 194T, and who does it affect?
Section 194T was introduced effective 1 April 2025. It requires partnership firms and LLPs to deduct TDS at 10% on any payment to a partner — including salary, remuneration, commission, bonus, or interest — that exceeds ₹20,000 in a financial year. This is new and affects all professional firms, LLPs, and trading partnerships. Partners receiving remuneration from their firm will now have TDS reflected in their Form 26AS.
Is TDS applicable on GST in invoices?
No. TDS under the Income Tax Act is deducted on the payment excluding the GST component. If a contractor bills ₹1,00,000 plus ₹18,000 GST = ₹1,18,000, TDS under Section 194C is calculated on ₹1,00,000 — not ₹1,18,000. The CBDT has clarified this via circular. However, GST TDS under Section 51 of the CGST Act is a separate provision applicable only to government deductors above ₹2.5 lakh per contract, at 2%.
Internal Links
- TDS on Salary: Form 16, Section 192, and Correct Deduction → /tds-on-salary-form-16-section-192
- TDS on Professional Fees Section 194J: Freelancer Guide → /tds-professional-fees-194j-freelancer-guide
- How to File TDS Returns: 24Q and 26Q Guide → /how-to-file-tds-returns-24q-26q
- Form 26AS and AIS: How to Use Them While Filing ITR → /ais-26as-income-tax-filing
- TCS on Foreign Remittance LRS: Rates and Compliance → /tcs-foreign-remittance-lrs-rates
Authoritative External References
- Income Tax Act 1961, Sections 192-206CC (TDS provisions)
- Finance Act 2025 — amendments to TDS thresholds and rates
- CBDT circular on TDS on GST component
- TRACES portal — tdscpc.gov.in (Form 26AS, Form 16A downloads)
Image Briefs
Image 1: Colour-coded reference card: most common TDS sections (194A, 194C, 194H, 194I, 194J) with rate and threshold at a glance. Navy header, white rows, alternating light blue. 1200x900.
Image 2: Timeline graphic showing key TDS changes effective 1 April 2025 and 1 October 2024. Horizontal timeline with callout boxes for each change. 1600x900.
Image 3: Flowchart: "What section applies? → Is it salary? → 192. Is it professional? → 194J. Is it rent? → 194I. Is it contractor? → 194C." Decision tree style. 1080x1920.
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Author Bio
Written by a Chartered Accountant with direct practice in TDS compliance, return filing (24Q and 26Q), and TRACES reconciliation for businesses across sectors. Rates and thresholds are verified against Finance Act 2025 and CBDT notifications current as of April 2026.
Newsletter CTA
| Never miss a compliance deadline TDS rate changes, new sections, CBDT circulars, and TRACES updates — every change that affects what you deduct and what you report, decoded promptly. One email per month. |
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Compliance Disclaimer
| *This rate chart is for reference purposes only. TDS rates and thresholds are subject to change via Finance Acts and CBDT notifications. Always verify the applicable section and rate against the current Income Tax Act or with a Chartered Accountant before deducting. Short deduction or non-deduction attracts interest and penalty.* |
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Freshness Commitment
Last verified on 25 April 2026 against the Finance Act 2025 and CBDT notifications. Rates effective from 1 April 2025 are fully reflected. This article is updated within seven days of any CBDT notification or Finance Act amendment affecting TDS rates, thresholds, or procedures.