The Tax Deducted at Source (TDS) rates for FY 2025-26 (AY 2026-27) outline the tax obligations on various payments, including salary, interest, rent, winnings, and professional fees. TDS on salary (Section 192) follows slab rates, while other payments have specific thresholds. For example, TDS on bank interest (Section 194A) applies beyond ₹50,000 for senior citizens and ₹10,000 for others at a 10% rate. Lottery winnings (Section 194B) and online gaming (Section 194BA) are taxed at 30%. Payments to contractors (Section 194C) incur 1% TDS for individuals and 2% for others if the amount exceeds ₹30,000 in a single transaction or ₹1,00,000 annually. Rent payments (Section 194I) attract 10% TDS on land and buildings and 2% on plant and machinery. Transactions like the sale of property (Section 194IA) exceeding ₹50 lakh are subject to 1% TDS. The new cash withdrawal limit for cooperative societies under Section 194N has increased to ₹3 crore. Non-residents earning from mutual funds (Section 196A) can now claim lower TDS rates based on tax treaties. Additionally, Section 206AA prescribes higher TDS rates if PAN is unavailable. Understanding these TDS rates helps taxpayers ensure compliance and avoid penalties.
| TDS Section List | Nature of Payment | Threshold | Individual or HUF | Others |
|---|---|---|---|---|
| 192 | Payment in form of salary | ₹ 2,50,000 | Slab Rates | Slab Rates |
| 192A
(Note 1) |
Employee Provident Fund withdrawal prematurely/early | ₹ 50,000 | 10% | 10% |
| 193 | Interest earned on securities including listed debentures and other securities | ₹ 10,000 | 10% | 10% |
| 194 | Payment of dividends by domestic Co. | ₹ 10,000 | 10% | 10% |
| 194A | Interest on deposits from banks or post offices | ₹ 50,000 ₹ 1,00,000(senior citizens) |
10% | 10% |
| Interest income other than securities | ₹ 10,000 | 10% | 10% | |
| 194B | Winnings of lotteries, puzzles, or games (Casual income) | 10,000 in a single transaction | 30% | 30% |
| 194BA | Winnings from online Games | – | 30% | 30% |
| 194BB | Winnings from Horse races | 10,000 in a single transaction | 30% | 30% |
| 194C | Payments made to contractors or sub-contractors (one time) | ₹ 30,000 | 1% | 2% |
| Payments made to contractors or sub-contractors on an aggregate basis | ₹ 1,00,000 | 1% | 2% | |
| 194D | Commission paid on insurance sales to domestic companies | ₹ 20,000 | Not Applicable | 10% |
| Commission paid on insurance sales to non-domestic companies | ₹ 20,000 | 5% | Not Applicable | |
| 194DA | Maturity of life insurance policy | ₹ 1,00,000 | 2% | 2% |
| 194EE | Payment received from the National Savings Scheme by individuals | ₹ 2,500 | 10% | 10% |
| 194G | Payments or commission made from the sale of lottery tickets | ₹ 20,000 | 2% | 2% |
| 194H | Commission or brokerage fees | ₹ 20,000 | 2% | 2% |
| 194I | Rent paid for land, building, or furniture | ₹ 50,000 per month i.e. 6,00,000 in a financial year | 10% | 10% |
| Rent paid for plant and machinery | 2% | 2% | ||
| 194IA | Payment for the transfer of immovable property excluding agricultural land | ₹ 50,00,000 | 1% | 1% |
| 194IB | Rent payment made by an individual or HUF not covered under section 194I | ₹ 50,000 (per month) | 2% | Not Applicable |
| 194IC | Payments made under a Joint Development Agreement to I / HUF | No Limit | 10% | 10% |
| 194J | Fees paid for professional and technical services (doctor/CA etc) | ₹ 50,000 | 10% | 10% |
| Royalty paid for the sale, distribution, or exhibition of cinematographic films | ₹ 50,000 | 2% | 2% | |
| 194K | Income received from units of a mutual fund, such as dividends | ₹ 10,000 | 10% | 10% |
| 194LA | Compensation for acquiring certain immovable property | ₹ 5,00,000 | 10% | 10% |
| 194LB | Interest on infrastructure bonds to Non-Resident Indians | Not Applicable | 5% | 5% |
| 194LBA(1) | Distribution of certain income by a business trust to its unit holders | Not Applicable | 10% | 10% |
| 194LD | Interest payment on rupee-denominated bonds, municipal debt security, and government securities | Not Applicable | 5% | 5% |
| 194M
(Note 2) |
Payments made for contracts, brokerage, commission, or professional fees excluding sections 194C, 194H, 194J- Individual/HUF | ₹ 50,00,000 | 2% | 2% |
| 194N
(Note 3) |
Cash withdrawal exceeding a specified amount from the bank, with filed ITR | ₹ 1,00,00,000 | 2% | 2% |
| When ITR is not filed | ₹ 20,00,000 | 2% then 5% after 1cr on slab basis | 2% then 5% after 1cr on slab basis | |
| 194O | Amount received for the sale of products/services by e-commerce service providers through digital platforms | ₹ 5,00,000 | 0.1% | 0.1% |
| 194P | Senior citizen above 75 yr of age having salary and interest Income, ITR not required | Not Applicable | Slab rates | Not Applicable |
| 194Q | Payments made for the purchase of goods | ₹ 50,00,000 | 0.10% | 0.10% |
| 194R | Perquisite provided | ₹ 20,000 | 10% | 10% |
| 194S | TDS on the payment of cryptocurrencies or other virtual assets | ₹ 50,000
(specified person) ₹ 10,000 (others) |
1% | 1% |
| 194T | TDS on payments made by firms to their partners | ₹ 20,000 | Not applicable | 10% |
| 206AA | TDS applicable in case of non-availability of PAN | Not Applicable | At a higher rate than: -2X the rate specified by the act -20% -The currently applicable rate |
At a higher rate than: -2X the rate specified by the act -20% -The currently applicable rate |
Notes and related points
1. As per Section 192A TDS rate on PF withdrawal for employees without PAN reduced to 20% from the maximum marginal rate.
2. Some sections apply only if gross receipts from profession exceeds ₹ 50 lac and from business exceeds ₹ 1 crore i.e. specified persons
3. As per Section 194N Increased TDS threshold for cash withdrawal by co-operative societies. From April 1st, 2023, TDS will be deducted on cash withdrawals exceeding Rs 3 crore, up from the previous limit of Rs 1 crore.
4. Section 196A:Non-residents earning income from mutual funds in India can provide a Tax Residency Certificate starting April 1st, 2023, to avail the TDS benefit as per the rate specified in the tax treaty, instead of the standard 20% rate.
5. There is no TDS rate defined in section 195
FAQs: TDS Rate Chart for FY 2025-26 & AY 2026-27
1. What are the TDS rates applicable to salary and bank interest for FY 2025-26?
Ans. TDS on salary under Section 192 is deducted according to the applicable income tax slab rates. For bank and post office interest under Section 194A, TDS is deducted at 10% when the prescribed threshold is exceeded, with a higher threshold available for senior citizens.
Q.2 Which payments attract TDS at the highest rate of 30%?
Ans. A TDS rate of 30% applies to specified payments such as lottery, crossword puzzle and other game winnings under Section 194B, online gaming winnings under Section 194BA, and horse race winnings under Section 194BB, subject to the applicable conditions and thresholds.
Q.3 What is the TDS applicable on payments to contractors, professionals and rent?
Ans. Payments to contractors under Section 194C are generally subject to TDS at 1% for payments to individuals or HUFs and 2% in other cases, subject to the prescribed monetary limits. Professional and technical fees under Section 194J generally attract 10% TDS, while rent under Section 194I is subject to 10% TDS for land, buildings and furniture, and 2% for plant and machinery.
Q.4 What happens if the deductee does not provide a PAN?
Ans. Under Section 206AA, where the deductee fails to furnish a valid PAN, tax is required to be deducted at the higher of:
- twice the rate specified under the relevant provision,
- 20%, or
- the rate otherwise applicable under the Act.
Q.5 What are some of the key recent changes highlighted in the TDS rate chart?
Ans. The chart highlights several important changes, including the enhanced cash withdrawal threshold of ₹3 crore for co-operative societies under Section 194N, the availability of tax treaty benefits for eligible non-residents under Section 196A upon furnishing a Tax Residency Certificate, and the clarification that no specific TDS rate is prescribed under Section 195, which continues to apply based on the relevant provisions governing payments to non-residents.
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