Effective April 1, 2025, new TDS and TCS rates apply to various income sources, including salary, interest, rent, commissions, and winnings. TDS is deducted at specified thresholds, such as 10% on interest exceeding ₹10,000 and 1% on property sales above ₹50 lakh. Higher rates apply for lottery winnings (30%) and non-compliant taxpayers (5% or twice the standard rate). Section 194P ensures automatic TDS deduction for senior citizens above 75 years. Additionally, TCS applies to specific goods and services like alcohol (1%), scrap (1%), and overseas tour packages (5%). Compliance with these rates is crucial for tax planning and avoiding penalties.
TDS Rates effective from 01st April 2025
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor. The payment includes salary, commission, professional fees, interest, rent, etc.
TDS section, Threshold and applicable TDS Rate for the Financial year 2025- 26 as follows-
| Section as per income tax Act | Particulars | Threshold limit for TDS applicability | Applicable TDS rate % |
| 192 | Salary Income | Income Tax Slab | Slab rates |
| Based on old and New Regime | |||
| 192 A | EPF – Premature withdrawal | Rs 50,000 | 10% |
| If no Pan, TDS @ 30% | |||
| 193 | Interest on Securites | Rs. 10,000 | 10% |
| 193 | Interest on Debentures | Rs 5,000 | 10% |
| 194 | DIVIDEND – Dividends | Rs 10,000 | 10% |
| 194 A | Interest other than on securities by banks / post office | Rs. 50,000 | 10% |
| (Rs 100,000 for Senior Citzens) | |||
| 194 A | Interest other than on securities by others | Rs. 10,000 | 10% |
| 194 B | Winnings from Lotteries / Puzzle / Game | Rs. 10,000 in respect of single transaction | 30% |
| 194 BB | Winnings from Horse Race | Rs. 10,000 in respect of single transaction | 30% |
| 194 C | Contractor-Single transaction- | Rs.30,000 | |
| Individual/HUF | 1% | ||
| -Others | 2% | ||
| 194 C | Contractor- Consolidated payment transaction- | Rs.1,00,000 | |
| Individual/HUF | 1% | ||
| -Others | 2% | ||
| 194 D | Payment of Insurance Commission | Rs. 20,000 | 5% (Individuals) |
| (Form 15G/H can be submitted) | 10% (Companies) | ||
| 194DA | Payment in respect of Life Insurance Policy | Rs 1,00,000 | 5% |
| 194E | Payment to non-resident sportsmen/sports association | – | 20% |
| 194 EE | Payment of NSS Deposits | Rs 2,500 | 10% |
| 194 G | Commission on Sale of Lottery tickets | Rs 20,000 | 5% |
| 194 H | Commission or Brokerage | Rs 20,000 | 5% |
| 194 I | Rent of Land, Building or Furniture | Rs. 6,0,000 | 10% |
| 194I | Rent of Plant & Machinery | Rs. 6,00,000 | 2% |
| 194IB | RENT – Rental Expense | Rs 50,000 (per month) | 2% |
| (Tenant has to deduct TDS) | |||
| (Individuals who are not liable to Tax Audit) | |||
| 194 IA | Transfer of Immovable Property, other than Agricultural land | Rs. 50 lakh | 1% |
| 194IC | Payment of monetary consideration under Joint Development Agreements | – | 10% |
| 194J | Fees for professional or technical services | Rs 50,000 | 2% (or) 10% |
| 194LA | Payment of compensation on acquisition of certain immovable property | Rs 5,00,000 | 10% |
| 194 LB | Interest from Infrastructure Bond to NRI | NA | 5% |
| 194 LD | Interest on certain bonds and govt. Securities | NA | 5% |
| 194N | Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office: | > Rs 1cr | 2% |
| 194Q | Purchase of goods | Rs 50 lakh | 0.10% |
| 194T | 194T – Remuneration, Interest and Commission paid to partners | 20,000/- | 10% |
| 206AB | TDS on non-filers of ITR at higher rates | – | 5% or Twice the rates in force |
| 194P | TDS on Senior Citizen above 75 Years (No ITR filing cases) | – | Slab Rates |
| TCS – Tax collected at Source – Rates effective from 01st April 2025 | |||
| SECTION 206C (1) | |||
| TCS Deposit Challan Code | Goods & Services liable to TCS | TCS Rate (%) | |
| 6CA | Alcoholic liquor for human consumption | 1 | |
| 6CB | Timber obtained under Forest lease | 2.5 | |
| 6CC | Timber obtained by any mode other than under a forest lease | 2.5 | |
| 6CD | Any other forest produce not being timber or tendu leaves | 2.5 | |
| 6CE | Scrap | 1 | |
| 6C1 | Tendu Leaves | 5 | |
| 6CJ | Minerals, being coal or lignite or iron ore | 1 | |
| SECTION 206C (IC) | |||
| 6CF | Parking Lot | 2 | |
| 6CG | Toll Plaza | 2 | |
| 6CH | Mining & Quarrying | 2 | |
| SECTION 206C (IF) | |||
| 6CL | Motor Vehicle (any mode of payment) | 1 | |
| (Seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding 10 lakh Rupees) | |||
| SECTION 206C (IG) | |||
| 6C0 | Overseas Tour Program Package | 1,000,000 | 5 |
| (Every person being a seller of an overseas tour program package, who receives any amount from a buyer, being the person who purchases such package) | (TCS in case of Non-Furnishing of PAN/Aadhar 10%) | ||
| 6CP | Remittance under LRS for education loan taken from financial institution mentioned under section 80E(Amount or aggregate of the amounts in excess of 7 lakh rupees remitted by the buyer in a financial year, if the amount being remitted out is a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education) | Nil | |
| SECTION 206C (111) | |||
| 6CR | Sale of Goods | ||
| Every person, being a seller, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding 50 lakh rupees in any previous year, other than the goods being exported out of India or goods covered in sub-section (1) or sub-section (1F) or sub-section (1G) | Omitt. by Finance A 1- Act 2025 (w.e.f. 1-4-2025) | ||
Author Bio
detailed information. handy for ready reference. thanks sir
I found I mistake , TDS rates of Section 194IB is 2% instead of 5% mentioned in the article
According to Section 194-IB, it is mandatory for any person, i.e. individuals / HUF not liable to audit u/s 44AB, to deduct taxes for rent paid to a resident exceeding Rs 50,000 per month. Thus, as per this provision, any individual (even a salaried class individual) is liable to deduct TDS @ 5% if the rent that is being paid exceeds Rs 50,000 per month. This rate has been proposed to be reduced to 2% with effect from 1st October 2024.
tds on Commission and Brokerage is shown as 5% but it has changed to 2%
Commission or brokerage.
194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of 92[two] per cent :
Provided that no deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to, the payee, does not exceed fifteen thousand rupees :
Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid, shall be liable to deduct income-tax under this section:
Provided also that no deduction shall be made under this section on any commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees.
Explanation.—For the purposes of this section,—
(i) “commission or brokerage” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;
(ii) the expression “professional services” means services rendered by a person in the course of carrying on a legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as is notified by the Board for the purposes of section 44AA;
(iii) the expression “securities” shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) ;
(iv) where any income is credited to any account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.
Good informative.