TDS / TCS Rates for FY 2025-26
Please check this table for TDS/TCS rates applicable w.e.f. 01.04.2025 and also for the previous year 2024-25
TDS / TCS Rates for FY 2025-26
| Sl. No | Section | Nature of Payment | Threshold Limit (w.e.f. 01-04-2025) |
TDS/TCS Rate (w.e.f. 01-04-2025) |
Earlier Threshold Limit / Rate (Upto 31-03-2025) |
|---|---|---|---|---|---|
| 1 | 193 | Interest on securities | Rs.10,000/- | 10% | Nil Threshold |
| 2 | 194 | Dividend for an individual shareholder | Rs. 10,000/- | 10% | Rs. 5,000/- |
| 3 | 194A | Interest other than Interest on securities |
(i) Rs. 1,00,000/- for senior citizen (ii) Rs. 50,000/- (Bank, co-op society, PO) (iii) Rs. 10,000/- in other cases |
10% |
(i) Rs. 50,000/- for senior citizen (ii) Rs. 40,000/- (Bank, co-op society, PO) (iii) Rs. 5,000/- in other cases |
| 4 | 194K | Income in respect of units | Rs. 10,000/- | 10% | Rs. 5,000/- |
| 5 | 194B | Winnings from lottery, etc. | Rs. 10,000/- (per txn) | 30% | Aggregate > Rs. 10,000/- during FY |
| 6 | 194BB | Winnings from horse race | Rs. 10,000/- (per txn) | 30% | Aggregate > Rs. 10,000/- during FY |
| 7 | 194D | Insurance commission | Rs. 20,000/- | Domestic Co: 10% Others: 2% | Rs. 15,000/- |
| 8 | 194G | Commission/prize on lottery tickets | Rs. 20,000/- | 2% | Rs. 15,000/- |
| 9 | 194H | Commission or brokerage | Rs. 20,000/- | 2% | 5% up to 30-09-2024 Rs. 15,000/- |
| 10 | 194I | Rent | Rs. 50,000/- per month or part |
(a) Plant/Machinery – 2% (b) Land/building/furniture – 10% |
Rs. 2.40 Lakhs per FY |
| 11 | 194IB | Rent by Individual/HUF (not liable to tax audit) | Rs. 50,000/- per month or part | 2% | 2% (5% up to 30-09-2024) |
| 12 | 194LA | Compensation on compulsory acquisition | Rs. 5,00,000/- | 10% | Rs. 2.50 Lakhs |
| 13 | 194LBC | Income from securitisation trust | NA | 10% | 25% (Ind./HUF), 30% (Others) |
| 14 | 1947 | Payment by firm (incl. LLP) to partners | Rs. 20,000 per partner p.a. | 10% | Not Applicable |
| 15 | 194J | Fee for professional or technical services | Rs. 50,000/- | (a) 2% (Technical services) (b) 10% (Others) |
Rs. 30,000/- |
| 16 | 206C(1) | TCS on timber/forest produce | NA | 2% | 2.5% |
| 17 | 206C(1G) | TCS on LRS & Overseas Tour | Rs. 10,00,000 | 20% | Rs. 7,00,000 |
| 18 | 206C(1H) | TCS on Sale of Goods | Omitted | Omitted | Rs. 50,00,000/- & 0.1% |
| 19 | 206AB | TDS for non-filers of ITR | Omitted | Omitted | Twice the rate or 5% |
Notes:
- Note 1: Sec. 206C(1G) – TCS not applicable for LRS remittance for education via financial institutions.
- Note 2: Sec. 194M – No TDS for Individual/HUF on payments below Rs. 50 Lakhs under 194C, 194H, 194J. TDS @ 2% (5% up to 01-10-2024)
- Note 3: Sec. 194O – TDS @ 0.10% (1% up to 01-10-2024) by e-commerce operators on sales > Rs. 5 Lakhs through digital/electronic mode.
The latest amendments to TDS provisions, effective from 01st April 2025, bring significant changes in threshold limits and deduction rates across various sections. These revisions aim to streamline tax compliance, enhance revenue collection, and ensure a more transparent deduction mechanism for both individuals and corporates.
One of the most notable changes is the increase in threshold limits for various sections such as 194A, 194H, 194I, and 194J. For instance, under Section 194A (Interest other than on securities), the threshold has been rationalized to ₹1,00,000 for senior citizens, ₹50,000 for interest paid by banks, co-operative societies, and post offices, and ₹10,000 in all other cases. This move is expected to reduce the compliance burden for smaller taxpayers while continuing to capture high-value transactions within the TDS net.
In the case of commission and brokerage (Section 194H), and professional or technical services (Section 194J), the threshold has been revised to ₹20,000 and ₹50,000 respectively. The rate of TDS remains at 2% for technical services and 10% for professional services, reaffirming the differential treatment introduced in earlier amendments.
Another important change is under Section 194I (Rent), where the threshold is now clearly defined as ₹50,000 per month or part thereof. The rate of TDS remains bifurcated at 2% for plant and machinery and 10% for land, building, and furniture – bringing better clarity for tenants and business houses in rental agreements.
Newly introduced Section 1947 mandates TDS @ 10% on payments exceeding ₹20,000 per partner per annum by Partnership Firms or LLPs to their partners. This is a crucial change that requires close attention by professional firms and partnership entities to avoid lapses in deduction and reporting.
Section 194K and 194B/194BB (lottery, crossword, horse race winnings) continue to attract TDS at 10% and 30% respectively, but with a new threshold limit of ₹10,000 per transaction, replacing the earlier “aggregate during the financial year” approach. This ensures tighter control and real-time compliance for such high-risk income categories.
Section 194IB dealing with rent paid by individuals/HUFs (not liable to tax audit) now has a revised threshold of ₹50,000 per month and a flat 2% rate. The earlier 5% deduction rate (in force up to 30th Sept 2024) has been withdrawn, simplifying the deduction mechanism.
Another key revision is under Section 194LA, where the compensation threshold for land acquisition without tax deduction has been increased from ₹2.5 lakhs to ₹5 lakhs. This update will benefit landowners and small compensation holders while ensuring that higher payouts are brought into the tax fold
Stakeholders shall note the omission of TDS provisions for certain sections like 206AB and 206C(1H), where the focus is now shifting to other compliance tools and systems.
These changes reiterate the importance of revisiting your vendor master, lease/rent agreements, partner remuneration structures, and overall TDS applicability matrices to avoid short deduction, interest liability, or penalties under the Income-tax Act.
For a personalized review or clarification, feel free to reach out to our team.
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