TDS Rates and Sections for FY 2025-26 — Complete Reference Guide
Complete TDS deduction rate chart for FY 2025-26 covering Sections 192, 194C, 194J, 194H, 194I, 194Q. Includes thresholds, payment deadlines, and return filing dates.
Harun Raaj
Chartered Accountant · Harun Raaj & Associates
What Is TDS?
Tax Deducted at Source (TDS) under Chapter XVII-B of the Income Tax Act, 1961 requires payers to deduct tax at specified rates and deposit it with the government. The deducted amount appears in the payee's Form 26AS and AIS.
Key TDS Sections and Rates — FY 2025-26
Section 192 — Salary
Rate: Applicable slab rates based on employee's chosen tax regime. No fixed rate — calculated monthly on estimated annual income. Deducted by employer.Section 194A — Interest (Other Than Securities)
Rate: 10%; Threshold: ₹40,000 (₹50,000 for senior citizens) per financial year per payer.Section 194C — Payment to Contractors
Rate: 1% (individual/HUF) / 2% (others); Threshold: ₹30,000 per contract or ₹1,00,000 aggregate in a year. Covers work contracts, advertising, broadcasting, transport, catering.Section 194H — Commission or Brokerage
Rate: 5%; Threshold: ₹15,000.Section 194I — Rent
Rate: 10% (land and building) / 2% (plant and machinery); Threshold: ₹2,40,000 per year.Section 194IA — Transfer of Immovable Property
Rate: 1%; Threshold: ₹50,00,000. Buyer deducts; files Form 26QB.Section 194J — Professional / Technical Fees
Rate: 10% (professional services — CA, legal, medical) / 2% (technical services, software royalty); Threshold: ₹30,000.Section 194Q — Purchase of Goods
Rate: 0.1%; Threshold: purchases > ₹50 lakh from a single seller (applicable when buyer's turnover > ₹10 crore).Section 195 — Payments to Non-Residents
Rate: DTAA rates or income tax rates, whichever is more beneficial to the payee.TDS Return Filing Calendar
Forms: 24Q (salary), 26Q (non-salary resident), 27Q (non-resident payments).
TDS Deposit Deadlines
- Government deductors: Same day (or by 7th of next month)
- Others: 7th of the following month; for March: 30 April
Consequences of Non-Compliance
- Interest for non-deduction (Section 201(1A)): 1% per month from due date to deduction date
- Interest for late deposit (Section 201(1A)): 1.5% per month from deduction to deposit date
- Late return filing (Section 234E): ₹200 per day, capped at TDS amount
- Expense disallowance (Section 40(a)(ia)): 30% of payment disallowed if TDS not deducted
Lower / Nil TDS Certificate
Payees can apply to the Assessing Officer for a certificate under Section 197 for lower or nil TDS if their estimated tax liability is lower than the applicable TDS rate.
Frequently Asked Questions
What are the major TDS sections for salaried individuals?
The key sections are: Section 192 (salary — employer deducts based on estimated annual income and declared regime), Section 194A (interest from banks — 10% above ₹40,000 threshold, ₹50,000 for senior citizens), and Section 194B (lottery/game show winnings — 30% above ₹10,000). These three cover the majority of TDS touchpoints for salaried taxpayers.
What is the TDS rate on rent payments?
Section 194-IB requires individual/HUF tenants paying rent exceeding ₹50,000 per month to deduct TDS at 2% (reduced from 5% by Finance Act 2024). Section 194-I applies when the payer is a business — 2% for plant/machinery/equipment, 10% for land/building/furniture. The threshold for Section 194-I is ₹2.4 lakh per annum.
What happens if TDS is deducted but not deposited by the deductor?
The tax credit will not appear in your Form 26AS until the deductor deposits the TDS and files the TDS return. You can raise a grievance on the e-filing portal, contact the deductor, or file a complaint with the TDS Assessing Officer. Under Section 205, no demand can be raised against the deductee for tax already deducted — the liability shifts to the deductor.
Can I request lower TDS deduction?
Yes. Under Section 197, you can apply to the Assessing Officer in Form 13 for a lower or nil TDS certificate if your estimated tax liability for the year is lower than the TDS that would be deducted. The certificate, once issued, is provided to the deductor who then deducts at the specified lower rate.
What is the TDS rate on professional fees?
Section 194J prescribes 10% TDS on fees for professional services and 2% on fees for technical services (bifurcated by Finance Act, 2020). The threshold is ₹30,000 per annum per payee. This applies to payments to CAs, lawyers, architects, engineers, doctors, and other professionals.
I'm CA Harun Raaj, Visakhapatnam. If any of this affects you or your business, reach out — I'd be glad to help.
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See Also
Frequently Asked Questions
What is the TDS rate and threshold for interest on savings accounts FY 2025-26?+
Under Section 194A, TDS on interest (other than securities) is deducted at 10%. The threshold is ₹40,000 per financial year per payer, or ₹50,000 for senior citizens.
How much TDS should be deducted on rent payments for plant and machinery?+
Section 194I specifies a TDS rate of 2% on rent for plant and machinery, with a threshold of ₹2,40,000 per year. For land and building, the rate is 10%.
What are the TDS filing deadlines for Q2 and Q3 in FY 2025-26?+
Per the TDS Return Filing Calendar, Q2 (July–September) return is due by 31 October, and Q3 (October–December) return is due by 31 January. Forms used are 24Q (salary), 26Q (non-salary resident), and 27Q (non-resident).
When should TDS be deposited with government for non-government deductors?+
According to TDS Deposit Deadlines, non-government deductors must deposit TDS by the 7th of the following month. For March deductions, the deposit deadline is 30 April.
What is the TDS rate on professional fees for doctors and consultants?+
Section 194J prescribes a TDS rate of 10% on professional services (including CA, legal, and medical fees), with a threshold of ₹30,000. Technical services attract 2% TDS.
What penalty applies for failure to deduct TDS on time?+
Under Section 201(1A), interest of 1% per month applies for non-deduction from the due date to deduction date. For late deposit of TDS, interest is 1.5% per month from deduction to deposit date. Late return filing under Section 234E incurs ₹200 per day.
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