TDS Rates and Sections for FY 2025-26 — Complete Reference Guide

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.

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%.

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).

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.

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.

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.

Under Section 194C, identify whether the payee is an individual or HUF, or another person, and apply the article's stated rate to the amount credited or paid once the per-contract or annual threshold is crossed. The article lists 1% for an individual or HUF contractor and 2% for others, with ₹30,000 per contract or ₹1,00,000 annually as the thresholds.

Reconcile each payment category to the applicable Chapter XVII-B section, verify threshold and rate, and match deductions to deposit challans, Form 26AS/AIS, and quarterly returns. Check the correct return form—24Q, 26Q, or 27Q—and test deposit and filing dates. Also quantify interest under Section 201(1A), Section 234E fees, and Section 40(a)(ia) disallowance exposures.

Start by classifying the payment under the correct TDS section, checking the payee, threshold, and rate, and deducting at credit or payment as applicable. Deposit the tax by the statutory deadline, then report it in Form 24Q for salary, Form 26Q for resident non-salary payments, or Form 27Q for non-resident payments. Reconcile the filing to challans and PAN records.

TDS is compulsory when a payment falls within Chapter XVII-B, the payer is a person covered by the relevant section, and the applicable threshold or condition is met. It is not one universal deduction on every payment. The payer must identify the governing section, deduct at the prescribed rate, deposit the tax, and file the appropriate quarterly statement.

A TDS certificate documents the tax deducted from the payee's income and supports reconciliation with Form 26AS and AIS. The payee uses the reported credit while filing the income-tax return. If the deductor has withheld tax but not deposited or correctly reported it, the credit may not appear, so the deductor may need to correct the TDS return.

Accounting or professional fees generally fall under Section 194J when they are fees for professional services. For FY 2025-26 from 1 April 2025, the applicable annual threshold is ₹50,000 per payee; professional services remain subject to the rate specified in Section 194J. Classification should be checked where the engagement is technical, contractual, or bundled with other services.