TDS Rates Chart FY 2025-26
Section-wise TDS Rate List
Quick Answer
TDS rates for FY 2025-26 vary based on the nature of payment and applicable section of the Income Tax Act. Common rates include 10% for professional fees (Section 194J), 1%/2% for contractor payments (Section 194C), and slab-based deduction for salary under Section 192.
Summary
TDS (Tax Deducted at Source) ensures tax collection at the point of income generation. Different sections define different TDS rates depending on the type of payment. This guide provides a complete section-wise TDS rate chart, examples, rules, and compliance tips.
For complete understanding of TDS, TCS, returns, payment, and certificates, refer to the Complete Guide to TDS & TCS in India.
What is TDS?
TDS is a tax deducted by the payer while making specified payments such as salary, rent, commission, or professional fees. The deducted tax is deposited with the government on behalf of the recipient.
Why TDS Rates Are Important?
- Ensures timely tax collection ✔️
- Prevents tax evasion ✔️
- Helps in advance tax adjustment ✔️
- Mandatory compliance ✔️
Latest TDS Rates Chart FY 2025-26
| Section | Nature of Payment | Threshold Limit | TDS Rate |
|---|---|---|---|
| 192 | Salary | Basic exemption | As per slab |
| 194C | Contractor | ₹30,000 / ₹1,00,000 | 1% / 2% |
| 194J | Professional Fees | ₹30,000 | 10% |
| 194I | Rent | ₹2,40,000 | 10% / 2% |
| 194H | Commission | ₹15,000 | 5% |
| 194A | Interest | ₹40,000 | 10% |
Section-wise Explanation of TDS Rates
Section 192 – TDS on Salary
TDS on salary is deducted based on applicable income tax slab rates after considering deductions and exemptions.
Section 194C – TDS on Contractor Payments
1% for individual/HUF contractors and 2% for others. Applicable when payment exceeds threshold.
Section 194J – TDS on Professional Fees
10% TDS applies on professional services such as legal, medical, and consultancy.
Section 194I – TDS on Rent
10% for land/building and 2% for plant and machinery.
TDS Rate Example
Professional fee = ₹1,00,000
TDS @10% = ₹10,000
Net payment = ₹90,000
TDS Rate Comparison Table
| Payment Type | TDS Rate | Frequency |
|---|---|---|
| Salary | Slab based | Monthly |
| Contractor | 1% / 2% | Per payment |
| Professional Fees | 10% | Per payment |
When to Deduct TDS?
- At time of payment ✔️
- At time of credit ✔️
- Whichever is earlier ✔️
TDS Payment Process (Overview)
After deducting TDS, it must be deposited with the government using Challan 281.
Step-by-step guide: TDS Payment Online.
TDS Return Filing Requirement
TDS returns must be filed quarterly using appropriate forms like 24Q and 26Q.
Learn more: TDS Return Filing.
TDS Certificate
After deduction, a TDS certificate (Form 16/16A) must be issued to the deductee.
Details here: TDS Certificate.
Checklist for TDS Compliance
- Identify applicable section ✔️
- Check threshold limit ✔️
- Apply correct rate ✔️
- Deposit TDS on time ✔️
- File return ✔️
Common Mistakes to Avoid
- Wrong TDS rate ❌
- Late deduction ❌
- Non-payment ❌
- Incorrect section ❌
Consequences of Wrong TDS Deduction
- Interest penalty ❌
- Late fee ❌
- Disallowance of expense ❌
Process Flow – TDS Compliance
- Identify transaction
- Check TDS section
- Deduct TDS
- Deposit tax
- File return
- Issue certificate
Suggested Posts
Important External Resources
Conclusion
Understanding TDS rates is essential for correct tax deduction and compliance. Businesses must ensure correct section selection, timely payment, and accurate return filing to avoid penalties.
For complete TDS and TCS compliance guidance, visit the Complete Guide to TDS & TCS in India.
Frequently Asked Questions (FAQs)
What is TDS?
Tax deducted at source.
What are TDS rates?
Rates vary by section.
Who deducts TDS?
Payer.
When to deduct?
At payment/credit.
Is TDS mandatory?
Yes.
What is Section 194J?
Professional fees TDS.
What is rate?
10%.
Where to pay TDS?
Income tax portal.
Is return filing required?
Yes.
Penalty for delay?
Interest applies.