TDS Rate Chart FY 2025-26 — All Sections with Limits

TDS (Tax Deducted at Source) is a mechanism under the Income Tax Act 1961 where the payer deducts tax at the time of making certain payments and deposits it with the government on behalf of the recipient.nnThe recipient receives credit for the TDS deducted, which is reflected in Form 26AS and the Annual Information Statement (AIS). TDS ensures continuous tax collection throughout the year rather than a lump sum at year-end.nnEvery person making a specified payment above the prescribed threshold must deduct TDS, deposit it by the due date, file quarterly TDS returns, and issue TDS certificates (Form 16 or 16A) to the deductee.

The following table lists all major TDS sections applicable for FY 2025-26. Rates apply when the deductee provides a valid PAN. If PAN is not provided, TDS is deducted at 20% or the applicable rate, whichever is higher, under Section 206AA.

Section 194C of the Income Tax Act 1961 governs TDS on payments to contractors and sub-contractors. The deductor must be an individual, HUF, company, firm, or AOP making payments for carrying out any work.nnKey thresholds: Single contract payment exceeds ₹30,000, or aggregate payments to the same contractor exceed ₹1,00,000 in a financial year.nnTransport contractors are exempt from TDS if they provide their PAN and a declaration that they own 10 or fewer goods carriages (Section 194C(6)).

Section 194J applies to fees for professional services (doctors, CAs, lawyers, engineers, architects) and technical services. The threshold is ₹30,000 per year per payee.nnFrom FY 2020-21, a distinction was introduced: professional services attract 10% TDS while technical services, royalty for sale/distribution/exhibition of cinematograph films, and call centre operations attract only 2%.nnDirectors' fees (other than salary) also fall under Section 194J at 10%, with no threshold limit.

TDS deducted must be deposited to the government within the prescribed due dates using Challan ITNS 281 on the income tax portal. Late deposit attracts interest at 1.5% per month or part thereof under Section 201.nnQuarterly TDS returns must be filed using Form 24Q (salary TDS), Form 26Q (non-salary TDS to residents), or Form 27Q (TDS to non-residents).

Non-compliance with TDS provisions attracts multiple penalties under the Income Tax Act 1961. The deductor becomes an 'assessee in default' for failure to deduct or deposit TDS.nnInterest under Section 201(1A): 1% per month for failure to deduct, 1.5% per month for deducting but not depositing. Late filing fee under Section 234E: ₹200 per day until the return is filed (maximum equal to TDS amount). Penalty under Section 271C: Up to the amount of TDS not deducted.

TDS is deposited online using Challan ITNS 281 on the income tax e-filing portal (incometax.gov.in). Select the correct section and nature of payment before generating the challan.nnTDS returns are filed on the TRACES portal (tdscpc.gov.in) or through the income tax e-filing portal using validated utilities (RPU and FVU software available for download from NSDL).nnFor salaried TDS (Form 24Q), employee-wise salary and deduction details must be filed in Q4. Form 16 (Part A from TRACES, Part B by employer) must be issued to employees by 15 June of the assessment year.

Section 194T is a new TDS provision effective from 1 April 2025 introduced by the Finance Act 2024. It requires every firm (partnership firm or LLP) to deduct TDS on payments to partners.nnPayments covered: Salary, bonus, commission, remuneration, or interest paid to a partner exceeding ₹20,000 in a financial year. TDS rate: 10%. The deduction is made at the time of credit to the partner's account or actual payment, whichever is earlier.nnThis is a significant change for partnership firms that previously paid partners without any TDS deduction. Firms must now obtain TAN if not already registered and start filing quarterly TDS returns.