Effective April 1, 2025, new TDS and TCS rates apply to various income sources, including salary, interest, rent, commissions, and winnings. TDS is deducted at specified thresholds, such as 10% on interest exceeding ₹10,000 and 1% on property sales above ₹50 lakh. Higher rates apply for lottery winnings (30%) and non-compliant taxpayers (5% or twice the standard rate). Section 194P ensures automatic TDS deduction for senior citizens above 75 years. Additionally, TCS applies to specific goods and services like alcohol (1%), scrap (1%), and overseas tour packages (5%). Compliance with these rates is crucial for tax planning and avoiding penalties.
TDS Rates effective from 01st April 2025
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor. The payment includes salary, commission, professional fees, interest, rent, etc.
TDS section, Threshold and applicable TDS Rate for the Financial year 2025- 26 as follows-
| Section as per income tax Act | Particulars | Threshold limit for TDS applicability | Applicable TDS rate % |
| 192 | Salary Income | Income Tax Slab | Slab rates |
| Based on old and New Regime | |||
| 192 A | EPF – Premature withdrawal | Rs 50,000 | 10% |
| If no Pan, TDS @ 30% | |||
| 193 | Interest on Securites | Rs. 10,000 | 10% |
| 193 | Interest on Debentures | Rs 5,000 | 10% |
| 194 | DIVIDEND – Dividends | Rs 10,000 | 10% |
| 194 A | Interest other than on securities by banks / post office | Rs. 50,000 | 10% |
| (Rs 100,000 for Senior Citzens) | |||
| 194 A | Interest other than on securities by others | Rs. 10,000 | 10% |
| 194 B | Winnings from Lotteries / Puzzle / Game | Rs. 10,000 in respect of single transaction | 30% |
| 194 BB | Winnings from Horse Race | Rs. 10,000 in respect of single transaction | 30% |
| 194 C | Contractor-Single transaction- | Rs.30,000 | |
| Individual/HUF | 1% | ||
| -Others | 2% | ||
| 194 C | Contractor- Consolidated payment transaction- | Rs.1,00,000 | |
| Individual/HUF | 1% | ||
| -Others | 2% | ||
| 194 D | Payment of Insurance Commission | Rs. 20,000 | 5% (Individuals) |
| (Form 15G/H can be submitted) | 10% (Companies) | ||
| 194DA | Payment in respect of Life Insurance Policy | Rs 1,00,000 | 5% |
| 194E | Payment to non-resident sportsmen/sports association | – | 20% |
| 194 EE | Payment of NSS Deposits | Rs 2,500 | 10% |
| 194 G | Commission on Sale of Lottery tickets | Rs 20,000 | 5% |
| 194 H | Commission or Brokerage | Rs 20,000 | 5% |
| 194 I | Rent of Land, Building or Furniture | Rs. 6,0,000 | 10% |
| 194I | Rent of Plant & Machinery | Rs. 6,00,000 | 2% |
| 194 IB | RENT – Rental Expense | Rs 50,000 (per month) | 5% |
| (Tenant has to deduct TDS) | |||
| (Individuals who are not liable to Tax Audit) | |||
| 194 IA | Transfer of Immovable Property, other than Agricultural land | Rs. 50 lakh | 1% |
| 194IC | Payment of monetary consideration under Joint Development Agreements | – | 10% |
| 194J | Fees for professional or technical services | Rs 50,000 | 2% (or) 10% |
| 194LA | Payment of compensation on acquisition of certain immovable property | Rs 5,00,000 | 10% |
| 194 LB | Interest from Infrastructure Bond to NRI | NA | 5% |
| 194 LD | Interest on certain bonds and govt. Securities | NA | 5% |
| 194N | Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office: | > Rs 1cr | 2% |
| 194Q | Purchase of goods | Rs 50 lakh | 0.10% |
| 194T | 194T – Remuneration, Interest and Commission paid to partners | 20,000/- | 10% |
| 206AB | TDS on non-filers of ITR at higher rates | – | 5% or Twice the rates in force |
| 194P | TDS on Senior Citizen above 75 Years (No ITR filing cases) | – | Slab Rates |
| TCS – Tax collected at Source – Rates effective from 01st April 2025 | |||
| SECTION 206C (1) | |||
| TCS Deposit Challan Code | Goods & Services liable to TCS | TCS Rate (%) | |
| 6CA | Alcoholic liquor for human consumption | 1 | |
| 6CB | Timber obtained under Forest lease | 2.5 | |
| 6CC | Timber obtained by any mode other than under a forest lease | 2.5 | |
| 6CD | Any other forest produce not being timber or tendu leaves | 2.5 | |
| 6CE | Scrap | 1 | |
| 6C1 | Tendu Leaves | 5 | |
| 6CJ | Minerals, being coal or lignite or iron ore | 1 | |
| SECTION 206C (IC) | |||
| 6CF | Parking Lot | 2 | |
| 6CG | Toll Plaza | 2 | |
| 6CH | Mining & Quarrying | 2 | |
| SECTION 206C (IF) | |||
| 6CL | Motor Vehicle (any mode of payment) | 1 | |
| (Seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding 10 lakh Rupees) | |||
| SECTION 206C (IG) | |||
| 6C0 | Overseas Tour Program Package | 1,000,000 | 5 |
| (Every person being a seller of an overseas tour program package, who receives any amount from a buyer, being the person who purchases such package) | (TCS in case of Non-Furnishing of PAN/Aadhar 10%) | ||
| 6CP | Remittance under LRS for education loan taken from financial institution mentioned under section 80E(Amount or aggregate of the amounts in excess of 7 lakh rupees remitted by the buyer in a financial year, if the amount being remitted out is a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education) | Nil | |
| SECTION 206C (111) | |||
| 6CR | Sale of Goods | ||
| Every person, being a seller, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding 50 lakh rupees in any previous year, other than the goods being exported out of India or goods covered in sub-section (1) or sub-section (1F) or sub-section (1G) | Omitt. by Finance A 1- Act 2025 (w.e.f. 1-4-2025) | ||
