Section-wise TDS Rate Table for FY 2025-26

Objective of TDS in Income Tax Act

The main purpose of TDS is to collect tax in advance, distribute the tax burden evenly, and make compliance easier. It works on a “pay-as-you-earn” basis.

Impact of TDS on Taxpayers and Businesses

For taxpayers, TDS provides tax credits automatically in  Form 26AS . For businesses, TDS compliance means monitoring TDS threshold limits, deducting at the right rates, depositing tax within TDS due dates, and filing accurate quarterly returns.

Threshold Limits for TDS Applicability

Thresholds are fixed amounts below which no TDS is required. They prevent unnecessary deductions for small incomes.

Minimum Amount Liable for Deduction

• Salary: No threshold, tax as per slabs.
• Interest: ₹50,000 (senior citizens), ₹10,000 (others).
• Rent: ₹6 lakh yearly.
• Commission: ₹20,000 yearly.
• Professional fees: ₹30,000 yearly.

Exemptions and Relaxation Cases

Taxpayers can submit  Form 15G or 15H  to claim exemption if their income is below taxable limits. Certain government bodies and notified entities are also exempt from TDS.

Due Dates for TDS Deposit and Return Filing

Timely deposit and filing are key to compliance. Missing TDS due dates leads to penalties and interest.

TDS Payment Due Dates for FY 2025-26

Payments are made via  TDS challan  and must follow the schedule below.

• 7th of the following month for all months except March.
• For March deductions: 30th April.

TDS Return Filing Due Dates (Form 24Q, 26Q, 27Q, 27EQ)

For steps and forms, see  TDS Return Filing  guidelines before the deadlines.

• Q1 (Apr–Jun): 31st July
• Q2 (Jul–Sep): 31st October
• Q3 (Oct–Dec): 31st January
• Q4 (Jan–Mar): 31st May

TDS is not only about the percentage printed in a rate chart. In real work, three things decide whether your TDS is correct or will create problems later – PAN, non resident (NR) rules, and threshold limits. CAs should always check all three together, not in isolation.

PAN and higher TDS

A correct PAN is the starting point of clean TDS compliance.

• If the deductee does not give PAN or gives an invalid PAN where it is mandatory, the deductor may have to deduct TDS at a higher rate under special provisions.
• Wrong or missing PAN means the TDS may not reflect properly in Form 26AS or AIS of the payee, which then leads to refund delays, mismatch notices and extra work for everyone.
• For large vendors and employees, it is better to verify PAN once and keep a proper record instead of trusting whatever is written in an email or invoice.

In short, always treat PAN as a compliance input, not just a field to be filled.

TDS for non residents (NR rates)

TDS on payments to non residents is more sensitive than normal resident TDS.

• NRs are often covered under different sections and special rates for interest, royalty, fees for technical services, capital gains and other incomes.
• In many cases, a Double Taxation Avoidance Agreement (DTAA) can reduce the TDS rate, but only if the non resident provides proper tax residency proof and related declarations.
• Surcharge and cess rules may also apply differently, so the effective TDS rate is not always the same as the basic section rate.

Because of this, any payment to a non resident should be checked carefully, with proper documentation, instead of applying resident TDS logic by habit.

Threshold limits and aggregation

Most TDS sections have threshold limits, meaning TDS starts only after the payment crosses a certain level.

Important points.

• Some sections look at each payment, while many look at the total paid to a party during the financial year.
• For example, contract payments, professional fees and rent usually check the yearly aggregate per payee.
• Bank interest thresholds can differ based on whether the payer is a bank, co operative society or others, and may be higher for some senior citizens in specific cases.
• If a business has multiple locations or branches, it must still ensure that thresholds are tracked per PAN per year, not only branch wise, wherever the law expects aggregation.

Wrong understanding of thresholds is one of the biggest reasons for both unnecessary TDS (hurting cash flow) and under deduction (leading to demand and interest).

Higher TDS for specified non filers

Apart from PAN and normal section rates, some rules apply higher TDS to specified non filers of returns.

• In such cases, the system or utility may show that the deductee falls in a higher rate category because they have not filed ITRs for certain years.
• The deductor then has to apply the higher of the section rate and the special non filer rate.

This is why it is important to periodically download and sync the latest TDS tools or status data, instead of using old Excel sheets or static checklists.

Putting it all together

For practical TDS work, every payment should be checked on four lines.

1. Who is the payee – resident or non resident, PAN available or not, normal or specified non filer.
2. What is the nature of payment – salary, interest, commission, professional fees, contract, rent, etc.
3. Which section applies and what is its threshold – per transaction or per year.
4. Has the threshold been crossed and is a higher rate triggered by PAN or non filer status.

If these questions are answered clearly and documented, most TDS notices, short deduction demands and 26AS mismatches can be avoided before they even arise.

Conclusion

Understanding TDS on salary,  TDS on rent , TDS on interest, and other sections is essential for compliance in FY 2025-26. With revised TDS threshold limits and strict TDS due dates, businesses must ensure timely deduction, deposit, and return filing. For taxpayers, TDS simplifies tax payment by giving advance credit at the time of income itself.