Section-wise TDS Rate Table for FY 2025-26
The Income Tax Act prescribes different TDS rates on salary, rent, interest, professional fees, and other payments. For FY 2025-26, taxpayers and businesses need to be aware of updated rates, threshold limits, and due dates to stay compliant. This guide explains everything clearly, with section-wise tables and examples.
What is TDS and Why is it Important?
Tax Deducted at Source (TDS) is a system where tax is deducted at the time income is paid, rather than at the year-end. It ensures steady government revenue and reduces tax evasion. For taxpayers, it means advance payment of taxes and smooth credit adjustment when filing returns.
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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.
Section-wise TDS Rate Table for FY 2025-26
Different sections of the Income Tax Act cover different types of payments. Knowing the rates and limits under each section is essential for correct deduction.
| Section | Nature of Payment | Threshold Limit | TDS Rate |
|---|---|---|---|
| 192 | Tds on salary | N/A | Slab Rate |
| 194A | Tds on interest | ₹50,000 (banks), ₹1 lakh (senior citizens), ₹10,000 (others) | 10% |
| 194I | Tds on rent | ₹6 lakh p.a. or ₹50,000 monthly | 10% (land/building), 2% (PL/Furniture) |
| 194J | Tds on professional fees | ₹30,000 p.a. | 10% |
| 194H | Tds on commission/brokerage | ₹20,000 p.a. | 2% |
| 194/194K | Tds on dividend | ₹10,000 p.a. | 10% |
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
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.
As a Chartered Accountant with over 18 years of experience, I have honed my skills in the field and developed a genuine passion for writing. I specialize in crafting insightful content on topics such as GST, income tax, audits, and accounts payable. By focusing on delivering information that is both engaging and informative, my aim is to share valuable insights that resonate with readers.
Frequently Asked Questions
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What is the TDS limit for bank interest in 2025-26?
No TDS is deducted if bank interest is below ₹50,000 for senior citizens or ₹10,000 for others.
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What is the threshold limit for TDS deduction under Section 194C?
Payments to contractors are exempt if a single contract is below ₹30,000 or yearly total is below ₹1 lakh.
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What is the penalty for late deduction or payment of TDS?
Interest of 1% per month for late deduction and 1.5% per month for late deposit applies, along with late filing fees.
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What happens if the correct TDS rate isn’t applied?
The deductor may be liable to pay the shortfall, face penalties, and risk disallowance of expenses in tax computation.
