TDS Rates Chart for FY 2024-25 (AY 2025-26). Tax Deducted at Source (TDS) is a crucial mechanism employed by the Indian government to collect taxes at the source of income generation. This system ensures a steady flow of revenue and minimizes tax evasion.
This article will guide you about TDS rates applicable for the Financial Year 2024-25 (Assessment Year 2025-26), covering various income categories, threshold limits, and applicable sections. We will also provide examples, tables, and FAQs to make the information more accessible and understandable.
Also Read-ITR FY 2024-25: How to File Income Tax Return Without Form 16
What is TDS?
TDS stands for Tax Deducted at Source. It is a method of collecting income tax in India, where a certain percentage of tax is deducted at the time of making specified payments such as salaries, interest, rent, etc. The deducted amount is then remitted to the government on behalf of the payee.
Importance of TDS.
- Ensures Regular Revenue: TDS ensures a regular inflow of revenue to the government.
- Prevents Tax Evasion: By deducting tax at the source, it minimizes the chances of tax evasion.
- Simplifies Tax Collection: It simplifies the process of tax collection for the government.
TDS Rate Chart for FY 2024-25 (AY 2025-26).
The TDS rates for the Financial Year 2024-25 (Assessment Year 2025-26) are specified under various sections of the Income Tax Act. Below is a detailed table outlining the TDS rates, threshold limits, and nature of payments.
| Section | Nature of Payment | Threshold Limit (Rs) | TDS Rate (%) |
|---|---|---|---|
| 192 | Payment of salary | Basic exemption limit | Normal Slab Rate |
| 192A | Premature EPF withdrawal | 50,000 | 10% (20% without PAN) |
| 193 | Interest on securities | 10,000 | 10% |
| 194 | Payment of any dividend | 5,000 | 10% |
| 194A | Interest other than “Interest on securities” | 40,000 (50,000 for senior citizens) | 10% |
| 194B | Income by way of winnings from lotteries, crossword puzzles, card games, and other games of any sort | 10,000 | 30% |
| 194BA | Income from online games | NA | 30% |
| 194BB | Income from horse races | 10,000 | 30% |
| 194C | Payment to contractor/sub-contractor (HUF/Individuals) | Single contractor payment 30,000 Aggregate contractor payment 1,00,000 | 1% |
| 194C | Payment to contractor/sub-contractor (Others) | Single contractor payment 30,000 Aggregate contractor payment 1,00,000 | 2% |
| 194D | Insurance commission (Domestic Companies) | 15,000 | 10% |
| 194D | Insurance commission (Other than companies) | 15,000 | 5% |
| 194DA | Payment in respect of life insurance policy | 1,00,000 | 5% |
| 194E | Payment to non-resident sportsmen/sports association | NA | 20% |
| 194EE | Payment in respect of deposit under National Savings scheme | 2,500 | 10% |
| 194F | Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India | NA | 20% |
| 194G | Commission, etc., on sale of lottery tickets | 15,000 | 5% |
| 194H | Commission or brokerage | 15,000 | 5% |
| 194-I | Rent – Plant & Machinery | 2,40,000 | 2% |
| 194-I | Rent – Land or building or furniture or fitting | 2,40,000 | 10% |
| 194J | Fees for professional or technical services | 30,000 | 10% |
| 194LBB | Investment fund paying an income to a unit holder | NA | 10% (Non-Resident 30%, Foreign Company 40%) |
| 194LBC | Income in respect of investment made in a securitisation trust | NA | Individual – 25% or HUF – 30%, Domestic Company – 10%, NRI – 30%, Foreign Company – 40% |
| 194M | Payments by Individual/HUF not liable to deduct TDS | 50,00,000 | 5% |
| 194N | Payments of certain amounts in cash (i.e., cash withdrawals) | 1,00,00,000 | 2% |
| 194O | TDS on e-commerce transactions | 5,00,000 | 1% |
| 194P | Senior citizen above 75 years of age having salary and interest income | Not Applicable | Slab rates |
| 194Q | Payments made for the purchase of goods | 50,00,000 | 0.10% |
| 194R | Perquisite provided | 20,000 | 10% |
| 194S | TDS on the payment of cryptocurrencies or other virtual assets | Not Applicable | 1% |
| 196A | Income from mutual funds to non-residents | NA | 20% |
| 196B | Income from units (including long-term capital gain on transfer of such units) to an offshore fund | NA | 10% |
| 196C | Income from foreign currency bonds or GDR of an Indian company (including long-term capital gain on transfer of such bonds or GDR) | NA | 10% |
| 196D | Income of foreign Institutional Investors from securities | NA | 20% |
Key Changes in TDS Provisions for FY 2024-25.
- TDS on Online Gaming (Section 194BA):From April 1, 2023, a 30% TDS is to be deducted on income earned from online games when withdrawn. This includes games of skill like online poker, rummy, or fantasy sports, and games of chance like online lotteries or roulette.
- TDS on NRI Income from Mutual Funds (Section 196A):NRIs can choose to pay a lower tax rate on income earned from investments in mutual funds by providing a tax residency certificate. Previously, NRIs had to pay TDS of 20% on income earned from mutual funds.
- TDS on PF Withdrawal Without PAN (Section 192A):Employees withdrawing from their provident fund without a PAN will receive their balance after a 20% tax deduction. Previously, tax was deducted at the maximum marginal rate, which could go up to 42.74%.
- TDS on Interest Earned from Securities (Section 193):From April 1, 2023, tax is to be deducted from interest earned on listed securities in materialized form like debentures. Previously, TDS was not deducted on income from interest on securities.
- TDS on Co-operative Society Cash Withdrawal (Section 194N):From April 1, 2023, cash withdrawn above Rs 3 crore by a cooperative society will be taxed at 2%. Previously, the limit was Rs 1 crore.
Examples of TDS Calculation.
Example 1: TDS on Salary (Section 192)
Scenario:
An employee earns a monthly salary of Rs 1,00,000. The employee has opted for the new tax regime.
Calculation:
Annual Salary: Rs 1,00,000 x 12 = Rs 12,00,000
Under the new tax regime, the tax slab for income between Rs 10,00,001 and Rs 12,00,000 is 20%.
TDS: 20% of Rs 2,00,000 (Rs 12,00,000 – Rs 10,00,000) = Rs 40,000
Example 2: TDS on Rent (Section 194-I)
Scenario:
A company pays an annual rent of Rs 3,00,000 for office space.
Calculation:
Threshold Limit: Rs 2,40,000
TDS Rate: 10%
TDS: 10% of Rs 3,00,000 = Rs 30,000
Example 3: TDS on Interest (Section 194A)
Scenario:
An individual earns interest of Rs 60,000 from a bank deposit.
Calculation:
Threshold Limit: Rs 40,000 (Rs 50,000 for senior citizens)
TDS Rate: 10%
TDS: 10% of Rs 60,000 = Rs 6,000
FAQs on TDS.
Q1: What is the due date for depositing TDS?
The due date for depositing TDS is the 7th of the following month in which TDS is deducted. For March, the due date is April 30th for non-government deductors and April 7th for government deductors.
Q2: What happens if TDS is not deducted or deposited on time?
Failure to deduct or deposit TDS on time can result in penalties and interest charges. The deductor may also be liable to pay a fee of Rs 200 per day for late furnishing of TDS/TCS statements.
Q3: Can TDS be refunded?
Yes, if the total TDS deducted exceeds the actual tax liability, the excess amount can be claimed as a refund by filing an income tax return.
Q4: Is TDS applicable on gifts?
TDS is not applicable on gifts unless they are given as part of a business or profession. In such cases, TDS may be applicable under Section 194R.
Q5: How can I check the TDS deducted on my income?
You can check the TDS deducted on your income by viewing Form 26AS on the income tax e-filing portal. This form provides a consolidated statement of all TDS deducted on your income.
Conclusion
Understanding the TDS rates and provisions is essential for both deductors and deductees to ensure compliance with tax laws and avoid penalties. The TDS rate chart for FY 2024-25 (AY 2025-26) provides a comprehensive overview of the applicable rates, threshold limits, and sections for various types of payments. By staying informed and adhering to the TDS regulations, taxpayers can ensure smooth tax operations and contribute to the nation’s revenue.
For any specific queries or complex situations, it is always advisable to consult a tax professional or refer to the official guidelines issued by the Income Tax Department of India.
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