TDS Rate Chart for FY 2025-26 (AY 2026-27) — Complete India Reference
Complete TDS rate chart for FY 2025-26 (AY 2026-27) — new Section 194T (10%), Section 194H + 194-IB rate cuts to 2%, Section 206AB removal.
What’s new in FY 2025-26 (the headline changes)
The Finance Act 2025 introduced major rationalisations to the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) framework to reduce compliance burden and free up working capital.
If you manage a finance team or run payroll, update your ERPs and accounting systems to reflect these headline changes for the new financial year:
- NEW Section 194T: partnership firms and LLPs must now deduct TDS at 10% on remuneration (salary, bonus, commission, interest) paid to partners exceeding ₹20,000 (per Finance Act 2025).
- Section 194H (commission/brokerage): threshold raised to ₹20,000 (per Finance Act 2025). Rate was earlier cut from 5% to 2% by Finance (No. 2) Act 2024 effective 1 October 2024.
- Section 194-IB (rent by individuals/HUFs): rate previously cut from 5% to 2% by Finance (No. 2) Act 2024 effective 1 October 2024 (unchanged in FY 2025-26).
- Section 194-I (rent thresholds): restructured to a monthly basis of ₹50,000/month for both equipment and property rentals (per Finance Act 2025). Replaces the earlier ₹2,40,000 annual aggregate threshold.
- Section 194A (senior citizen interest): threshold for TDS on bank / post office interest for senior citizens doubled to ₹1,00,000; non-senior bank interest raised to ₹50,000 (per Finance Act 2025).
- Section 194D / 194G (insurance + lottery commission): thresholds raised to ₹20,000 (from ₹15,000) (per Finance Act 2025).
- Section 194J (professional / technical fees): threshold raised to ₹50,000 per nature of payment (from ₹30,000) (per Finance Act 2025).
- Section 194LA (compulsory land acquisition): threshold raised to ₹5,00,000 (from ₹2,50,000) (per Finance Act 2025).
- Section 194LBC (securitisation trust): rate reduced to a flat 10% (per Finance Act 2025).
- Sections 206AB + 206CCA REMOVED: deductors no longer need to penalise non-ITR filers with higher withholding rates (per Finance Act 2025).
Effective dates — when the new rates kick in
The TDS rates, modified thresholds, and new sections outlined in this chart apply to all payments or credits made on or after 1 April 2025 (i.e., for Financial Year 2025-26 = Assessment Year 2026-27).
Section 192 — Salary TDS (special case)
Unlike other TDS sections that operate on flat percentages, Section 192 (TDS on salary) operates on average slab rates. Employers must estimate the employee’s total income for the year, calculate applicable tax according to the employee’s chosen regime (the new regime is the default), and deduct the resulting liability in equal monthly instalments.
For the exact slab rates and ₹60,000 Section 87A rebate mechanics for FY 2025-26, see the Income Tax overview.
TDS Rate Chart — Resident Payees (full table)
| Section | Nature of payment | Threshold (FY 2025-26) | TDS rate | Notes |
|---|---|---|---|---|
| 192 | Salary | Basic exemption limit | Slab rate | Regime-aware (new/old) |
| 192A | Premature EPF withdrawal | ₹50,000 | 10% | 20% if PAN missing |
| 193 | Interest on securities | ₹10,000 | 10% | |
| 194 | Dividends | ₹5,000 | 10% | |
| 194A | Interest (banks, co-ops, post office) | ₹50,000 (ind) / ₹1,00,000 (senior) | 10% | Senior threshold doubled (per Finance Act 2025) |
| 194A | Interest from others (unsecured loans) | ₹10,000 | 10% | |
| 194B | Lottery / puzzles | ₹10,000 | 30% | |
| 194BA | Online game winnings | No threshold | 30% | Calculated on net winnings |
| 194BB | Horse race winnings | ₹10,000 | 30% | |
| 194C | Contractor / sub-contractor | ₹30,000 single / ₹1,00,000 FY | 1% (ind/HUF) / 2% (other) | |
| 194D | Insurance commission | ₹20,000 | 5% | Threshold raised (per Finance Act 2025) |
| 194DA | LIC maturity (income portion) | ₹1,00,000 | 5% | Only on taxable income component |
| 194E | Sportsmen / sports association (NR) | No threshold | 20% | |
| 194G | Lottery ticket commission | ₹20,000 | 5% | Threshold raised (per Finance Act 2025) |
| 194H | Commission / brokerage | ₹20,000 | 2% | Rate cut + threshold raised (per Finance Act 2025) |
| 194-I(a) | Rent — plant / machinery / equipment | ₹50,000 per month (₹6,00,000 annual) | 2% | Monthly threshold shift (per Finance Act 2025) |
| 194-I(b) | Rent — land / building / furniture | ₹50,000 per month (₹6,00,000 annual) | 10% | Monthly threshold shift (per Finance Act 2025) |
| 194-IA | Immovable property purchase (non-agri) | ₹50,00,000 | 1% | On higher of consideration or stamp value |
| 194-IB | Rent paid by ind/HUF (non-audit) | ₹50,000 per month | 2% | Rate cut from 5%. Deduct in last month of FY / tenancy |
| 194-IC | Joint Development Agreement | No threshold | 10% | |
| 194J(a) | Royalties / technical fees / call centre | ₹50,000 | 2% | Threshold raised (per Finance Act 2025) |
| 194J(b) | Professional services / director fees | ₹50,000 | 10% | No threshold for director sitting fees. Threshold raised (per Finance Act 2025) |
| 194K | Income from mutual funds | ₹10,000 | 10% | |
| 194LA | Compulsory property acquisition | ₹5,00,000 | 10% | Threshold raised (per Finance Act 2025) |
| 194LBA | Income from business trust | Various | Varies | Rate depends on nature of income distributed |
| 194LBB | Investment fund income | Various | Varies | |
| 194LBC | Securitisation trust income | No threshold | 10% | Reduced (per Finance Act 2025) |
| 194LD | Interest to FII (rupee bonds) | No threshold | 5% | |
| 194M | Contractor / commission / professional by ind/HUF (non-audit) | ₹50,00,000 annual | 5% | |
| 194N | Cash withdrawal | > ₹1 crore | 2% | |
| 194N | Cash withdrawal (ITR non-filer) | ₹20L to ₹1cr / > ₹1cr | 2% / 5% | |
| 194O | E-commerce operator → participant | ₹5,00,000 | 0.1% | |
| 194P | Super senior (75+) bank pension + interest | Basic exemption | Slab rates | Bank files return on behalf of senior citizen |
| 194Q | Purchase of goods (buyer turnover > ₹10cr) | ₹50,00,000 | 0.1% | |
| 194R | Business benefits / perquisites | ₹20,000 | 10% | |
| 194S | Virtual Digital Assets (crypto transfer) | ₹10,000 / ₹50,000 | 1% | |
| 194T | Partnership firm / LLP → partner (salary, bonus, commission, interest) | ₹20,000 | 10% | NEW section (per Finance Act 2025, effective 1 April 2025) |
TDS Rate Chart — Non-Resident Payees (Section 195)
When making payments to Non-Resident Indians (NRIs) or foreign companies, Section 195 applies. TDS is generally deducted at the rates in force or the rate provided in the Double Taxation Avoidance Agreement (DTAA), whichever is more beneficial to the payee.
To claim DTAA benefits, the non-resident must furnish a Tax Residency Certificate (TRC) and Form 10F.
- Long-Term Capital Gains (LTCG) on listed equity (Sec 112A): 12.5%
- Short-Term Capital Gains (STCG) on listed equity (Sec 111A): 20%
- LTCG on other assets: 12.5%
- Interest (general): 20%
- Interest on specified bonds / loans (Sec 194LC, 194LD): 5%
- Royalty / Fees for Technical Services (FTS): 20% (or DTAA rate if lower)
- Other income: as per the Income Tax Act or applicable DTAA (whichever is lower)
TCS Rate Chart — Section 206C
Tax Collected at Source (TCS) obligates the seller to collect tax from the buyer at the time of sale.
| Sub-section | Item / nature of receipt | TCS rate | Threshold limit |
|---|---|---|---|
| 206C(1) | Alcoholic liquor for human consumption | 1% | None |
| 206C(1) | Tendu leaves | 5% | None |
| 206C(1) | Timber and other forest produce | 2.5% | None |
| 206C(1) | Scrap | 1% | None |
| 206C(1) | Minerals (coal, lignite, iron ore) | 1% | None |
| 206C(1F) | Sale of motor vehicle | 1% | Values exceeding ₹10,00,000 |
| 206C(1G) | LRS — overseas tour package | 5% / 20% | Up to ₹7L / above ₹7L |
| 206C(1G) | LRS — education (loan-funded) | 0.5% | Above ₹7L |
| 206C(1G) | LRS — education / medical (other than loan) | 5% | Above ₹7L |
| 206C(1G) | LRS — general purpose (investments, etc.) | 20% | Above ₹7L |
| 206C(1H) | Sale of goods (by seller with > ₹10cr turnover) | 0.1% | Receipts exceeding ₹50,00,000 |
Special cases — PAN not furnished, lower deduction certificates
Section 206AA (PAN not furnished): If the deductee does not provide their PAN or Aadhaar number, the deductor must withhold tax at a flat rate of 20%, or the applicable statutory rate, whichever is higher.
Section 197 (lower deduction certificate): If a deductee provides a formal certificate issued by their Assessing Officer under Section 197 (applied via Form 13), the deductor must withhold TDS strictly at the reduced rate specified in the certificate, rather than the standard rates above.
Section 206AB + 206CCA removal — what changed
Historically, Sections 206AB and 206CCA forced deductors to check a specialised portal to determine if the payee had filed their Income Tax Returns for previous years. If the payee was marked as a “specified person” (non-filer), the deductor had to apply penal TDS/TCS rates (usually double the normal rate, or 5%, whichever was higher).
To dramatically ease the compliance burden, these sections have been entirely REMOVED (per Finance Act 2025) effective 1 April 2025. You no longer need to perform compliance background checks on your vendors before processing payments — simply deduct tax at the standard rates in this chart.
How to use this chart in practice
For finance teams and accounts payable departments, follow this 4-step workflow:
- Identify the payment: determine the exact nature of the service or supply (e.g., is it a professional service under 194J or a contract under 194C?).
- Check the threshold: track aggregate payments to that specific vendor/PAN over the financial year. Tax is only deducted once the threshold is crossed.
- Apply the rate: calculate TDS on the exact invoice amount (exclusive of GST, as per CBIC circulars, if GST is shown separately).
- Deposit and file: deposit the deducted amount to the Government using Challan ITNS 281 by the 7th of the following month, and file the appropriate quarterly statement (Form 24Q, 26Q, or 27Q).
For execution support, see the TDS Return Filing service. For full mechanics, see the TDS overview pillar.
Frequently asked questions
What are the major TDS changes for FY 2025-26?
Finance Act 2025 introduced Section 194T (10% on partner remuneration), reduced TDS under 194H and 194-IB to 2%, raised the 194H threshold to ₹20,000, raised the 194A senior-citizen interest threshold to ₹1,00,000, restructured 194-I rent threshold to monthly basis, and removed Sections 206AB/206CCA penal rates for non-filers.
How does the new Section 194T work?
Effective 1 April 2025, partnership firms and LLPs must deduct TDS at 10% on salary, bonus, commission, or interest paid to their partners if the aggregate payment exceeds ₹20,000 in a financial year.
What is the new TDS rate for commission and brokerage under Section 194H?
The TDS rate under Section 194H has been reduced from 5% to 2%, and the threshold has been raised to ₹20,000 per financial year (per Finance Act 2025).
How does the removal of Section 206AB impact me?
With the removal of Section 206AB effective 1 April 2025, deductors are no longer required to check the ITR filing compliance of deductees and apply double the standard TDS rate. Just deduct at the standard rate.
What happens if a payee does not furnish their PAN?
Under Section 206AA, if a deductee fails to furnish a valid PAN, TDS must be deducted at a flat rate of 20%, or the applicable statutory rate, whichever is higher.
What is the senior citizen interest threshold under Section 194A?
For FY 2025-26, banks and post offices will not deduct TDS on interest income for senior citizens until the total interest exceeds ₹1,00,000 in the financial year.
When do the new FY 2025-26 TDS rates apply?
The new thresholds and reduced rates introduced by the Finance Act 2025 take effect for all deductions made on or after 1 April 2025.
What is the TDS rate for payments to non-residents (NRIs)?
Payments to NRIs are governed by Section 195. Rates depend on the nature of income (e.g., 12.5% for LTCG, 20% for STCG, 20% for royalty) but can be lowered if the payee benefits from a Double Taxation Avoidance Agreement (DTAA) and furnishes a TRC + Form 10F.