For the Financial Year 2025-26 (Assessment Year 2026-27),
Below is a summary of the current TDS rates for the most common transactions in India:
| Section | Nature of Payment | Threshold | TDS Rate (%) |
|---|---|---|---|
| 192 | Salary | – | As per income tax slab rate for the employee |
| 192A | Premature EPF withdrawal | ₹50,000 | 10 |
| 193 | Interest on securities | ₹10,000 | 10 |
| 194 | Dividend income | ₹10,000 | 10 |
| 194A | Interest (bank/post office/others) | ₹50,000 / ₹10,000 | 10 |
| 194K | Dividend from mutual funds | ₹10,000 | 10 |
| 194B | Winnings from lottery & puzzles | ₹10,000 | 30 |
| 194BA | Winnings from online games | – | 30 |
| 194BB | Winnings from horse races | ₹10,000 | 30 |
| 194C | Payments to contractors | ₹30,000 (single)/ ₹1,00,000 (annual) | 1% (individual/HUF) / 2% (others) |
| 194D | Insurance commission | ₹20,000 | 2% |
| 194DA | Life insurance policy payout | ₹1,00,000 | 2% |
| 194H | Commission / brokerage | ₹20,000 | 2% |
| 194-I | Rent | ₹50,000/month | 2% (plant & machinery) / 10% (land & building) |
| 194J | Professional/technical fees | ₹50,000 | 10% (general) / 2% (technical/royalty, etc.) |
| 194M | Payment by individual/HUF | ₹50 lakh | 2% |
| 194Q | Purchase of goods by buyer | >₹50 lakh | 0.1% |
| 194R | Business benefits/perks | ₹20,000 | 10% |
| 194S | Virtual Digital Asset transfer | ₹50,000/₹10,000 | 1% |
Important Changes & Notes
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Reduced Rates: Rent paid by individuals/HUF not under audit (194IB) was recently reduced from 5% to 2% & limit will be the same i.e Rs. 50000 Per Month
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Missing PAN: If the recipient (payee) does not provide a valid PAN, the TDS rate generally jumps to 20% (or the maximum marginal rate in some cases).
Who Must Deduct TDS?
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All Entities: Companies, firms, and local authorities.
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Individuals/HUF: Only if they are subject to a tax audit in the preceding year (i.e., business turnover > ₹1 Crore or professional receipts > ₹50 Lakh).
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