Here is the TDS (Tax Deducted at Source) Rate Chart for the Financial Year 2024-25 (Assessment Year 2025-26):
| Section | Nature of Payment | Threshold Limit | TDS Rate | Effective Date |
|---|---|---|---|---|
| 192 | Salary Income | Basic exemption limit of employee | As per applicable income tax slab rates | – |
| 192A | Premature withdrawal from EPF | ₹50,000 | 10% | – |
| 193 | Interest on securities | ₹5,000 for debentures; ₹10,000 for 8% Savings Bonds; No limit for others | 10% | – |
| 194 | Dividend | ₹5,000 | 10% | – |
| 194A | Interest other than interest on securities | ₹50,000 for senior citizens; ₹40,000 for others | 10% | – |
| 194B | Winnings from lotteries, card games, etc. | ₹10,000 (aggregate) | 30% | – |
| 194BA | Winnings from online games | No threshold | 30% | – |
| 194BB | Winnings from horse races | ₹10,000 (aggregate) | 30% | – |
| 194C | Payment to contractors/sub-contractors | ₹30,000 per transaction; ₹1,00,000 aggregate per annum | 1% for individuals/HUF; 2% for others | – |
| 194D | Insurance commission | ₹15,000 | 5% (reduced to 2% effective 1 April 2025) | 1 April 2025 |
| 194DA | Life insurance policy payouts | ₹1,00,000 | 5% (reduced to 2% effective 1 October 2024) | 1 October 2024 |
| 194G | Commission on sale of lottery tickets | ₹15,000 | 5% (reduced to 2% effective 1 October 2024) | 1 October 2024 |
| 194H | Brokerage/commission payments | ₹15,000 | 5% (reduced to 2% effective 1 October 2024) | 1 October 2024 |
| 194I(a) | Rent for plant/machinery | ₹2,40,000 per annum | 2% | – |
| 194I(b) | Rent for land/building/furniture/fittings | ₹2,40,000 per annum | 10% | – |
| 194-IA | Payment on transfer of immovable property (excluding agricultural land) | ₹50,00,000 | 1% | – |
| 194-IB | Rent paid by individuals/HUF (not liable to audit) | ₹50,000 per month | 5% (reduced to 2% effective 1 October 2024) | 1 October 2024 |
| 194-IC | Payment under Joint Development Agreements | No threshold | 10% | – |
| 194J | Fees for professional or technical services | ₹30,000 | 10% for professional services; 2% for technical services | – |
| 194K | Income from units of a mutual fund | No threshold | 10% | – |
| 194LA | Compensation on acquisition of immovable property | ₹2,50,000 | 10% | – |
The recent Union Budget 2025 has introduced several significant changes to the Tax Deducted at Source (TDS) provisions, aiming to simplify tax compliance and provide relief to taxpayers. Here are the key updates:
1. Increased TDS Thresholds:
- Interest Income (Section 194A): The TDS exemption limit for interest income has been raised:
- For senior citizens, the threshold has increased from ₹50,000 to ₹1,00,000 per financial year.
- For other individuals, the limit has been elevated from ₹40,000 to ₹50,000 per financial year.
- Dividend Income (Section 194): The threshold for TDS on dividend income has been doubled from ₹5,000 to ₹10,000 per financial year.
- Rent Payments (Section 194-I): The annual TDS threshold on rent payments has been increased from ₹2.4 lakh to ₹6 lakh.
- Professional and Technical Services (Section 194J): The TDS threshold for payments towards professional or technical services has been raised from ₹30,000 to ₹50,000 per financial year.
2. Rationalization of TDS Rates:
- Insurance Commission (Section 194D): The TDS rate on insurance commission has been reduced from 5% to 2%, effective from April 1, 2025.
- Life Insurance Policy Payouts (Section 194DA): The TDS rate on life insurance policy payouts has been decreased from 5% to 2%, effective from October 1, 2024.
- Commission on Sale of Lottery Tickets (Section 194G): The TDS rate has been lowered from 5% to 2%, effective from October 1, 2024.
- Brokerage or Commission Payments (Section 194H): The TDS rate has been reduced from 5% to 2%, effective from October 1, 2024.
3. Removal of Overlapping Provisions:
- The Budget proposes to eliminate the Tax Collected at Source (TCS) on the sale of goods, effective from April 1, 2025. Consequently, only TDS at 0.1% will be applicable on payments made by the buyer to a resident seller, provided the sale consideration exceeds ₹50 lakh.
These adjustments are designed to reduce the compliance burden on taxpayers and enhance the efficiency of the tax system. It’s advisable to consult with a tax professional or refer to official government notifications for detailed guidance and to understand how these changes may impact your specific tax obligations.