All You Need to Know About TDS Rates and Sections for FY 2025-26
Detailed handbook on TDS rates for the financial year 2025-26 addressing Sections 194A (interest income), 194C (contractual payments), 194I (rental payments), 194J (professional services), and 194Q (purchase of goods). Contains information on threshold limits and requirements for PAN.
Introduction
Tax Deducted at Source (TDS) is an essential aspect of the Indian tax framework. It makes certain that tax is gathered at the point of income generation. For Financial Year (FY) 2025-26, it is important for businesses, professionals, and taxpayers to be informed about the current TDS rates relevant under various sections of the Income Tax Act. Here's a comprehensive overview of the most commonly cited TDS sections, their relevant rates, and threshold limits.
Below is a section-wise summary of frequently utilized TDS regulations:
Section 194A – Interest (Excluding Interest on Securities)
Nature of Payment: Interest (excluding securities)
TDS Rate:
Individual/HUF: 10%
Others: 10%
If No/Invalid PAN: 20%
Threshold Limit: ₹10,000
Section 194C – Payments to Contractors
Nature of Payment: Payments made to contractors
TDS Rate:
Individual/HUF: 1%
Others: 2%
If No/Invalid PAN: 20%
Threshold Limit:
₹30,000 for a single payment
₹1,00,000 total in a financial year
Section 194H – Commission/Brokerage
Nature of Payment: Commission or brokerage
TDS Rate:
Individual/HUF: 2%
Others: 2%
If No/Invalid PAN: 20%
Threshold Limit: ₹20,000
Section 194I – Rent
194I(a) – Rent for Plant, Machinery, Equipment
TDS Rate: 2%
Threshold Limit: ₹50,000 per month
194I(b) – Rent for Land, Building, Furniture, Fittings
TDS Rate: 10%
Threshold Limit: ₹50,000 per month
Section 194J – Professional or Technical Service Fees
Nature of Payment:
- Technical Services, Call Centre, Royalty for Films: 2%
- Professional Services: 10%
TDS Rate (for both categories):
Individual/HUF: As outlined above
Others: As outlined above
If No/Invalid PAN: 20%
Threshold Limit: ₹50,000
Nature of Payment: Salary, Remuneration, Commission, Bonus, or Interest
TDS Rate:
Individual/HUF: 10%
Others: 10%
If No/Invalid PAN: 20%
Threshold Limit: ₹20,000
Relevant TDS Section for Turnover Exceeding ₹10 Crore in Previous Year
Section 194Q – TDS on Goods Purchase
Applicability: When turnover in the last financial year surpassed ₹10 crore
TDS Rate:
Individual/HUF: 0.1%
Others: 0.1%
If No/Invalid PAN: 5%
Threshold Limit: ₹50,00,000
Note: TCS under Section 206C(1H) will no longer apply from April 1, 2025, streamlining compliance for buyers.
| Section | Nature of Payment | TDS Rate | Threshold |
|---|---|---|---|
| 194A | Interest (non-security) | 10% | ₹10,000 |
| 194C | Contractors | 1%-2% | ₹30,000 (single), ₹1,00,000 (aggregate) |
| 194H | Commission/Brokerage | 2% | ₹20,000 |
| 194I(a) | Rent (Machinery/Equipment) | 2% | ₹50,000/month |
| 194I(b) | Rent (Building/Furniture) | 10% | ₹50,000/month |
| 194J | Technical Services | 2% | ₹50,000 |
| 194J | Professional Services | 10% | ₹50,000 |
| 194T | Payment to Partners | 10% | ₹20,000 |
| 194Q | Purchase of Goods | 0.1% | ₹50,00,000 |
Key Compliance Tip
Always confirm the PAN information of the payee to prevent a higher TDS deduction of 20% or 5% under the respective sections. Accurate and timely filing of TDS returns also facilitates smooth processing of the payee's income tax return and helps avoid notices or penalties.
Grasping and adhering to the applicable TDS rates is crucial for businesses, professionals, and taxpayers. With changes introduced in FY 2025-26—especially concerning TCS under Section 206C(1H)—remaining informed ensures compliance and financial effectiveness.
Need help with TDS compliance or income tax filing? Reach out to our team at myITRonline for efficient and professional assistance.
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Note-All the aforementioned information in the article is taken from authentic resources and has been published after moderation. Any change in the information other than fact must be believed as a human error. For queries mail us at marketing@myitronline.com
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Krishna Gopal Varshney
An editor at apnokacaKrishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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Krishna Gopal Varshney
An editor at Myitronline
Krishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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