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TDS Rates Chart: Plan Your Investments Wisely

Updated May 13, 2025

TDS Rates Chart

In a Tax Deducted at Source (TDS) system, the payer deducts tax before making payments to the receiver in a typical business environment. This unique system to lessen the burden of taxes on beneficiaries applies to various cases, such as salaries, interest, rent, and consultation fees. This system not only helps in preventing tax evasion but also simplifies tax compliance for individuals and businesses. Without a clear understanding of TDS rates, financial planning seems like a daunting task. This is where you might need a TDS rate chart that outlines key provisions under the Income Tax Act to help you make informed investment decisions.

What is TDS?
How does TDS work?
Importance of TDS in Investment Planning
TDS Rates for the FY 2024-2025 (AY 2025-2026)
Recent Changes in TDS and Implications
TDS Rates Applicable on NRI (other than a Company)
TDS Rate Charts for Domestic Companies
TDS Rate Charts for Company is Not a Domestic Company
Strategies to Optimise TDS in your Investment Portfolio

What is TDS?

According to the Income Tax Act 1961, every person or company is obligated to pay taxes when their income crosses specified limits.

The Indian tax department uses TDS as their distinct method to reduce taxpayer tax payment responsibilities. TDS stands for Taxes Deducted at Source.

How does TDS work?

In the instance of a business transaction, the payer must subtract specific taxes that represent the receiver before making the deposit to the government, and then the payment can commence.

Let’s say a freelancer is hired for a project worth Rs. 60,000.

The client agrees to pay Rs. 20,000 as an advance and Rs. 40,000 after project completion.

Assume the applicable TDS rate is 10% under Section 194J (for professional services).

Here’s what happens:

TDS on Rs. 20,000 advance = Rs. 2,000
TDS on Rs. 40,000 final payment = Rs. 4,000

Total TDS = Rs. 6,000

TDS is applicable in almost all income categories, such as:

Salaries
Interest on fixed deposits
Rental income Business commissions
Consultation charges
Lottery and rewards
Transfer of immovable properties

Importance of TDS in Investment Planning

Tax Deducted at Source (TDS) serves as a fundamental component in investment planning because it affects money flow together with taxation obligations and produces financial returns. Investors gain clarity in financial decision-making by comprehending TDS regulations to achieve tax efficiency without regulatory noncompliance.

Systematic tax collection through TDS prevents visitors from paying all their taxes together during the financial year's conclusion. Under the provisions of fixed deposits, TDS becomes applicable to interest income that exceeds Rs. 40,000 (Rs. 50,000 for senior citizens). When there is no proper financial planning, TDS reductions impact cash flow stability and objectives requiring immediate funding.

Investors should select tax-efficient investments between PPF and tax-free bonds because these products eliminate the need for TDS deductions. The process of submitting Form 15G/15H prevents extra tax deductions from applying to people with small taxable income.

Form 26AS enables taxpayers to plan their taxes properly and claim refund deductions when tax has been deducted in excess. Integrating TDS considerations into investment approaches enables people to reach higher post-tax returns, enhances cash flow management, and maintains regulatory compliance.

TDS Rates for the FY 2024-2025 (AY 2025-2026)

Here, let's take a look at TDS rates for different types of payment.

R = Resident and NR = Non-Resident

Salary and employment benefits

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
192	R, NR	Salary payment	Basic exemption limit of employee	Normal slab rates
192A	R, NR	Premature withdrawal from EPF	50,000	10%

Interest & Dividend

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
193	R	Interest on securities	Rs. 5,000 (Debentures), Rs. 10,000 (Savings Bonds)	10%
194	R	Premature withdrawal from EPF	5,000	10%
194A	R	Interest from deposits (Banks/Post Office/Co-op Society)	Rs. 50,000 (Senior Citizens), Rs. 40,000 (Others)	10%
194A	R	Interest from other sources (e.g., friends, relatives)	Rs. 5,000	10%

Lottery, gaming, and betting

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
194B	R, NR, FC	Lottery, card games, puzzles, etc.	Rs. 10,000 (aggregate),	30%
194BA	R, NR, FC	Online income from games	No limit	30%
19BB	R, NR, FC	Winning money from horse race	Rs. 10,000 (annual)	30%

Contractor, brokerage, commissions

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
194C	R	Payment to contractors or subcontractors	Rs. 30,000 (single), Rs. 100,000 (aggregate),	1% (Individuals/HUF), 2% (Others)
194D	R	Insurance commissions	Rs. 15,000	10% (companies), 5% (Others)
194H	R	Commission/ Brokerage	Rs. 15,000	5% (before Oct 1, 2024), 2% (after Oct 1, 2024)

Rent, & property transactions

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
194-I(a)	R	Rent on plant & machinery	Rs. 2,40,000	2%
194-I(b)	R	Rent on land/building/furniture	Rs. 2,40,000	10%
194-IA	R	Purchase of immovable properties (except agriculture land)	Rs. 50,00,000	1%
194-IB	R	Rent paid by individuals/HUF (not covered under 194-I)	Rs. 50,000 per month	5% (before Oct 1, 2024), 2% (after Oct 1, 2024)

Professional and technical services

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
194J	R	Professional fees, directors’ fees, royalties	Rs. 30,000	10%
194J	R	Fees for technical services/ call centers	Rs. 30,000	2%

Special payments

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
194Q	R	Purchase of goods	Rs. 50,00,000	0.10%
194Q	R	E-commerce transactions	Rs. 5,00,000	1% (before Oct 1, 2024), 0.1% (after Oct 1, 2024)
194Q	R	Business prerequisites/ benefits	Rs. 20,000	10%

Cash withdrawals

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
194N	R, NR	Cash withdrawals exceeding limit	Rs. 1 crore (Others), Rs. 3 crore (Co-op Societies)	2%
194N	R, NR	If no ITR filed for last 3 years	Rs. 20 lakh - Rs. 1 crore	2%
194N	R, NR	If withdrawal exceeds	Rs. 1 crore No limit	5%

Payment to non-residents & foreign entities

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
195	NR, FC	Income from investments in India	No limit	20%
195	NR, FC	LTCG (115E, 112, 112A)	No limit	10-20%
195	NR, FC	STCG (111A)	No limit	15%
195	NR, FC	Royalty / Technical fees	No limit	20-50%
195	NR, FC	Any other income	No limit	30-40%

Special cases

Section	Deductee	Nature of transactions	Threshold Limit	TDS rate
206AB	R	Higher TDS for non-filers of ITR	No limit	2x standard rate
206AA	R, NR, FC	TDS without PAN	No limit	Higher of standard rate or 20%

Note:

”R” denotes Resident,

“FC” denotes Foreign company, and

“NR” denotes Non-Resident.

Recent Changes in TDS and Implications

The government introduced budgetary changes in the Union Budget 2025 to streamline Tax Deducted at Source (TDS) rules together with Tax Collected at Source (TCS) regulations. Tax authorities want to create streamlined processes that specifically benefit middle-class taxpayers who file their taxes. The government recently increased multiple TDS section thresholds because this action helps taxpayers lower their tax expenses while improving procedural efficiency.

Section	Nature of payment	Current threshold (Rs.)	Proposed threshold (Rs.)
193	Interest on securities	NIL	10,000
194A	Interest other than securities	(i) 50,000 (Senior Citizens) (ii) 40,000 (Others) (iii) 5,000 (Other cases)	(i) 1,00,000 (Senior Citizens) (ii) 50,000 (Others) (iii) 10,000 (Other cases)
194	Dividend for individual shareholders	5,000	10,000
194K	Income from mutual fund units	5,000	10,000
194B & 194BB	Winning money from lottery, crossword puzzles, & horse races	Total exceeding 10,000 in a financial year	10,000 per single transaction
194D	Insurance commission	15,000	20,000
194G	Commission/prize on lottery tickets	15,000	20,000
194H	Commission or brokerage	15,000	20,000
194-I	Rent	240,000 per year	600,000 per year
194-J	Professional/technicalal service charges	30,000	50,000
194LA	Compensation for land acquisition	250,000	500,000
206C(1G)	Remittance under LRS & overseas tour packages	700,000	1,000,000

Note:

TCS will no longer apply to remittances made for education if funded through loans from approved financial institutions (Section 80E).
TCS on the purchase of goods will be removed starting April 1, 2025.
Higher TDS rates will apply only if the taxpayer does not provide their PAN.

TDS Rates Applicable on NRI (other than a Company)

The following TDS rates apply to NRIs for various types of income.

Section	Nature of Payment	TDS Rates (%)
192	Payment of salary	Normal slab
192A	Premature withdrawal from EPF	10%
194B	Winnings from lottery, card games, crossword puzzles, and other games	30%
194BB	Winnings from horse races	30%
194E	Payments to non-resident sportsmen, entertainers, or sports associations	20%
194EE	Payment from National Savings Schemes (NSS)	10%
194F	Payment due to repurchase of UTI or mutual fund units	20%
194G	Commission on the sale of lottery tickets	5%
194LB	Compensation for acquisition of certain immovable properties	5%
194LBA (2)	Interest income received by a business trust from an SPV and distributed to its unitholders	5%
194LBA (2)	Dividend income received from an SPV by a business trust and distributed to unitholders	10%
194LBA (3)	Rental income from real estate assets owned by a business trust and distributed to unitholders	30%
194LBB	Certain income paid by an investment fund to a unitholder	30%
194LBC	Income from investment in a securitisation fund	30%
194LC	Interest on a loan borrowed in foreign currency by an Indian company or business trust	5%
194LC	Interest on long-term bonds listed in an IFSC exchange	4%
194LD	Interest on rupee-denominated bonds paid to Foreign Institutional Investors (FIIs) or Qualified Foreign Investors (QFIs)	5%
195	(i) Income from investments made by NRIs (ii) Any other LTCG (iii) Interest on money borrowed by the government or Indian companies in foreign currency	20%
195	(i) Long-Term Capital Gains (LTCG) under Section 115E (ii) LTCG under Section 112(1)(c)(iii) (iii) LTCG under Section 112A (iv) Royalty income from copyrights or computer software (v) Royalty income from agreements related to industrial policy (vi) Income from technical fees under agreements related to industrial policy	10%
195	Any other income	30%
196B	Income (including LTCG) from units of an offshore fund	10%
196C	Income (including LTCG) from foreign currency bonds or Global Depository Receipts (GDRs) of an Indian company	10%
196D	Income (excluding dividends and capital gains) from Foreign Institutional Investors (FIIs)	20%

TDS Rate Charts for Domestic Companies

The following TDS rates apply to domestic companies for various types of income and transactions.

Section	Nature of Payment	TDS Rates (%)
192	Payment of salary	Normal slab
192A	Premature withdrawal from EPF	10%
193	(i) Central or State Government securities (ii) Debentures or securities issued by local authorities or corporations (iii) Listed debentures issued by companies (iv) Interest on any other security
194	Dividend Payments	10%
194A	Interest income (other than interest on securities)	10%
194B	Prize money from lottery, card games, crossword puzzles, and other games	30%
194BB	Prize money from horse races	30%
194C	(i) individuals/HUF (ii) Others	1% 2%
194D	Insurance commissions	10%
194DA	Payouts on life insurance policies (on income portion)	5%
194EE	Payments from the National Savings Scheme (NSS)	10%
194F	Payments due to repurchase of UTI or Mutual Fund units	20%
194G	Commission on the sale of lottery tickets	5%
194H	Commission or brokerage	5%
194-I	Rent on Plant & Machinery	2%
194-I	Rent on Land, Building, Furniture, or Fittings (limit increased to Rs. 2.4 lakh per year)	10%
194-IA	Payment for the transfer of certain immovable property (except agricultural land)	1%
194-IC	Payment under Joint Development Agreements (JDA) to Individuals/HUF	10%
194J	(i) Professional services (ii) Director’s remuneration, fees, or commission (iii) Non-compete fees (iv) Royalty for patents, copyrights, etc.	10%
194J	(i) Fee for technical services (ii) Royalty for cinematographic films (iii) Fee for technical services (call center business)	2%
194K	Income from mutual funds	10%
194LA	Compensation for the acquisition of certain immovable property	10%
194LBA(1)	Income distributed by a business trust to its unitholders	10%
194LBB	Certain income paid by an investment fund to its unitholders	10%
194LBC	Income from investments in a securitisation fund	10%
194M	Payments by Individuals/HUF exceeding Rs. 50 lakh	5%
194N	Cash withdrawals exceeding Rs. 20 lakh but up to Rs. 1 crore (for persons not filing ITR for the last 3 years)	2%
194N	Cash withdrawals exceeding amount exceeding Rs. 1 crore	5%
194O	Sale of goods or services through an e-commerce operator	1%
194Q	Payments to residents for the purchase of goods (above Rs. 50 lakh)	0.1%

TDS Rate Charts for Company is Not a Domestic Company

The following TDS rates apply to domestic companies for different types of income and transactions.

Section	Nature of Payment	TDS Rates (%)
194B	Winnings from lotteries, card games, crossword puzzles, and other games	30%
194BB	Winnings from horse races	30%
194E	Payments to non-resident sportsmen (including athletes), entertainers (not Indian citizens), or non-resident sports associations	20%
194G	Commission on the sale of lottery tickets	5%
194LB	Compensation on the acquisition of certain immovable property	5%
194LD	Interest on rupee-denominated bonds to Foreign Institutional Investors (FIIs) or Qualified Foreign Investors (QFIs)	5%
194LBA(2)	Interest income received by a business trust from an SPV and distributed to unitholders	5%
194LBA(2)	Dividend income received from an SPV by a business trust (where it holds full share capital except required government holdings) and distributed to unitholders	10%
194LBA(3)	Rental income from real estate assets owned by a business trust and paid to unitholders	40%
194LBB	Income paid by an investment fund to its unitholders	40%
194LBC	Income from investments in a securitisation fund	40%
194LC	Interest on loans borrowed in foreign currency by an Indian company or business trust (i) Against a loan agreement or long-term bonds (ii) If the bonds are listed on a recognized stock exchange in IFSC	5% 4%
195	Payments of various types of income to non-residents (i) Long-Term Capital Gains (LTCG) under Section 112(1)(c)(iii) (ii) LTCG under Section 112A (iii) Short-Term Capital Gains (STCG) under Section 111A (iv) Any other LTCG (v) Interest on foreign loans borrowed by the government or Indian entities (vi) Royalty income for software/copyrights under Section 115A (vii) Royalty income from agreements related to industrial policy (signed between 1961–1976) (viii) Technical service fees under agreements related to industrial policy (signed between 1964-1976) (ix) Any other income	10% 10% 15% 20% 20% 10% 50% 50% 40%
196B	Income (including LTCG) from units of an offshore fund	10%
196C	Income (including LTCG) from foreign currency bonds or Global Depository Receipts (GDRs) of an Indian company	10%
196D	Income (excluding dividends and capital gains) from Foreign Institutional Investors (FIIs)	20%

Strategies to Optimise TDS in your Investment Portfolio

The following discussion demonstrates tested methods for cutting down TDS reduction from investments while boosting your returns.

Submit Form 15G/15H to Avoid TDS on Fixed Deposits

Suppose you're under 60 and your total income is Rs. 2.8 lakh, including Rs. 40,000 interest from an FD. You are not liable to pay tax. However, since your interest hits the Rs. 40,000 limit, TDS of Rs. 4,000 (10%) may be deducted.

To avoid this, you can submit Form 15G to the bank, declaring that your total income is below the taxable limit. The bank won’t deduct TDS.

Invest in Tax-Free Instruments to Avoid TDS

Some investments don’t just grow your wealth—they do it without tax deductions:

PPF: Returns and withdrawals are fully tax-free.
Tax-Free Bonds: Earn interest without worrying about TDS or tax.
ULIPs: Gains are tax-free if your annual premium is below Rs. 2.5 lakh and you stay invested for at least 5 years.

Example: If you invest Rs. 5 lakh in tax-free bonds with 7% annual returns, you earn Rs. 35,000, with zero TDS and no tax liability.

Split Your FDs to Avoid TDS

Banks deduct TDS if your annual FD interest exceeds Rs. 40,000 (Rs. 50,000 for seniors). To avoid this:

Spread your FDs across different banks to keep interest under the limit.
Consider gifting money to a parent or adult child (in a lower tax bracket) who can invest separately.

Example: Rs. 6 lakh FD in one bank earns Rs. 42,000 interest = TDS deducted. But two Rs. 3 lakh FDs in separate banks earning Rs. 21,000 each = no TDS!

Choose Growth Option Over Dividend in Mutual Funds

Dividends attract 10% TDS before being credited to your account. On the other hand, the growth option allows your money to grow without periodic tax deductions.

Example: If a mutual fund gives Rs. 10,000 dividends, you get Rs. 9,000 after 10% TDS. But in a growth plan, the full Rs. 10,000 remains invested, which will compound your returns.

Investors who succeed with their assets minimize unnecessary tax deductions through TDS while selecting options that provide maximum tax efficiency. Knowledge about the workings of TDS gives you the ability to create better financial plans with the power to reduce taxes while optimizing your earnings.

Written by Anurag Kumar

Anurag Kumar is a dynamic strategic partnerships leader in the InsurTech domain, specializing in driving corporate business growth and institutional relations. As a pivotal force at InsurRead More

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.