he TDS rate on income depends on the salary of an individual and based on that it ranges between 10% to 30%. The TDS rates to be applicable on income for the current year is updated in the TDS rates for FY 2024-25.
TDS stands for Tax Deducted at Source. It is an indirect way of collecting income tax at source by the government of India.
The person on whom the responsibility of deducting tax is imposed has to deduct tax at source at appropriate rates and the deducted sum is deposited to the credit of government of India.
TDS Rates in India
TDS Rate Charts for the FY 2023-24 and FY 2024-25
Section | Deductee* | Nature of transaction | Threshold Limit (Rs) | TDS Rate |
192 | R, NR | Payment of salary | Basic exemption limit of employee | Normal Slab Rates |
192A | R, NR | Premature withdrawal from EPF | 50,000 | 10% |
193 | R | Interest on securities | Debentures- 5,000 | 10% |
194 | R | Payment of any dividend | 5,000 | 10% |
194A | R | Interest from other than interest from securities (from deposits with banks/post office/co-operative society) | Senior Citizens- 50,000 | 10% |
194A | R | Interest from other than interest on securities u/s 193 and interest from banks/post office/co-operative society. | 5,000 | 10% |
194B | R, NR, FC | Income from lottery winnings, card games, crossword puzzles, and other games of any type | Aggregate income from lottery winnings, card games, crossword puzzles etc- 10,000 | 30% |
194BA | R, NR, FC | Income from online games | Nil | 30% |
194BB | R, NR, FC | Income from horse race winnings | 10,000 | 30% |
194C | R | Payment to contractor/sub-contractor:- | Single transaction- 30,000 |
|
|
| a) Individuals/HUF |
| 1% |
|
| b) Other than Individuals/HUF |
| 2% |
194D | R | Insurance commission to: |
|
|
|
| a) Domestic Companies | 15,000 | 10% |
|
| b) Other than companies | 15,000 | 5% |
194DA | R | Income from the insurance pay-out, while payment of any sum in respect of a life insurance policy. | 1,00,000 | 5% |
194E | NR, FC | Payment to non-resident sportsmen/sports association | No limit |
|
194EE | R, NR | Payment of amount standing to the credit of a person under National Savings Scheme (NSS) | 2,500 | 10% |
194F | R, NR | Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund | No limit | 20% |
194G | R, NR, FC | Payments, commission, etc., on the sale of lottery tickets | 15,000 | 5% |
194H | R | Commission or brokerage | 15,000 | 5% |
194-I | R | Rent: |
|
|
|
| 194-I(a) Rent on | 2,40,000 | 2% |
|
| 194-I(b) Rent on | 2,40,000 | 10% |
194-IA | R | Payment in consideration of transfer of certain immovable property other than agricultural land. | 50,00,000 | 1% |
194-IB | R | Rent payment by an individual or HUF not covered u/s. 194-I | 50,000 per month | 5% |
194-IC | R | Payment under Joint Development Agreements (JDA) to Individual/HUF | No limit | 10 |
194J | R | Any sum paid by way of fee for professional services | 30,000 | 10% |
194J | R | Any sum paid by way of remuneration/fee/commission to a director | 30,000 | 10% |
194J | R | Any sum paid for not carrying out any activity concerning any business; | 30,000 | 10% |
194J | R | Any sum paid for not sharing any know-how, patent, copyright, etc. | 30,000 | 10% |
194J | R | Any sum paid as a fee for technical services | 30,000 | 2% |
194J | R | Any sum paid by way of royalty towards the sale or distribution, or exhibition of cinematographic films | 30,000 | 2% |
194J | R | Any sum paid as fees for technical services, but the payee is engaged in the business of operation of the call center. Prior to June 1, 2017, the rate was 10% | 30,000 | 2% |
194K | R | Payment of any income for units of a mutual fund, for example, dividend | No limit | 10% |
194LA | R | Payment in respect of compensation on acquiring certain immovable property | 2,50,000 | 10% |
194LB | NR, FC | Payment of interest on infrastructure debt fund to Non-Resident | No limit |
|
194LC | NR, FC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against loan agreement or the issue of long-term bonds | No limit | 5% |
194LC | NR, FC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against the issue of long-term bonds listed in IFSC | No limit | 4% |
194LD | NR, FC | Payment of interest on bond (rupee-denominated) to FII or a QFI | No limit | 5% |
194LBA(1) | R | Certain income distributed by a business trust to its unitholder | No limit | 10% |
194LBA(2) | NR, FC | Interest income of a business trust from SPV distribution to its unitholders | No limit | 5% |
194LBA(2) | NR, FC | Dividend income of a business trust from SPV, in which it holds the entire share capital exempt the capital held by the government, and distribution to its unitholders | No limit | 10% |
194LBA(3) | NR | Rental income payment of assets owned by the business trust to the unitholders of such business trust | No limit | 30% |
194LBA(3) | FC | Rental income payment of assets owned by the business trust to the unitholders of such business trust | No limit | 40% |
194LBB | R | Certain income paid to a unitholder in respect of units of an investment fund | No limit | 10% |
194LBB | NR | Certain income paid to a unitholder in respect of units of an investment fund | No limit | 30% |
194LBB | FC | Certain income paid to a unitholder in respect of units of an investment fund | No limit | 40% |
194LBC | R | Income from investment in securitisation fund received to an individual and HUF | No limit | 25% |
194LBC | NR | Income from investment in securitisation fund received to a domestic company | No limit | 30% |
194LBC | FC | Income from investment in securitisation fund received to a foreign company | No limit | 40% |
194M | R | Certain payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J | 50,00,000 | 5% |
194N | R, NR | Cash withdrawal exceeding a certain amount | Co-operative society: 3 Crore | 2% |
194N | R, NR | Cash withdrawal in case person not filing ITR for last three years and the original ITR filing due date expired | – 20 lakh to 1 crore |
5% |
194O | R | Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform. | 5,00,000 | 1% |
194P | R | Payment of pension or interest to specified senior citizens of age 75 years or more | Basic exemption limit of senior citizens or super senior citizens | Normal tax slab rates |
194Q | R | Payments for the purchase of goods | 50,00,000 | 0.10% |
194R | R | Perquisite or benefit to a business or profession | 20,000 | 10% |
194S | R | TDS on the transfer of virtual digital assets Specified persons: Individual or a HUF not having income from business or profession OR Individual or a HUF having sales from business or profession less than | Specified Persons- 50,000 | 1% |
195 | NR | Income on investments made by NRI citizen | No limit | 20% |
195 | NR | Income by way of LTCG referred to in section 115E in the case of NRI | No limit | 10% |
195 | NR, FC | Income by way of LTCG under section 112(1)(c)(iii) | No limit | 10% |
195 | NR, FC | Income by way of LTCG under section 112A | No limit | 10% |
195 | NR, FC | Income by way of STCG under section 111A | No limit | 15% |
195 | NR, FC | Any other income by way of LTCG | No limit | 20% |
195 | NR, FC | Interest payable on money borrowed by the government or Indian concern in foreign currency | No limit | 20% |
195 | NR, FC | Income from royalty payable by the Indian concern or the government, for the copyright in a subject referred in the first proviso of section 115A or computer software referred to in the second proviso of section 115A | No limit | 20% |
195 | NR | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy | No limit | 20% |
195 | FC | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy | No limit | 50% |
195 | FC | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy | No limit | 20% |
195 | NR | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy | No limit | 20% |
195 | FC | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy | No limit | 50% |
195 | FC | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy | No limit | 20% |
195 | NR | Any other income | No limit | 30% |
195 | FC | Any other income | No limit | 40% |
196B | NR, FC | Income (including LTCG) from units of an offshore fund | No limit | 10% |
196C | NR, FC | Income (including LTCG) from foreign currency bonds or GDR of an Indian company | No limit | 10% |
196D | NR, FC | Income (excluding dividend and capital gain) from Foreign Institutional Investors. | No limit | 20% |
206AB | R | Payment to non-filers, i.e. those who have not filed their income tax return in the last year | No limit | – 2 times the rate given in the Income Tax Act or Finance Act or |
206AA | R, NR, FC | TDS rate in case of Non availability of PAN | No limit | Rates specified above or 20%, whichever is higher |
*”R” denotes Resident,
“FC” denotes Foreign company, and
“NR” denotes Non-Resident.
Note:
- The Normal slab rates from FY 2023-24 for individuals and HUF have changed under the new tax regime.
- Applicable surcharge and health and education cess shall be deducted in addition to the TDS rates deducted for NRI and FC deductees.
- In the above TDS rate chart, the ‘Resident’ payee under the column ‘TDS deducted’ includes domestic companies.
- All TDS amendments introduced in Budget 2023 have been included in the TDS chart above.
Important amendments introduced vide the Finance Act, 2023
Section 193 – Interest on Securities –
With effect from 1st April 2023, provisions of section 193 of the Income Tax Act will be applicable to payments relating to interest on listed debentures to any resident. Notably, earlier the said payment was exempted from TDS.
Section 194B – Winning from lottery/ crossword puzzle –
- Threshold limit of INR 10,000 will be applicable aggregate amount from winning from lottery/ crossword puzzle/ card game or any other game/ gambling/ betting.
- With effect from 1st April 2023, provisions of section 194B of the Income Tax Act will not apply to winning from any online game.
Section 194BA – Winning from online games (newly inserted provisions effective from 1st April 2023) –
Any person responsible for paying, income by way of winning from any online games, to any person is required to deduct TDS u/s 194BA.
TDS is deductible on net winning in the user account at the end of the Financial Year. However, in case of withdrawal during the Financial Year from the user account, TDS will be deductible at the time of withdrawal.
Section 194 N – Payments of certain amounts in cash (i.e. cash withdrawals) –
The threshold limit, in case if the recipient is co-operative society, will be INR 3 Crores instead of INR 1 Crore.
FAQs
What to do if there is any mistake in deduction of Tax at Source (TDS)?
Sometimes a person may deduct TDS at a rate that is less than the rate specified in the Act due to ignorance or another reason. Therefore, it is crucial to confirm the rate at which TDS is deducted for each transaction before submitting the TDS return.
What is the rate of TDS on salary?
The amount of TDS to be deducted is calculated by dividing the employee’s projected tax due for the fiscal year by the number of months they worked for the specific employer.