Tax Deducted at Source (TDS) is a mechanism introduced by the Indian Income Tax Department to collect taxes at the source of income generation. The deductor (payer) is responsible for deducting a specified percentage of tax before making payments like salary, rent, interest, professional fees, and commissions. This deducted amount is then deposited with the government on behalf of the payee.
TDS Rate Chart for FY 2024-25
1. TDS Rates for Resident Individuals & Entities
| Section | Nature of Payment | Threshold Limit (INR) | TDS Rate (%) |
|---|---|---|---|
| 192 | Salary | As per slab | As per slab |
| 192A | Premature withdrawal from EPF | 50,000 | 10% |
| 193 | Interest on securities | 2,500 | 10% |
| 194 | Dividend | 5,000 | 10% |
| 194A | Interest (Banks, NBFCs, Post Office) | 40,000 (50,000 for senior citizens) | 10% |
| 194B | Lottery & Game Winnings | 10,000 | 30% |
| 194BA | Online game winnings | – | 30% |
| 194BB | Horse race winnings | 10,000 | 30% |
| 194C | Contractor Payments | 30,000 (single) / 1,00,000 (annual) | 1% (Ind/HUF), 2% (Others) |
| 194D | Insurance commission | 15,000 | 5% (Ind), 10% (Company) |
| 194H | Commission or brokerage | 15,000 | 2% (w.e.f. Oct 1, 2024) |
| 194I | Rent (Plant & Machinery) | 2,40,000 | 2% |
| 194I | Rent (Land/Building/Furniture) | 2,40,000 | 10% |
| 194IA | Immovable property transfer | 50,00,000 | 1% |
| 194IB | Rent by Individual/HUF | 50,000 per month | 2% (w.e.f. Oct 1, 2024) |
| 194J | Professional/Technical Fees | 30,000 | 2% (Technical services), 10% (Others) |
| 194M | Contractor/Professional Payments by Individual/HUF | 50,00,000 | 2% (w.e.f. Oct 1, 2024) |
| 194N | Cash withdrawals | 1 crore | 2% |
| 194O | E-commerce participant payments | 5,00,000 | 0.1% (w.e.f. Oct 1, 2024) |
2. TDS Rates for Non-Residents (NRI)
| Section | Nature of Payment | Threshold Limit (INR) | TDS Rate (%) |
| 195 | Interest/Royalty/Fees for technical services | No limit | 10%-40% (as per DTAA) |
| 196A | Income from units of MF | No limit | 20% |
| 196D | Income of foreign institutional investors from securities | No limit | 20% |
Key Changes in TDS Rates as per Budget 2024
- Commission/Brokerage (Sec 194H): Reduced from 5% to 2% (effective from Oct 1, 2024).
- Rent by Individual/HUF (Sec 194IB): Reduced from 5% to 2% (effective from Oct 1, 2024).
- Payments by Individual/HUF (Sec 194M): Reduced from 5% to 2% (effective from Oct 1, 2024).
- E-commerce Participant Payments (Sec 194O): Reduced from 1% to 0.1% (effective from Oct 1, 2024).
- Repurchase of Mutual Fund Units (Sec 194F): TDS requirement removed.
Important Notes:
- If the PAN is not provided, TDS is deducted at 20% or the specified rate, whichever is higher (Sec 206AA).
- Surcharge & Cess: Non-resident TDS is subject to surcharge and 4% Health & Education Cess.
- TDS must be deposited with the government and returns filed on time to avoid penalties.
Conclusion
Understanding the latest TDS rate chart for FY 2024-25 is essential for businesses and individuals to comply with tax laws and avoid penalties. The revised rates introduced in Budget 2024 make tax deduction easier for various categories, including commission, rent, professional fees, and e-commerce transactions. Staying informed about TDS changes will help in better financial planning and tax compliance.
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