TDS Rates in India – TDS Rate Chart for FY 2024-25 (AY 2025-26)

Introduction

When you make payments like salary, interest, rent, or professional fees, you may need to deduct tax at source (TDS) before making the payment. The TDS rate depends on who receives the payment (resident, non-resident, company) and which section of the law applies. For Financial Year (FY) 2024-25, corresponding to Assessment Year (AY) 2025-26, knowing the correct TDS rate helps avoid mistakes and penalties. In this guide, we’ll explain what TDS is, then share different rate charts for residents, non-residents, domestic companies, and others. We’ll also cover how forms like Form 15G/15H help you avoid unnecessary tax deductions.

What is the TDS Rate in India?

TDS stands for Tax Deducted at Source. It is a method by which tax is collected when certain payments are made. The payer deducts the tax before paying the recipient and deposits it with the government. The recipient then claims credit when filing their return. The rate of TDS is given under the Income-tax Act or the first schedule of the Finance Act. The rate varies depending on:

• Whether the recipient is a resident or non-resident.
• The nature of payment (salary, interest, rent, etc.).
• The recipient type (individual, HUF, domestic company, foreign company).
• Whether the PAN is given by the recipient. If PAN is missing, the rate may be higher (often 20%).

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TDS Rates for FY 2024-25 (AY 2025-26) for Individuals and HUFs

Section

Nature of Payment/Income

Threshold Limit (in ₹)

TDS Rate (%)

194A

Interest on Bank/Fixed Deposits

₹40,000 (₹50,000 for Senior Citizens)

10%

194C

Payments to Contractors/Sub-contractors

₹30,000 (Single) or ₹1,00,000 (Aggregate in FY)

1%

194H

Commission or Brokerage

₹15,000

5%

194-I (a)

Rent for Plant and Machinery

₹2,40,000

2%

194-I (b)

Rent for Land, Building, or Furniture

₹2,40,000

10%

194J

Fees for Technical Services

₹30,000

2%

194J

Fees for Professional Services/Royalty

₹30,000

10%

194B/BA/BB

Winnings from Lottery, Games, Horse Races

₹10,000 (each instance for 194B/BB)

30%

194IA

Sale of Immovable Property (Excluding Agri. Land)

₹50 Lakhs

1%

194Q

Purchase of Goods (If buyer's turnover is text> ₹10 Cr.)

Over ₹50 Lakhs

0.1%

194R

Benefit or Perquisite in Business/Profession

₹20,000

10%

Important Note: If the receiver does not provide their PAN, the TDS rate for most transactions will be much higher, usually 20%.

Non-resident Individuals

When a person residing in India makes a payment to someone who is a Non-resident (NRI), the rules are different. The tax is deducted under Section 195 and others.

Nature of Payment/Income

Applicable TDS Rate (%)

Special Note

Interest Income (e.g., Bank/Loan Interest)

20%

This is the standard rate under the Income Tax Act.

Long-Term Capital Gains (from unlisted shares)

10%

Applies to specific long-term gains.

Short-Term Capital Gains (from listed shares - Section 111A)

15%

Applies to capital gains from listed shares and securities.

Royalty and Fees for Technical Services (FTS)

10%

If the payment is under a special section (like 115A).

Winnings from Lottery or Games

30%

Same high rate as for residents.

Any Other Income

30%

Applies to income not covered by specific sections.

Key Rule (DTAA): The final TDS rate for an NRI will be the lower of the rate specified in the Income Tax Act or the rate specified in the Double Taxation Avoidance Agreement (DTAA) between India and the NRI's country of residence.

Domestic Companies

Section

Nature of Payment/Income

Threshold Limit (in ₹)

TDS Rate (%)

194C

Payments to Contractors/Sub-contractors

₹30,000 (Single) or ₹1,00,000 (Aggregate in FY)

2%

194H

Commission or Brokerage

₹15,000

5%

194-I (a)

Rent for Plant and Machinery

₹2,40,000

2%

194-I (b)

Rent for Land, Building, or Furniture

₹2,40,000

10%

194J

Fees for Technical Services

₹30,000

2%

194J

Fees for Professional Services/Royalty

₹30,000

10%

194DA

Taxable Life Insurance Policy Payout

₹1,00,000

5%

Companies Other than Domestic Organisations

Nature of Payment/Income

Applicable TDS Rate (%)

Interest Income

20%

Royalty and Fees for Technical Services (FTS)

10%

Long-Term Capital Gains (LTCG)

10%

Short-Term Capital Gains (STCG) from listed shares/securities

15%

Income from Units of Business Trust (Rental Income)

40%

Any Other Income

40%

Note: Just like Non-resident individuals, foreign companies can also benefit from the DTAA (Double Taxation Avoidance Agreement) rates, if those rates are lower than the rates mentioned above.

Provisions regarding Form 15G / 15H

• Form 15G: This form is for resident individuals below 60 years of age and certain entities (like HUFs). You can fill out and submit this form to the person paying you (like your bank) to tell them not to deduct TDS on your interest income.
• Form 15H: This form is only for Senior Citizens (resident individuals who are 60 years or older). It serves the same purpose—to request non-deduction of TDS on income like bank interest.

Key Conditions to Submit the Forms:

1. You must be a Resident of India. Non-Resident Indians (NRIs) cannot use these forms.
2. Your final tax liability (the actual tax you have to pay after all calculations) for the financial year must be NIL (zero).
3. For Form 15G, the total interest income in the year must be less than the basic exemption limit (currently ₹2,50,000).

You must submit the relevant form to your bank or financial institution at the start of every financial year (April 1st) to stop TDS from being deducted.

Conclusion

TDS rates help ensure tax collection at source and smooth credit to the payee. For FY 2024-25 (AY 2025-26), we’ve seen distinct rates for residents, non-residents, companies, and differences based on the nature of payment. Always check if your payment falls under a TDS section, obtain PAN, apply the correct rate, and consider Form 15G/15H if eligible. This helps you stay compliant and avoid penalties.