Quick Answer: The correct TDS rate depends on the section applicable (194A for interest, 194C for contractors, 194J for professionals, 194H for commission, etc.), whether the recipient has a valid PAN (20% TDS if no PAN or invalid PAN under Section 206AA), and whether the payment exceeds the annual threshold. Lower deduction certificate u/s 197 can reduce or waive TDS.
TDS Rate Chart — Complete Guide FY 2025-26
Tax Deducted at Source (TDS) is required on a wide range of payments. Every deductor must be aware of the correct section, rate, and threshold for each type of payment. Failure to deduct or deposit TDS correctly attracts interest (1.5%/month) and penalties.
Key TDS Rates at a Glance
| Payment Type | Section | Rate | Threshold |
|---|---|---|---|
| Salary | 192 | Slab rate | Basic exemption limit |
| Bank Interest | 194A | 10% | ₹40,000 / ₹50,000 (senior) |
| Professional Fees | 194J(b) | 10% | ₹30,000 |
| Technical Services | 194J(a) | 2% | ₹30,000 |
| Contractor | 194C | 1%/2% | ₹30,000 single / ₹1L annual |
| Rent (land/building) | 194I(b) | 10% | ₹2.4L annual |
| Property Purchase | 194IA | 1% | ₹50L |
| Commission/Brokerage | 194H | 5% | ₹15,000 |
| Crypto/VDA Transfer | 194S | 1% | ₹10,000 |
Frequently Asked Questions
Under Section 206AA, if the deductee does not provide a PAN, TDS must be deducted at the higher of: (a) applicable rate, (b) 20%, or (c) rate in force. This doubles or quadruples the effective TDS in many cases.
Section 206AB requires TDS at twice the applicable rate (or 5%, whichever is higher) for persons who have not filed ITR in the previous 2 years AND had TDS/TCS exceeding ₹50,000 in each of those years.