income tax
Published on 21 July 2025
TDS Rate Chart Explained: Changes and Updates for 2025
TDS Rate Chart FY 2025–26 (AY 2026–27): What’s New, What’s Easier, and What You Shouldn’t Miss
As another financial year kicks in, the TDS landscape has quietly evolved—yet again. The Budget 2025 announcements have brought several targeted tweaks to how tax gets deducted at source, and if you’re a salaried employee, a business owner, or even a freelancer, it’s worth knowing what’s changed.
Budget 2025: Major TDS Revisions You Need to Know (Effective April 1, 2025)
Here are the changes that are already live:
-
Higher Thresholds Across the Board: Many TDS exemptions now kick in at a higher payment level—meaning smaller payments no longer attract TDS.
-
TDS Rate Cuts in Select Sections: Payments for rent, commissions, freelance work, and e-commerce transactions now attract less tax at the source.
-
New Focus on Digital Economy: Rules have been updated for things like online gaming winnings and gig economy income—bringing clarity (and taxes) where there was ambiguity before.
Some Key Examples:
| Section | Payment Type | Old Threshold | New Threshold | Notable Change |
|---|---|---|---|---|
| 193 | Interest on securities | NIL | ₹10,000 | Now exempt up to ₹10K |
| 194A | Bank interest (seniors) | ₹50,000 | ₹1,00,000 | Limit doubled |
| 194K | MF unit income | ₹5,000 | ₹10,000 | More investors exempt |
| 194H | Commission/Brokerage | — | — | Rate slashed to 2% |
| 194-IB | Rent (Ind./HUF) | 5% | 2% | Lower deduction rate |
| 194O | E-comm sales | 1% | 0.1% | Big relief for sellers |
Comprehensive TDS Chart FY 2025–26: Residents
Below is a simple reference list of what gets taxed, at what rate, and when:
| Section | Payment Type | TDS Rate | Threshold |
|---|---|---|---|
| 192 | Salary | Slab-based (old/new) | As applicable |
| 192A | EPF premature withdrawal | 10% | ₹50,000 |
| 193 | Interest on securities | 10% | ₹10,000 |
| 194A | Bank interest | 10% | ₹50,000 (others), ₹1L (seniors) |
| 194B | Lottery/puzzle winnings | 30% | ₹10,000 per txn |
| 194BA | Online gaming winnings | 30% | NIL |
| 194BB | Horse race winnings | 30% | ₹10,000 per txn |
| 194C | Contracts (single/aggregate) | 1%/2% | ₹30K/₹1L |
| 194H | Commission/Brokerage | 2% | ₹20,000 |
| 194-IB | Rent (Ind./HUF) | 2% | ₹50,000/month |
| 194M | Payment by certain Ind./HUF | 2% | ₹50L |
| 194O | E-commerce sales | 0.1% | ₹5L |
And more for various professional, digital, and property-related payments. (We can provide a full downloadable chart if needed.)
For Non-Residents (Selected TDS Rates)
If you're dealing with non-resident payments, here's a quick snapshot:
| Section | Nature of Payment | TDS Rate |
|---|---|---|
| 195 | NRI payments (interest, LTCG, etc.) | 10–30% |
| 194E | Non-resident sports professionals | 20% |
| 194LB | Infra debt fund interest | 5% |
| 194LC | ECB interest (IFSC bonds) | 4–5% |
| 196A–D | FII, offshore bonds, funds | 10–20% |
Common Questions and Reminders
- No PAN? Be ready for a flat 20% TDS in most cases (Sec 206AA).
- Salary TDS? Depends on whether you’ve opted for the old or new regime.
- High Cash Withdrawals (Sec 194N)? Over ₹1 crore? Deductor takes 2–5% upfront.
- Digital/Online Gaming? Every rupee you win is now taxed at 30%—no exemption.
Why Should You Care?
Because small lapses in TDS compliance can snowball into notices, penalties, or denied refunds. And because these rule changes aren’t just technical—they can save you real money, especially if you're self-employed or receiving diverse income streams.
Budget 2025 was subtle but strategic. These TDS adjustments reflect a push towards simplifying compliance while capturing tax on digital and high-value transactions.