TDS (Tax Deduction at Source) is tax the payer deducts before paying you — on salary, interest, rent, professional fees, commission and more — and deposits with the government against your PAN. Common non-salary rates are 10% (interest, rent on land/building, professional fees), 2% (contractors, technical fees, commission, plant & machinery rent) and 1% (property purchase, e-commerce). Salary is deducted at your slab rate. If you don't give your PAN, TDS is 20% under Section 206AA. Excess TDS is refunded when you file your ITR.
From AY 2026-27 the Income-tax Act, 2025 consolidates the old TDS sections (192–206C of the 1961 Act) — the everyday names like "Section 194I" and "Section 194J", the rates and the thresholds are unchanged. Quarterly returns are also being renumbered (Form 24Q → 138, Form 26Q → 140). We use the familiar section names below.
TDS Rate Chart FY 2025-26 (AY 2026-27)
Section-wise TDS rates and thresholds for resident payees, updated for the Budget 2025 threshold hikes effective 1 April 2025. Rates apply where the payee has furnished a valid PAN.
| Nature of payment | Section | Rate | Threshold (FY 25-26) |
|---|---|---|---|
| Salary | 192 | Slab rate | Basic exemption limit |
| Interest — banks / post office | 194A | 10% | Rs 50,000 (Rs 1,00,000 for seniors) |
| Interest — others | 194A | 10% | Rs 5,000 |
| Rent — land / building | 194I | 10% | Rs 6,00,000 p.a. |
| Rent — plant / machinery | 194I | 2% | Rs 6,00,000 p.a. |
| Professional fees | 194J | 10% | Rs 50,000 p.a. |
| Technical fees / call-centre | 194J | 2% | Rs 50,000 p.a. |
| Contractor — individual / HUF | 194C | 1% | Rs 30,000 single / Rs 1,00,000 p.a. |
| Contractor — others | 194C | 2% | Rs 30,000 single / Rs 1,00,000 p.a. |
| Commission / brokerage | 194H | 2% | Rs 20,000 p.a. |
| Dividend | 194 | 10% | Rs 10,000 p.a. |
| Purchase of immovable property | 194IA | 1% | Rs 50,00,000 |
| E-commerce sales (operator TDS) | 194-O | 0.1% | Rs 5,00,000 (individual/HUF) |
Resident-payee rates with PAN on record. Non-residents follow different rates/DTAA. Verify the exact threshold for your case — Budget 2025 raised several limits (194I, 194A, 194J) from 1 Apr 2025.
How TDS Works — Deduct, Deposit, Report
If the deductee does not furnish a valid PAN, TDS is deducted at 20% (or the applicable rate, whichever is higher) under Section 206AA. An inoperative PAN — one not linked to Aadhaar — is treated the same way, so keep your PAN–Aadhaar link active to avoid higher deduction.
Deductor struggling with monthly deposits and quarterly returns?
Get TDS Return Filing Help →What Changed — Threshold Hikes from 1 Apr 2025
The Finance Act, 2025 raised several TDS thresholds so smaller payments escape deduction. The rates were largely unchanged; only the limits at which TDS starts moved up.
| Section | Payment | Old threshold | New threshold |
|---|---|---|---|
| 194I | Rent | Rs 2,40,000 p.a. | Rs 6,00,000 p.a. |
| 194A | Interest — senior citizens | Rs 50,000 | Rs 1,00,000 |
| 194A | Interest — others (bank) | Rs 40,000 | Rs 50,000 |
| 194J | Professional / technical fees | Rs 30,000 | Rs 50,000 |
| 194H | Commission / brokerage | Rs 15,000 | Rs 20,000 |
Commission under 194H was earlier reduced to 2% (from 5%). Confirm the limit applicable to your payment before deducting.
TDS Deposit & Return Filing Due Dates
| Quarter | Period | Deposit due | Return due |
|---|---|---|---|
| Q1 | Apr – Jun | 7th of next month | 31 July |
| Q2 | Jul – Sep | 7th of next month | 31 October |
| Q3 | Oct – Dec | 7th of next month | 31 January |
| Q4 | Jan – Mar | 30 April (for March) | 31 May |
Late deduction attracts 1% interest/month; late deposit 1.5%/month. Late return filing fee is Rs 200/day under Section 234E.
Want the full section-by-section chart with non-resident rates?
See the TDS Rate Chart →Claiming a TDS Refund
If total TDS deducted against your PAN is more than your actual tax liability, the excess is refunded — you claim it by filing your Income Tax Return. Cross-check every entry in Form 26AS and the AIS before filing so no credit is missed.
- Form 26AS matches your income & TDS
- AIS / TIS reviewed for mismatches
- Form 16 / 16A collected from deductors
- Correct bank account pre-validated for refund
- Return e-verified within 30 days
- Old vs new regime compared before filing
TDS is only an advance collection — it does not settle your liability. You must still file an ITR to reconcile it: pay any shortfall, or claim a refund of the excess. Refunds are usually credited within a few weeks of return processing, with interest under Section 244A where applicable.
Excess TDS deducted? File your ITR and get your refund.
Get ITR Filing Help →TDS — Frequently Asked Questions
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TDS Deducted, Deposited & Filed — Correctly
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