TDS and TCS were introduced to ensure tax collection at the source of income. Each year, the Finance Minister announces the applicable TDS and TCS rates for the upcoming financial year in the Budget. Here’s a look at the latest TDS and TCS rate chart.
TDS for Resident Individuals and Businesses
Under the TDS concept, a person (deductor) responsible for making a specified payment to another person (deductee) must deduct tax at source and deposit it with the Central Government. The deductee can claim credit for the deducted tax based on Form 26AS or the certificate issued by the deductor.
TDS payments are categorised into three sections:
- Salary Payments
- Non-Salary Payments.
- Applicable to Non-Residents
TDS on Salary Payments
As per Section 192 of the Income-tax Act, an employer must deduct TDS on salary payments. The employer must deposit the deducted TDS with the Income Tax Department by the 7th of the following month. In case of March it is to be deposited by April 30th. Additionally, the employer is required to file a TDS return in Form 24Q.
TDS on Non-Salary Payments
TDS on payments other than Salary depends upon the nature of Payment. Some common payments that feature the TDS system of taxation include commission, FD interest, rent, etc. TDS on different payments and their applicable rates are notified by the Income Tax Act, of 1961. For payments other than salary deductor has to file TDS Return Form 26Q.
Latest TDS Rate Chart
Given below are the TDS rates for Individuals and Businesses:
| Section | Nature of Payment | Threshold Limit (INR) | TDS Rate Chart | Threshold Limit as per Budget 2025 (INR) |
| 192 | Salary | Basic exemption limit of employee | Normal Slab Rates for FY 2024-25 (AY 2025-26) | Basic exemption limit for employee |
| 192A | Premature Withdrawal from EPF | 50,000 | 10% in case of availability of PAN 20% in case of unavailability of PAN | 50,000 |
| 193 | Interest on Securities | Nil | 10% | 10,000 |
| 194 | Payment of Dividend | 5,000 | 10% | 10,000 |
| 194A | Interest from deposits with banks/post office/co-operative society) | (a) Senior Citizen- 50,000 (b) Others- 40,000 | 10% | (a) Senior Citizen- 1,00,000 (b) Other- 50,000 |
| 194A | Interest other than “Interest on Securities” (Other than Interest from deposits with banks/post office/co-operative society) | 5,000 | 10% | 10,000 |
| 194B | Winning from lotteries, cross-word, puzzles, card games, etc. | Aggregate amounts exceeding INR 10,000 during the financial year. | 30% | 10,000 in respect of a single transaction |
| 194BA | Winnings from online games | No Limit | 30% | No limit |
| 194BB | Winning from Horse Race | Aggregate amounts exceeding INR 10,000 during the financial year. | 30% | 10,000 in respect of a single transaction |
| 194C | Payment to Contractor | If the transaction of a single contract exceeds 30,000 or the total amount exceeds 1,00,000 during the FY | (a)Individuals/HUFs- 1% (b)others- 2% | If the transaction of a single contract exceeds 30,000 or the total amount exceeds 1,00,000 during the FY |
| 194D | Insurance Commission | 15,000 | (a) Individuals- 5% (b) Companies- 10% | 20,000 |
| 194DA | Payment in respect of life insurance policy | 1,00,000 | 5% | 1,00,000 |
| 194E | Payment to Non-resident sportsmen or association | No limit | 20% + Cess | No Limit |
| 194EE | Payment in respect of deposit under the National Saving Scheme | 2500 | 10% | 2500 |
| 194F | Payments on account of re-purchase of units by Mutual fund or UTI | No limit | 20% | No Limit |
| 194G | Commission, prize, etc. on sale of tickets | 15,000 | 5% | 20,000 |
| 194H | Commission or Brokerage | 15,000 | 5% | 20,000 |
| 194-I(a) | Rent for Plant & Machinery | 2,40,000 (In a FY) | 2% | 6,00,000 (In a FY) |
| 194-I(b) | Rent for Immovable Property (Land/building or Furniture/fitting) | 2,40,000 (In a FY) | 10% | 6,00,000 (In a FY) |
| 194-IA | Payment for acquisition of Immovable property | 50,00,000 | 1% (TDS is to be deducted at the rate of 1% of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher.) | 50,00,000 |
| 194-IB | Payment of Rent by individual/HUF not liable for audit | 50,000 per month | 5% | 50,000 per month |
| 194-IC | Payment for monetary consideration under Joint Development Agreement | No limit | 10% | No Limit |
| 194J | Fee for Professional or Technical Services (FTS), Royalty, etc. | 30,000 | 2% ( Fees for technical services, certain Royalties, call center) 10%- Others | 50,000 |
| 194K | Payment of Dividends by Mutual funds | 5,000 | 10% | 10,000 |
| 194LA | Payment of compensation on acquisition of Immovable property | 2,50,000 | 10% | 5,00,000 |
| 194LB | Interest from Infrastructure Bond to NRI | No limit | 5% | No Limit |
| 194LBB | Payment of income by Investment fund | No limit | 10% | No Limit |
| 194LBC | Income by Securitization fund | No limit | (a) Individuals/HUFs- 25% (b) Others- 30% | No Limit |
| 194M | Payment of Commission, Brokerage, or Fees for Professional Service by Individual or HUF( other than covered u/s 194C, 194H,194J) | 50,00,000 | 5% | 50,00,000 |
| 194N | Cash withdrawal exceeding a certain limit | (a) 1 crore | 2% | 1 crore |
| (b) Exceeding Rs. 20 lakhs (for those who have not filed an income tax return (ITR) for the last three years prior to withdrawing cash, and the tax due date has expired under section 139(1).) Under this situation, the tax must be deducted at the following rate: | <20 lakh- 2% <3 crore (co-operative society)- 5% | |||
| 194-O | TDS on payment by an E-commerce operator | 5 lakh | 1% in case of availability of PAN 5% in case of unavailability of PAN | 5 Lakh |
| 194Q | Payment for the purchase of goods | 50 lakh | 0.1% | 50 Lakh |
| 194R | Perquisites or benefit to a business or profession | 20,000 | 10% | 20,000 |
| 194S | TDS on the transfer of Virtually Digital Asset | Specified Persons- 50,000 Others- 10,000 | 1% | Specified Persons- 50,000 Others- 10,000 |
| 206AA | TDS in case of unavailability of PAN | (as per the respective section) | Higher of the following: (a) at the rate or rate in force or (b) @20% | (as per the respective section) |
TDS on payments to Non-Resident
Under Section 195 of the IT Act, payers must deduct TDS on payments made to Non-Residents, with no threshold limit. This means TDS applies to the entire amount. The payer must deduct TDS at the time of payment. Additionally, for non-salary payments to NRIs, payers must file Form 27Q quarterly on or before the due date.
TDS Rate Chart for NRI
| Section | Nature of Payment | Threshold Limit (INR) | TDS Rate Chart |
| 195 | Payment of any other sum to a Non-Resident Indian (NRI) | NA | |
| (a) Income in case of investment made by an NRI | 20% | ||
| (b) LTCG income as referred to in Section 115E, Section 112A & sub-clause (iii) of clause (c) of sub-Section (1) of Section 112. | 12.5% | ||
| (c) STCG income as referred to in Section 111A | 20% | ||
| (d) Income by way of interest payable by the Government or an Indian concern on funds borrowed or debt incurred by the Government or the Indian concern in foreign currency (other than income by way of interest under Section 194LB or Section 194LC | 20% | ||
| (e) any other income | 30% |
Major TDS Amendments in Budget 2023
Section 194BA – Introduction of TDS on Winnings from Online Games
The Union Budget 2023 introduces Section 194BA to cover the gaming business under the IT Act. This section will be applicable from 1st July 2023.
The government deducts TDS on winnings at 30% and has removed the INR 10,000 deduction threshold cap.. The payer will be responsible to file a quarterly return of TDS in Form 26Q within the due date.
Section 194N – Enhanced Limit for Co-operative Society
The government proposes to increase the cash withdrawal limit from a co-operative society to INR 3 crores instead of INR 1 crore, effective from April 1, 2023.
This amendment seeks to ease co-operative societies frequent cash transaction burden.
Section 192A- Relaxation in case of unavailability of PAN
Previously, without a PAN, EPF withdrawals within 5 years faced a 30% TDS rate. However, effective from 1st April 2023, the government has reduced the rate to 20%.
TCS Rate Chart
Tax Collected at Source (TCS) is a tax collected by the seller from the buyer on specified goods. The seller is responsible for collecting TCS at the prescribed rate and depositing it with the government.
TCS Rate Chart
Given below are the latest TCS rates:
| Section | Collection Code | Nature of Payment | Threshold (INR) | TCS rates |
| 206C | A | Alcoholic Liquor for Human Consumption | NA | 1% |
| B | Timber obtained under a forest lease | NA | 2% | |
| C | Timber obtained by any mode other than under a forest lease | NA | 2% | |
| D | Any other forest produce not being timber or tendu leaves | NA | 2.5% | |
| E | Scrap | NA | 1% | |
| F, G | Grant of a license, lease, etc of the Parking lot and Toll Plaza respectively | NA | 2% | |
| H | Grant of Mining and Quarrying | NA | 2% | |
| I | Tendu Leaves | NA | 5% | |
| J | Minerals, being coal or lignite, or iron ore | NA | 1% | |
| K | Sale of Bullion | > 2 lakh | 1% | |
| L | Sale of the motor vehicle whether payment is received by cheque or by any other mode | > 10 lakh | 1% | |
| M | Sale in cash of any other goods except bullion & Jewelry | > 2 lakh | 1% | |
| N | Providing of any service (other than Ch-XVII-B) | > 2 lakh | 1% | |
| O | TCS for sale of overseas tour program package | NA | 20% | |
| P | TCS on remittance under LRS for an educational loan taken from a financial institution as mentioned in Section 80E | NA | 0.5% | |
| Q | Foreign remittance under LRS | -7 lakh in case of remittances for education and medical purpose -No limit in the case of other foreign remittance | -5% in case of education and medical remittance -20 %in case of other foreign remittances | |
| R | TCS on sale of goods | NA | 0.1% (1% in case of non-availability of PAN/Aadhar) |
Major TCS Amendments in Budget 2023
Section 206C (1G) Enhanced TCS rate on certain Foreign Remittances
In the past, the TCS rate on foreign remittances was 5%. Budget 2023 proposed to increase the TCS rate to 20% (w.e.f 1st July 2023) in case of all the remittances under LRS and overseas tour packages. However, the TCS rate for educational and medical purposes in excess of INR 7 lakh continues to be at 5%.
FAQs
As per Section 194C, the TDS rate is 1% for individuals and 2% for HUFs, which the payer must deduct. Furthermore, the threshold limit for a single transaction is INR 30,000 and the aggregate Transaction is INR 1,00,000.
Under Section 206AA, if you fail to provide your PAN, the payer must deduct TDS at the higher of 20%, the specified rate in the Act, or the rates as per the Finance Act.
You can ask the payer to furnish you with a TDS certificate in respect of the tax deducted. Furthermore, you can also check Form 26AS on the Income Tax Portal.
As per the provisions of 194Q TDS rate of 0.1% is applicable on the purchase of any goods of value exceeding INR 50 lakhs.
Hey @ViraajAhuja47
TDS and TCS both come under Income Tax.
TDS: Tax Deducted at Source
TDS is a taxation method, where a person making a payment of specific nature is liable to deduct tax and deposit it with the government.
The rate at which TDS is deducted and paid is based on the specified based on nature of the payment.
The person making the payment is required to make deduct and deposit the TDS.
TCS: Tax Collected at Source
TCS is collected by the seller from the buyer at the time of sale made. Sellers selling any specified item are liable to collect tax at a predefined rate from the buyer the time of making a sale. This TCS collected has to be deposited by the seller with the government.
Hope this helps!