Tax Deducted at Source (TDS) is one of the most important compliance requirements for businesses, professionals, and individuals making specified payments. Yet, every year, a large number of taxpayers end up receiving notices due to incorrect deductions, missed thresholds, or applying wrong rates.

To simplify the landscape, we’ve created a consolidated guide based on the most commonly used TDS sections — summarised neatly in the reference chart shared above. This blog breaks down each major TDS category, the threshold limits, and applicable rates in a practical, easy-to-apply format.

Your Complete Guide to TDS Sections, Thresholds & Rates for FY 2025–26

1. Salary – Section 192

TDS on salary is deducted based on the employee’s applicable income tax slab after factoring in exemptions, deductions, and declarations. Unlike other sections with fixed rates, Section 192 is dynamic and personalised.

Threshold: Basic exemption limit
Rate: As per slab

2. EPF Premature Withdrawal – Section 192A

Withdrawals from EPF before completing five years of service trigger TDS.

Threshold: ₹50,000
Rate: 10%

3. Interest on Securities – Section 193

Any interest paid on securities like debentures or bonds may attract TDS.

Threshold: ₹10,000
Rate: 10%

4. Dividend Income – Section 194

Companies distributing dividends to resident shareholders must deduct TDS.

Threshold: ₹10,000
Rate: 10%

5. Interest Other Than Securities – Section 194A

This applies to interest from banks, deposits, loans, or other financial arrangements.

Threshold: ₹50,000 for senior citizens (₹1,00,000 for those over 60), otherwise ₹50,000
Rate: 10%

6. Lottery, Game Winnings & Horse Racing – Sections 194B & 194BB

Winnings from lotteries, online games, or horse races attract higher TDS due to their nature.

Threshold: ₹10,000 (per transaction)
Rate: 30%

7. Contractors & Subcontractors – Section 194C

This applies to payments to contractors or subcontractors for performing work, including supply of labour.

Threshold: ₹30,000 (single) / ₹1,00,000 (annual)
Rate:

• 1% (Individuals / HUF)
• 2% (Others)
  

8. Insurance Commission – Section 194D

Threshold: ₹20,000
Rate: 5%

9. Life Insurance Payout (Non-exempt) – Section 194DA

Threshold: ₹1,00,000
Rate: 2%

10. Commission or Brokerage – Section 194H

Threshold: ₹20,000
Rate: 5%

11. Rent Payments – Sections 194I & 194IB

Section 194I (Business Rent):

• Land/Building/Furniture: 10%
  
• Plant & Machinery: 2%
  Threshold: ₹50,000/month

Section 194IB (Rent by Individual/HUF not liable to audit):
Threshold: ₹50,000/month
Rate: 5%

12. Purchase of Property – Section 194IA

Threshold: ₹50,00,000
Rate: 1%

13. Professional/Technical Fees – Section 194J

Threshold: ₹30,000
Rate:

• 10% for professional services
  
• 2% for technical services
  

14. Income from Mutual Fund Units – Section 194K

Threshold: ₹10,000
Rate: 10%

15. Cash Withdrawals – Section 194N

Threshold:

• ₹20,00,000
  
• ₹1,00,00,000 (depending on previous filings)
  Rate: 2% / 5%
  

16. E-commerce Payments – Section 194O

Threshold: ₹5,00,000
Rate: 1%

17. Purchase of Goods – Section 194Q

Businesses with turnover exceeding ₹10 crore must deduct TDS on purchase of goods where the value exceeds ₹50 lakh.

Threshold: ₹50,00,000
Rate: 0.10%

18. Business Perquisites – Section 194R

Applicable when a business provides perquisites or benefits to a resident.

Threshold: ₹20,000
Rate: 10%

19. Virtual Digital Assets – Section 194S

Covers cryptocurrency and other virtual digital asset transactions.

Threshold: ₹10,000 / ₹50,000
Rate: 1%

20. Partner Withdrawals from Firm – Section 194T

Threshold: ₹20,000
Rate: 10%

Why This Consolidated Guide Matters

TDS compliance can become overwhelming when payments span salaries, contractors, rent, commissions, goods purchases, and digital assets. Misinterpretation leads to:

• Incorrect deductions
• Aggregated threshold breaches
• Late filing fees
• Penalties
• Mismatch between Form 26AS and books

A structured, visual summary — like the one provided — ensures accuracy, consistency, and timely compliance across finance teams.

Understanding the thresholds and rates helps you stay compliant, avoid penalties, and maintain smooth operations. With frequent updates to tax laws, consolidating information in an easy-to-reference format is essential for businesses, finance professionals, and entrepreneurs.

For a deeper breakdown of evolving TDS rules and practical examples, explore our detailed blogs linked below. Get in touch with Pitchers Global today!