TDS Rate Chart FY 2024-25 (AY 2025-26)
Author: Editorial Team | in, Updated on: April 05, 2025
Overview : The Financial Year 2024-25 stands out with significant mid-year rate reductions effective October 1, 2024. Commission/brokerage rates were reduced from 5% to 2%, rent paid by individuals from 5% to 2%, life insurance payouts from 5% to 2%, and e-commerce transactions from 1% to 0.1%. Section 194F for NSS repayments was completely omitted, while threshold limits remained unchanged throughout the year.
Understanding TDS and Its Importance for Indian Taxpayers
Tax Deducted at Source (TDS) represents a pivotal mechanism in India's tax collection framework, where taxes are deducted directly at the source of income generation. When payments such as salaries, professional fees, rent, interest, or commissions are made, the payer (the deductor) deducts a specified percentage of the amount as tax and deposits it with the government. This proactive approach ensures a steady flow of tax revenue and enhances compliance across the economy.
Understanding the TDS provisions for the Financial Year 2024-25 (Assessment Year 2025-26) is particularly crucial due to significant mid-year rate changes introduced by the Finance Act 2024. This comprehensive guide outlines all TDS rates effective from April 1, 2024, with special attention to the modifications that took effect from October 1, 2024.
Simplified TDS Chart - FY 2024-25 (AY 2025-26)
(Rates change mid-year on Oct 1, 2024)
The financial year 2024-25 is unique because several TDS rates changed midway through the year. The table below highlights the most commonly used TDS rates and their mid-year changes effective October 1, 2024:
| Section | Nature of Payment | Rate (Apr 1-Sep 30,'24) | Rate (After Oct 1,'24) | Threshold Limit (₹) |
|---|---|---|---|---|
| 192 | Salary | Slab Rate | Slab Rate | As per the Income Slab |
| 194A | Interest (Bank/PO/Coop Soc) | 10% | 10% | ₹50K (Sr.Cit)/₹40K (Oth) (Ann.) |
| 194A | Interest (Others) | 10% | 10% | ₹5,000 (Ann.) |
| 194C | Contractor Payments | 1% (Ind/HUF), 2% (Oth) | 1% (Ind/HUF), 2% (Oth) | Single ≥₹30K; Agg. Ann. ≥₹1L |
| 194H | Commission/Brokerage | 5% | 2% | ₹15,000 (Ann.) |
| 194-I | Rent (L&B/Furniture) | 10% | 10% | ₹2,40,000 (Ann.) |
| 194-I | Rent (Plant & Machinery) | 2% | 2% | ₹2,40,000 (Ann.) |
| 194-IB | Rent by Ind/HUF (No Audit) | 5% | 2% | ₹50,000 per month |
| 194J | Professional/Director/Other Fees | 10% | 10% | ₹30K (Cat/Yr, excl. Dir.) |
| 194J | Technical Fees/Royalty(Sale)/Call | 2% | 2% | ₹30K (Cat/Yr) |
| 194M | Certain Pay by Ind/HUF | 5% | 2% | ₹50 Lakhs (Ann.) |
| 194Q | Purchase of Goods | 0.1% (>50L) | 0.1% (>50L) | ₹50 Lakhs (Agg. Purch. Ann.) |
| 194R | Business Benefit/Perquisite | 10% | 10% | ₹20,000 (Ann.) |
| 194S | Virtual Digital Asset Transfer | 1% | 1% | ₹50K (Specified)/₹10K (Oth)(Ann.) |
Comprehensive TDS Rate Chart: FY 2024-25 (Assessment Year 2025-26)
(Split rates shown where changes occurred effective 01-Oct-2024)
For a detailed understanding of all applicable TDS provisions, the comprehensive chart below outlines all rates and threshold limits under various sections of the Income Tax Act, including the significant changes effective October 1, 2024. It covers the Financial Year 2024-25 (Assessment Year 2025-26) and shows the rates and thresholds applicable during this year, noting the rate changes that took effect from 1st October 2024.
| Section | Nature of Payment | Rate (%) up to 30 Sep 2024 | Rate (%) From 1 Oct 2024 | Threshold Limit (₹) |
|---|---|---|---|---|
| 192 | Salary Payments | Slab Rate | Slab Rate | Basic Exemption Limit |
| 192A | Premature EPF Withdrawal (<5 yrs service) | 10% | 10% | 50,000 |
| 193 | Interest on Securities | 10% | 10% | 10,000 (Gen)/5,000 (Debentures) |
| 194 | Dividend | 10% | 10% | 5,000 (Ann.) |
| 194A | Interest (Other than Securities) | 10% | 10% | 50K (Sr.Cit-Bank)/40K (Oth-Bank)/5K (Other) |
| 194B | Lottery/Crossword/Gambling Winnings | 30% | 30% | 10,000 (Ann.) |
| 194BA | Online Gaming Winnings | 30% (Net Winnings) | 30% (Net Winnings) | No Threshold |
| 194BB | Horse Race Winnings | 30% | 30% | 10,000 (Ann.) |
| 194C | Payment to Contractor/Sub-contractor | 1% (Ind/HUF), 2% (Oth) | 1% (Ind/HUF), 2% (Oth) | Single ≥30K; Agg. Ann. ≥1L |
| 194D | Insurance Commission | 5% (Ind/Oth), 10% (Co.) | 5% (Ind/Oth), 10% (Co.) | 15,000 (Ann.) |
| 194DA | Life Insurance Policy Payout (Taxable) | 5% (Income Comp.) | 2% (Income Comp.) | Agg. Pay ≥1L (Ann.) |
| 194G | Commission on Lottery Tickets | 5% | 2% | 15,000 (Ann.) |
| 194H | Commission or Brokerage | 5% | 2% | 15,000 (Ann.) |
| 194-I | Rent (P&M / L&B / Furn.) | 2% / 10% | 2% / 10% | 2,40,000 (Ann.) |
| 194-IA | Transfer of Immovable Property | 1% (Con./SDV) | 1% (Con./SDV) | ≥ 50 Lakhs |
| 194-IB | Rent by Ind/HUF (no audit) | 5% | 2% | 50,000 per month |
| 194J | Fees - Prof/Tech etc. | 2%(Tech/Call), 10%(Prof/Dir) | 2%(Tech/Call), 10%(Prof/Dir) | 30K per cat./yr (excl. Dir) |
| 194M | Certain Payments by Ind/HUF (Contract/Comm./Prof.) | 5% | 2% | 50 Lakhs (Ann.) |
| 194N | Cash Withdrawal | 2% (or 5%) | 2% (or 5%) | >1Cr / >3Cr(Coop) (>20L if no ITR) |
| 194-O | Payment by E-com Operator | 1% (Gross) | 0.1% (Gross) | 5 Lakhs (Ind/HUF Part., Ann.) |
| 194P | TDS for Senior Citizens (75+) by Bank | Slab Rate | Slab Rate | Conditions Apply |
| 194Q | Purchase of Goods | 0.1% (>50L) | 0.1% (>50L) | Buyer T/O >10Cr & Purch ≥ 50L Ann. |
| 194R | Benefit/Perquisite (Bus./Prof.) | 10% | 10% | 20,000 (Ann.) |
| 194S | Transfer of Virtual Digital Assets (VDA) | 1% (Con.) | 1% (Con.) | 50K (Spec Payer)/10K (Oth) (Ann.) |
| Sec 194F | Repayment Under NSS | 20% | - (Omitted 01-Oct-24) | - |
| 206C(1H) | TCS on Sale of Goods | 0.1% (>50L) | 0.1% (>50L) | Seller T/O >10Cr & Sale ≥ 50L Ann. |
TDS is a system where tax is deducted when payments like salaries or rent are made. For FY 2024-25, payers must deposit TDS by the 7th of the next month (March payments by April 30th). Late deposits incur 1.5% monthly interest. Non-compliance can result in penalties, disallowance of expenses, and legal action.
Key Mid-Year Changes in TDS Rates Effective from October 1, 2024
The Finance Act 2024 introduced several significant modifications to TDS rates effective from October 1, 2024. Understanding these changes is crucial for compliance:
- Commission and Brokerage (Section 194H) : The Rate was Reduced from 5% to 2%; this 60% reduction primarily benefits insurance agents, mutual fund distributors, and sales agents working on commission models. The change improves working capital for these professionals while maintaining tax compliance. For example, on a ₹100,000 commission, the TDS reduces from ₹5,000 to ₹2,000, providing immediate cash flow relief while ensuring tax collection at source.
- Rent Paid by Individuals/HUF (Section 194-IB) : Rate Reduced from 5% to 2%; this change applies specifically to individuals or HUFs not subject to tax audit who pay monthly rent exceeding ₹50,000. For landlords, this means improved monthly cash flow—on a ₹75,000 monthly rent, TDS reduces from ₹3,750 to ₹1,500. Tenants still must comply with deduction requirements, but the reduced rate simplifies the process and better aligns with most landlords' actual tax liability.
- Life Insurance Policy Payouts (Section 194DA) : The rate is Reduced from 5% to 2%; this reduction applies to non-exempt life insurance policy payouts with a taxable component. On a ₹500,000 taxable maturity amount, TDS now reduces from ₹25,000 to ₹10,000. This mainly benefits senior citizens and policyholders in lower tax brackets who previously had to file returns solely to claim refunds of excess TDS. The threshold remains unchanged at ₹1,00,000 per year.
- Commission on Lottery Tickets (Section 194G) : Rate Reduced from 5% to 2%. This specialised reduction benefits authorised lottery distributors operating on thin margins. The change creates consistency with other commission-based TDS provisions like Section 194H, simplifying compliance for businesses involved in multiple commission activities. The threshold remains at ₹15,000 annually, ensuring smaller distributors stay exempt while larger operators contribute proportionately.
- Payments by Individuals/HUF (Section 194M) : Rate Reduced from 5% to 2%. This provision applies to high-value payments by individuals and HUFs that are not subject to tax audit requirements. Typically affecting one-time services like home renovations or wedding planning exceeding ₹50 lakhs annually, the reduced rate simplifies compliance for non-business payers. An individual paying ₹60 lakhs for renovation now deducts ₹1.2 lakhs instead of ₹3 lakhs.
- E-commerce Transactions (Section 194-O) : Significant Reduction from 1% to 0.1%; this dramatic 90% reduction significantly improves cash flow for online sellers, particularly SMEs on thin margins. For a seller with monthly sales of ₹10 lakhs, TDS reduces from ₹10,000 to just ₹1,000. The threshold remains at ₹5 lakhs annually for individual/HUF participants with PAN/Aadhaar, keeping small sellers exempt while larger operators benefit from the lower rate.
- Omission of Section 194F : The complete removal of this provision, which previously mandated 20% TDS on NSS withdrawals, primarily benefits senior citizens. Since NSS closed to new subscriptions in 1992, this change streamlined the tax system by eliminating an outdated requirement. Account holders now receive their full withdrawal amount without TDS deduction, eliminating unnecessary compliance burdens for a diminishing taxpayer group.
At Setindiabiz, we offer comprehensive TDS compliance services
Our dedicated tax professionals ensure accurate TDS calculations, timely deposits, and seamless compliance, protecting your business from penalties while optimising your tax position. Partner with Setindiabiz for hassle-free TDS management and focus your energies on growing your business.
- Expert guidance on navigating the mid-year rate changes
- Timely alerts for TDS deduction and deposit deadlines
- Comprehensive support for quarterly TDS return preparation and filing
- Assistance with lower deduction certificate applications
- Resolution of TDS-related notices and demands
Conclusion
FY 2024-25 presented unique challenges with mid-year rate changes requiring careful attention to payment timing. Setindiabiz offers specialised TDS compliance solutions addressing these complexities, including expert guidance on rate changes, comprehensive return preparation support, and resolution of notices. Our professionals ensure accurate calculations while protecting your business from penalties and optimising your tax position.
Disclaimer : This information is based on the Income Tax Act 1961 and incorporates changes introduced in the Finance Act 2024. While we strive for accuracy, tax laws are complex and subject to interpretation. We recommend consulting with a tax professional for advice specific to your situation.
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Editorial Team | in
Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.