Government Subsidy Schemes in Delhi

TDS Rates for FY 2025–26: A Complete Guide with Policy Insights

As the Indian financial year 2025–26 unfolds, businesses, professionals, and individuals must keep up with the updated Tax Deducted at Source (TDS) rates, thresholds, and policy changes introduced in the latest Finance Act, 2025. TDS continues to serve as a mechanism for pre-collection of taxes and ensures timely deposit of income tax to the government treasury.

Here is a comprehensive overview of the key TDS sections, their thresholds, and rates applicable from 1st April 2025 to 31st March 2026, along with relevant government policy context.

🔍 What is TDS and Why is it Important?

TDS is a means to collect income tax in India. According to Income Tax Act, 1961, certain payments like salary, interest, rent, commission, professional fees, etc., are subject to deduction of tax at the source of payment. It helps the government in timely collection of revenue and acts as a tracking mechanism for income transactions.

🧾 Highlights of TDS Rates for FY 2025–26

Nature of Payment	TDS Section	Threshold Limit	TDS Rate – Individuals/HUF	TDS Rate – Others
Salary	192	₹2.5 lakh (as per slabs)	Slab Rate	Slab Rate
EPF Withdrawal (Premature)	192A	₹50,000	10%	10%
Interest on Securities	193	₹10,000	10%	10%
Dividends	194	₹10,000	10%	10%
Lottery, Game Winnings	194B/BA	₹10,000	30%	30%
Contractor Payments	194C	₹30,000 (single); ₹1,00,000 (aggregate)	1%	2%
Professional Fees	194J	₹50,000	10%	10%
Rent on Land & Buildings	194I	₹50,000/month	10%	10%
Rent on Plant & Machinery	194I	₹50,000/month	2%	2%
Sale of Immovable Property	194IA	₹50 lakh	1%	1%
Cryptocurrency Transactions	194S	No Limit	1%	1%
Online Gaming Winnings	194BA	No Threshold	30%	30%

✅ Note: This is not an exhaustive list. For a full section-wise TDS list, refer to the official Finance Act or the document attached above.

🏛️ Policy Updates from Finance Act, 2025

Section 206CR (TCS on Sale of Goods): Omitted w.e.f. 1st April 2025, simplifying compliance for sellers not covered under Section 206C(1), (1F), or (1G).
Senior Citizens (Section 194P): Senior citizens aged 75+ with only pension and interest income are not required to file ITR if TDS is deducted by the bank.
Crypto and Digital Assets (Section 194S): Reinforced 1% TDS on transfers of virtual digital assets including cryptocurrencies, as per CBDT guidelines.
Online Gaming (Section 194BA): A flat 30% TDS continues to be levied on winnings from online games, regardless of amount—reflecting the government's tightened scrutiny on digital platforms.

🧾 TDS Compliance Tips for FY 2025–26

Ensure PAN Availability: Under Section 206AA, failure to furnish PAN attracts a higher TDS rate—either twice the applicable rate or 20%, whichever is higher.
Aggregate Transactions: Always monitor cumulative payments (e.g., contractor or rent) to avoid unexpected TDS obligations.
E-Filing & Return Submission: Regularly reconcile TDS deducted with Form 26AS and file returns timely to avoid mismatches.
Use Form 15G/15H: Eligible individuals may submit these to avoid TDS where total income is below taxable limits.

👨‍⚖️ Government’s Intent Behind TDS Framework

The TDS regime aligns with the broader goal of tax administration reforms, promoting:

Transparency in financial dealings
Early tax collection
Reduced tax evasion
Widening of the tax base

The Finance Ministry continues to refine TDS provisions to address digital economy nuances, reduce non-compliance, and ensure ease of doing business for MSMEs and startups.

📌 Final Words

With every fiscal year, staying updated with TDS changes is crucial for tax planners, accountants, HR professionals, and entrepreneurs. As per the Finance Act, 2025, most thresholds and rates remain consistent with FY 2024–25, with key attention areas being digital transactions, crypto trading, and contractor payments.

📥 For the complete list, download the TDS Chart for FY 2025–26 or consult a professional tax advisor.

Prepared by:
SkillCouncils.com | Tax & Compliance Desk
Email: support@skillcouncils.com | 📞 Helpline: +91-8595950085

TDS Rates FY 2025-26

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