Tax Deducted at Source, also known as TDS, is a system of taxation where the person/entity responsible for making specific payments deducts the applicable tax before the payment is credited to the receiver if it exceeds threshold limit specified in particular section.
There are various sections in Income Tax Law, which specify different TDS rates, nature of payment & its threshold limits for TDS and the same have been summarized in this article.
| Section No. | Nature of Payment | Threshold | TDS Rate |
| 192 | Salaries | As per Slab | Normal Slab Rate (or) New Tax Regime Slab Rate as opted by employee |
| 192A | Premature withdrawal from EPF | 50,000 | 10% |
| 193 | Interest on Securities | 2,500 | 10% |
| 194 | Dividends | 5,000 | 10% |
| 194A | Interest (Banks) | 50,000(Senior Citizen) 40,000(Others) | 10% |
| 194A | Interest (Others) | 5,000 | 10% |
| 194B | Winning from Lotteries | 10,000 | 30% |
| 194BB | Winnings from Horse Race | 10,000 | 30% |
| 194C | Contractor – Single Transaction | 30,000 | 1%(Ind/HUF) 2%(Others) |
| 194C | Contractor – During the F.Y. | 1 Lakh | 1%(Individual/HUF) 2%(Others) |
| 194C | Transporter (44AE) declaration with PAN | – | – |
| 194D | Insurance Commission (15G-15H allowed) | 15,000 | 5%(Individual) 10%(Company) |
| 194DA | Life insurance Policy | 1 Lakh | 5% |
| 194E | Non-Resident Sportsmen or Sports Association | – | 20% |
| 194EE | NSS | 2,500 | 10% |
| 194F | Repurchase Units by MFs | – | 20% |
| 194G | Commission – Lottery | 15,000 | 5% |
| 194H | Commission / Brokerage | 15,000 | 5% |
| 194I(a) | Rent of Plant / Machinery / Equipment | 2.40 Lakh | 2% |
| 194I(b) | Rent of Land Building & Furniture | 2.40 Lakh | 10% |
| 194IA | Transfer of certain immovable property other than agriculture land | 50 Lakh | 1% |
| 194IB | Rent by Individual / HUF not liable to tax audit | 50,000/PM | 5% |
| 194IC | Payment of monentary consideration under Joint Development agreement | – | 10% |
| 194J | Fees for technical services, call center, royalty for sale etc. | 30,000 | 2% |
| 194J | Fee for professional service or royalty etc. | 30,000 | 10% |
| 194K | Payment of income in respect of units payable to resident person | – | 10% |
| 194LA | Compensation on transfer of certain immovable property | 2.50Lakh | 10% |
| 194LB | Income by way of interest from infrastructure debt fund(non-resident) | – | 5% |
| 194LBA | Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. | – | 10% |
| 194LBB | Income in respect of investment of investment fund | – | 10% |
| 194LBC | Income in respect of investment in securitization trust | – | 30%(Others) 25%(Individual & HUF) |
| 194M | Payment to commission( not being insurance commission), brokerage etc. by individual & HUF who are not liable to deduct TDS under section 194C, 194H, or 194J. | 50 Lakh | 5% |
| 194N | Cash withdrawal in excess of 1 crore during the previous year from 1 or more account with a bank or co-operative society | 1 Cr | 2% |
| 194N | Cash withdrawal in excess of 20 Lakhs during the previous year if assessee has not furnished return for last 3 assessment years | 20 Lakh | 2% |
| 194N | Cash withdrawal in excess of 1 Cr during the previous year if assessee has not furnished return for last 3 assessment years | 1 Cr | 5% |
| 194O | TDS on e-commerce participants | 5 Lakh | 1% |
| 194Q | Purchase of goods (applicable w.e.f 01.07.2021) | 50 Lakh | 0.10% |
| 195 | Payment of any other sum to a Non-resident(The rate of TDS shall be increased by applicable surcharge and Health & Education cess):- | ||
| a) Income in respect of investment made by a Non-resident Indian Citizen | – | 20% | |
| b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen | – | 10% | |
| c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 | – | 10% | |
| d) Income by way of long-term capital gains as referred to in Section 112A | – | 10% | |
| e) Income by way of short-term capital gains referred to in Section 111A | – | 15% | |
| f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses 10(33), 10(36) and 112A | – | 20% | |
| g) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) | – | 20% | |
| h) Any other Income | – | 30% | |
| 194P | TDS on Senior Citizen above 75 Years | Refer Note 1 | Refer Note 1 |
| 206AB | TDS on non-filers of ITR at higher rates (applicable w.e.f 01.07.2021) | Refer Note 2 | Refer Note 2 |
Note 1:-
A senior citizen of the age of 75 year or above is not required to file the return of income, if the
following conditions are satisfied –
- The senior citizen is resident in India and of the age of 75 or more during the previous year,
- He has only pension income and may also have interest income from the same bank (specified bank – to be notified by the CG) in which he is receiving his pension income,
- He shall be required to furnish a declaration to the specified bank. The declaration shall be containing such particulars, in such form and verified in such manner, as may be prescribed.
Note 2:-
The TDS on non -filers of ITR at higher rates This section shall not apply where the tax is required to be deducted under sections 192, 192A, 194B, 194BB, 194LBC or 194N of the Act. The Resident Indian are liable to pay twice the rate specified in the relevant provision of the Act; or twice the rate or rates in force; or the rate of 5%.
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