Tax deduction at source (TDS) means collecting tax on income in the form of salary, rent, asset sales, dividends, etc., by requiring the payer to collect income tax due on such income while crediting/paying to the payee and deposit the same to the government on payee’s behalf. Below you’ll find the TDS rate chart, which summarises all the TDS provisions of the Income Tax Act.
Budget 2023 updates –
- Section 194BA – Introduction of TDS on income from online gaming
- Section 196A – Starting April 1st, 2023, non-residents earning income from mutual funds in India can provide a Tax Residency Certificate to avail the benefit of TDS as per rate given in tax treaty, instead of 20%.
- Section 192A – TDS rate reduced to 20% from maximum marginal rate on PF withdrawal for employees who do not have PAN
- Section 193 – No exemption from TDS on interest from listed debentures. Therefore, tax has to be deducted on interest on such specified securities.
- Section 194N – TDS threshold has been increased on cash withdrawal by by co-operative societies. Starting April 1st, 2023, tax will be deducted on cash withdrawals by co-operative societies if the amount exceeds Rs 3 crore, instead of the previous limit of Rs 1 crore.
Budget 2022 updates –
- New Section 194S- A person is liable for Tax Deduction at Source (TDS) at 1% at the time of payment of the transfer of virtual digital assets.
- Sale of immovable property under Section 194-IA- It is proposed to amend the amount on which TDS should be deducted. The person buying the property should deduct tax at 1% on the sum paid/credited or the stamp duty value of such property, whichever is higher.
- New Section 194R- TDS at 10% should be deducted by any person who provides perks or benefits, whether convertible into money or not, to any resident for carrying out any business or profession by such resident.
The following tables list the various TDS rates applicable to resident and non-resident payments as well as TDS rates on domestic and foreign companies in India. Any person paying income is responsible to deduct tax at source and deposit TDS within the stipulated due date.
TDS Rate Charts for the FY 2023-24
| Section | Deductee* | Nature of transaction | Threshold Limit (Rs) | TDS Rate |
| 192 | R, NR | Payment of salary | Basic exemption limit of employee | Normal Slab Rates |
| 192A | R, NR | Premature withdrawal from EPF | 50,000 | 10% Budget 2023: TDS rate for EPF withdrawals without a PAN number is now 20%, from the previous maximum marginal rate |
| 193 | R | Interest on securities | Debentures- 5,000 8% Savings (Taxable) Bonds 2003 or 7.75% Savings (Taxable) Bonds 2018- 10,000 Other securities- No limit | 10% Budget 2023: Exemption of TDS on interest from listed debentures has been removed. Therefore, tax has to be deducted on interest on such specified securities. |
| 194 | R | Payment of any dividend | 5,000 | 10% |
| 194A | R | Interest from other than interest from securities (from deposits with banks/post office/co-operative society) | Senior Citizens- 50,000 Others- 40,000 | 10% |
| 194A | R | Interest from other than interest on securities u/s 193 and interest from banks/post office/co-operative society. For e.g., interest from friends and relatives | 5,000 | 10% |
| 194B | R, NR, FC | Income from lottery winnings, card games, crossword puzzles, and other games of any type | Aggregate income from lottery winnings, card games, crossword puzzles etc- 10,000 Online Gamine- Refer 194BA | 30% |
| 194BA | R, NR, FC | Income from online games | Nil | 30% |
| 194BB | R, NR, FC | Income from horse race winnings | 10,000 Aggregate winnings during a financial year not single transaction | 30% |
| 194C | R | Payment to contractor/sub-contractor:- | Single transaction- 30,000 Aggregate transactions- 1,00,000 | |
| a) Individuals/HUF | 1% | |||
| b) Other than Individuals/HU | 2% | |||
| 194D | R | Insurance commission to: | ||
| a) Domestic Companies | 15,000 | 10% | ||
| b) Other than companies | 15,000 | 5% | ||
| 194DA | R | Income for the insurance pay-out, while payment of any sum in respect of a life insurance policy. | 1,00,000 | 5% |
| 194E | NR, FC | Payment to non-resident sportsmen/sports association | No limit | 20% *This rate shall be increased by applicable surcharge and 4% cess |
| 194EE | R, NR | Payment of amount standing to the credit of a person under National Savings Scheme (NSS) | 2,500 | 10% |
| 194F | R, NR | Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund | No limit | 20% |
| 194G | R, NR, FC | Payments, commission, etc., on the sale of lottery tickets | 15,000 | 5% |
| 194H | R | Commission or brokerage | 15,000 | 5% |
| 194-I | R | Rent: | ||
| 194-I(a) Rent on plant and machinery | 2,40,000 | 2% | ||
| 194-I(b) Rent on land/building/furniture/fitting | 2,40,000 | 10% | ||
| 194-IA | R | Payment in consideration of transfer of certain immovable property other than agricultural land. | 50,00,000 | 1% |
| 194-IB | R | Rent payment by an individual or HUF not covered u/s. 194-I | 50,000 per month | 5% |
| 194-IC | R | Payment under Joint Development Agreements (JDA) to Individual/HUF | No limit | 10 |
| 194J | R | Any sum paid by way of fee for professional services | 30,000 | 10% |
| 194J | R | Any sum paid by way of remuneration/fee/commission to a director | 30,000 | 10% |
| 194J | R | Any sum paid for not carrying out any activity concerning any business; | 30,000 | 10% |
| 194J | R | Any sum paid for not sharing any know-how, patent, copyright, etc. | 30,000 | 10% |
| 194J | R | Any sum paid as a fee for technical services | 30,000 | 2% |
| 194J | R | Any sum paid by way of royalty towards the sale or distribution, or exhibition of cinematographic films | 30,000 | 2% |
| 194J | R | Any sum paid as fees for technical services, but the payee is engaged in the business of operation of the call center. | 30,000 | 2% |
| 194K | R | Payment of any income for units of a mutual fund, for example, dividend | No limit | 10% |
| 194LA | R | Payment in respect of compensation on acquiring certain immovable property | 2,50,000 | 10% |
| 194LB | NR, FC | Payment of interest on infrastructure debt fund to Non-Resident | No limit | 5% *This rate shall be increased by applicable surcharge and 4% cess |
| 194LC | NR, FC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against loan agreement or the issue of long-term bonds | No limit | 5% |
| 194LC | NR, FC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against the issue of long-term bonds listed in IFSC | No limit | 4% |
| 194LD | NR, FC | Payment of interest on bond (rupee-denominated) to FII or a QFI | No limit | 5% |
| 194LBA(1) | R | Certain income distributed by a business trust to its unitholder | No limit | 10% |
| 194LBA(2) | NR, FC | Interest income of a business trust from SPV distribution to its unitholders | No limit | 5% |
| 194LBA(2) | NR, FC | Dividend income of a business trust from SPV, in which it holds the entire share capital exempt the capital held by the government, and distribution to its unitholders | No limit | 10% |
| 194LBA(3) | NR | Rental income payment of assets owned by the business trust to the unitholders of such business trust | No limit | 30% |
| 194LBA(3) | FC | Rental income payment of assets owned by the business trust to the unitholders of such business trust | No limit | 40% |
| 194LBB | R, NR | Certain income paid to a unitholder in respect of units of an investment fund | No limit | 10% |
| 194LBB | FC | Certain income paid to a unitholder in respect of units of an investment fund | No limit | 40% |
| 194LBC | R | Income from investment in securitisation fund received to an individual and HUF | No limit | 25% |
| 194LBC | R | Income from investment in securitisation fund received to a domestic company | No limit | 10% |
| 194LBC | FC | Income from investment in securitisation fund received to a foreign company | No limit | 40% |
| 194LBC | NR | Income from investment in securitisation fund received to NRI | No limit | 10% |
| 194M | R | Certain payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J | 50,00,000 | 5% |
| 194N | R, NR | Cash withdrawal exceeding a certain amount | Co-operative society: 3 Crore Others: 1 crore | 2% |
| 194N | R, NR | Cash withdrawal in case person not filing ITR for last three years and the original ITR filing due date expired | – 20 lakh to 1 crore -1 crore | 2% 5% *If cash is withdrawn by a co-operative society the limit shall be Rs 3 Crore instead of Rs 1 Crore |
| 194O | R | Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform. | 5,00,000 | 1% 5% in case PAN is not furnished |
| 194P | R | Payment of pension or interest to specified senior citizens of age 75 years or more | Basic exemption limit of senior citizens or super senior citizens | Normal tax slab rates |
| 194Q | R | Payments for the purchase of goods | 50,00,000 | 0.10% |
| 194R | R | Perquisite or benefit to a business or profession | 20,000 | 10% |
| 194S | R | TDS on the transfer of virtual digital assets | Specified Persons- 50,000 Others- 10,000 | 1% |
| 195 | NR | Income on investments made by NRI citizen | No limit | 20% |
| 195 | NR | Income by way of LTCG referred to in section 115E in the case of NRI | No limit | 10% |
| 195 | NR, FC | Income by way of LTCG under section 112(1)(c)(iii) | No limit | 10% |
| 195 | NR, FC | Income by way of LTCG under section 112A | No limit | 10% |
| 195 | NR, FC | Income by way of STCG under section 111A | No limit | 15% |
| 195 | NR, FC | Any other income by way of LTCG | No limit | 20% |
| 195 | NR, FC | Interest payable on money borrowed by the government or Indian concern in foreign currency | No limit | 20% |
| 195 | NR, FC | Income from royalty payable by the Indian concern or the government, for the copyright in a subject referred in the first proviso of section 115A or computer software referred to in the second proviso of section 115A | No limit | 10% |
| 195 | NR | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy | No limit | 10% |
| 195 | FC | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy If the agreement for such royalty payment is entered in between 31st March 1961 and 1st April 1976 | No limit | 50% |
| 195 | FC | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy If the agreement for such royalty payment is entered after 31st March 1976 | No limit | 10% |
| 195 | NR | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy | No limit | 10% |
| 195 | FC | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy If the agreement for such payment is entered in between 29th February 1964 and 1st April 1976 | No limit | 50% |
| 195 | FC | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy If the agreement for such payment is entered after 31st March 1976 | No limit | 10% |
| 195 | NR | Any other income | No limit | 30% |
| 195 | FC | Any other income | No limit | 40% |
| 196B | NR, FC | Income (including LTCG) from units of an offshore fund | No limit | 10% |
| 196C | NR, FC | Income (including LTCG) from foreign currency bonds or GDR of an Indian company | No limit | 10% |
| 196D | NR, FC | Income (excluding dividend and capital gain) from Foreign Institutional Investors. | No limit | 20% |
| 206AB | R | Payment to non-filers, i.e. those who have not filed their income tax return in the last year Budget 2023: Non filers do not include: – People who are not required to file their ITRs – NRs who do not have a PE in India | No limit | – 2 times the rate given in the Income Tax Act or Finance Act or – 5%, whichever is higher |
| 206AA | R, NR, FC | TDS rate in case of Non availability of PAN | No limit | Rates specified above or 20%, whichever is higher |
*”R” denotes Resident,
“FC” denotes Foreign company, and
“NR” denotes Non-Resident.
Note:
- The Normal slab rates for FY 2023-24 for individuals and HUF have changed under the new tax regime.
- Applicable surcharge and health and education cess shall be deducted in addition to the TDS rates deducted for NRI deductees.
- In the above TDS rate chart, the ‘Resident’ payee under the column ‘TDS deducted’ includes domestic companies.
- All TDS amendments introduced in Budget 2023 have been included in the TDS chart above.
Union Budget 2023 New TDS Provisions
Section 194BA – TDS on online gaming
Starting from April 1, 2023, TDS will be deducted on income earned from online gaming. If you win money, the online gaming platform giving you the winnings will deduct 30% TDS on the net winnings. TDS will be deducted when you withdraw the winnings from your account. In case you do not withdraw the winnings by the end of the financial year, then the tax will be deducted on the unwithdrawn amount lying in your account by the end of financial year.
Section 196A – Reduced TDS rate as per tax treaty
When a non-resident earned income from mutual funds in India, the TDS rate was 20%. However, from April 1, 2023, the non-resident can choose to pay a lower tax rate given in the tax treaty by providing a tax residency certificate.
Section 192A – Relaxation for employees without PAN
Starting from April 1, 2023, if an employee does not furnish PAN (Permanent Account Number), they will receive their provident fund balance after a 20% tax deduction. Earlier, tax was deducted at maximum marginal rate (MMR) which would be as high as 42.74%.
Section 193 – Tax deduction on interest from specified securities
Before April 1, 2023, individuals often forgot to report the interest income they earned from specified securities in their income tax returns because TDS was not deducted. Now, starting from April 1, 2023, tax will be deducted from the interest earned on listed securities in dematerialized form. This change will ensure accurate reporting of income in ITR and allow the government to collect appropriate taxes.
Section 194N – Increased TDS threshold for cooperative societies
From April 1, 2023, if a co-operative society withdraws cash, TDS will be applicable when the withdrawal amount exceeds Rs. 3 Crore. This threshold was previously Rs. 1 Crore.
Section 194R – Clarification on TDS deductions for benefits or perquisites
In the 2023 budget, it was clarified that TDS should be deducted on benefits or perquisites, whether they are in cash, in kind, or a combination of both. This rule also applies to Section 28(iv).
New Section 155(20) – Credit of TDS in the year of income reporting
If a taxpayer reports income on an accrual basis in one year but the tax on that income is deducted in the following financial year, it can cause mismatch with tax credits. From October 1, 2023, taxpayers can apply for the tax credit in the financial year in which the income is declared in their tax return. The application must be made within two years of the financial year in which the tax credit is reflected.
Overview of TDS Rate Chart for the FY 2023-24
| Section | Nature of transaction | TDS Rate |
| 192 | Payment of salary | Normal Slab Rates |
| 192A | Premature withdrawal from EPF | With PAN: 10% Without PAN: 20% |
| 193 | Interest on securities | 10% |
| 194 | Payment of any dividend | 10% |
| 194A | Interest other than interest from securities (from deposits with banks/post office/co-operative society)Interest from banks/post office/co-operative society | 10% |
| 194B | Income from lottery winnings, card games, crossword puzzles etc. | 30% |
| 194BA | Income from online games | 30% |
| 194BB | Income from horse race winnings | 30% |
| 194C | Payment to contractor/sub-contractor:- | |
| a) Individuals/HUF | 1% | |
| b) Other than Individuals/HU | 2% | |
| 194D | Insurance commission to: | |
| a) Domestic Companies | 10% | |
| b) Other than companies | 5% | |
| 194DA | Insurance pay-out in respect of a life insurance policy | 5% |
| 194E | Payment to non-resident sportsmen/sports association | 20% + surcharge + 4% cess |
| 194EE | Payment of amount standing to the credit of a person under National Savings Scheme (NSS) | 10% |
| 194F | Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund | 20% |
| 194G | Payments, commission, etc., on the sale of lottery tickets | 5% |
| 194H | Commission or brokerage | 5% |
| 194-I | Rent: | |
| 194-I(a) Rent on plant and machinery | 2% | |
| 194-I(b) Rent on land/building/furniture/fitting | 10% | |
| 194-IA | Payment in consideration of transfer of certain immovable property other than agricultural land. | 1% |
| 194-IB | Rent payment by an individual or HUF not covered u/s. 194-I | 5% |
| 194-IC | Payment under Joint Development Agreements (JDA) to Individual/HUF | 10 |
| 194J | Any sum paid by way of fee for professional services | 10% |
| 194J | Any sum paid by way of remuneration/fee/commission to a director | 10% |
| 194J | Any sum paid for not carrying out any activity concerning any business; | 10% |
| 194J | Any sum paid for not sharing any know-how, patent, copyright, etc. | 10% |
| 194J | Any sum paid as a fee for technical services | 2% |
| 194J | Any sum paid by way of royalty towards the sale or distribution, or exhibition of cinematographic films | 2% |
| 194J | Any sum paid as fees for technical services, but the payee is engaged in the business of operation of the call center. | 2% |
| 194K | Payment of any income for units of a mutual fund, for example, dividend | 10% |
| 194LA | Payment in respect of compensation on acquiring certain immovable property | 10% |
| 194LB | Payment of interest on infrastructure debt fund to Non-Resident | 5% + surcharge + 4% cess |
| 194LC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against loan agreement or the issue of long-term bonds | 5% |
| 194LC | Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against the issue of long-term bonds listed in IFSC | 4% |
| 194LD | Payment of interest on bond (rupee-denominated) to FII or a QFI | 5% |
| 194LBA(1) | Certain income distributed by a business trust to its unitholder | 10% |
| 194LBA(2) | Interest income of a business trust from SPV distribution to its unitholders | 5% |
| 194LBA(2) | Dividend income of a business trust from SPV, in which it holds the entire share capital exempt the capital held by the government, and distribution to its unitholders | 10% |
| 194LBA(3) | Rental income payment of assets owned by the business trust to the unitholders of such business trust | 30% |
| 194LBA(3) | Rental income payment of assets owned by the business trust to the unitholders of such business trust | 40% |
| 194LBB | Certain income paid to a unitholder in respect of units of an investment fund | 10% |
| 194LBB | Certain income paid to a unitholder in respect of units of an investment fund | 40% |
| 194LBC | Income from investment in securitisation fund received to an individual and HUF | 25% |
| 194LBC | Income from investment in securitisation fund received to a domestic company | 10% |
| 194LBC | Income from investment in securitisation fund received to a foreign company | 40% |
| 194LBC | Income from investment in securitisation fund received to NRI | 10% |
| 194M | Certain payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J | 5% |
| 194N | Cash withdrawal from a banking company, co-operative society engaged in the business of banking or a post office: | 2% |
| Filed ITR during the last three years and cash withdrawal exceeds Rs 3 crore | 2% | |
| In case person has not filed ITR for the last three years – total cash withdrawn is more than ₹20 lacs and up to ₹3 Crore in a FY – total cash withdrawn is more than ₹3 Crore is a financial year | – 2% – 5% | |
| 194O | Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform. | 1% 5% in case PAN is not furnished |
| 194P | Payment of pension or interest to specified senior citizens of age 75 years or more | Normal tax slab rates |
| 194Q | Payments for the purchase of goods | 0.10% |
| 194R | Perquisite or benefit to a business or profession | 10% |
| 194S | TDS on the transfer of virtual digital assets | 1% |
| 195 | Income on investments made by NRI citizen | 20% |
| 195 | Income by way of LTCG referred to in section 115E in the case of NRI | 10% |
| 195 | Income by way of LTCG under section 112(1)(c)(iii) | 10% |
| 195 | Income by way of LTCG under section 112A | 10% |
| 195 | Income by way of STCG under section 111A | 15% |
| 195 | Any other income by way of LTCG | 20% |
| 195 | Interest payable on money borrowed by the government or Indian concern in foreign currency | 20% |
| 195 | Income from royalty payable by the Indian concern or the government, for the copyright in a subject referred in the first proviso of section 115A or computer software referred to in the second proviso of section 115A | 10% |
| 195 | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy | 10% |
| 195 | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy If the agreement for such royalty payment is entered in between 31st March 1961 and 1st April 1976 | 50% |
| 195 | Income from royalty payable by government or Indian concern in pursuance of an agreement on matters included in the industrial policy If the agreement for such royalty payment is entered after 31st March 1976 | 10% |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy | 10% |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy If the agreement for such payment is entered in between 29th February 1964 and 1st April 1976 | 50% |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy If the agreement for such payment is entered after 31st March 1976 | 10% |
| 195 | Any other income | 30% |
| 195 | Any other income | 40% |
| 196B | Income (including LTCG) from units of an offshore fund | 10% |
| 196C | Income (including LTCG) from foreign currency bonds or GDR of an Indian company | 10% |
| 196D | Income (excluding dividend and capital gain) from Foreign Institutional Investors. | 20% |
| 206AB | Payment to non-filers, i.e. those who have not filed their income tax return in the last year Budget 2023: Non filers do not include: – People who are not required to file their ITRs – NRs who do not have a PE in India | – 2 times the rate given in the Income Tax Act or Finance Act or – 5%, whichever is higher |
| 206AA | TDS rate in case of Non availability of PAN | Rates specified above or 20%, whichever is higher |