TDS, an acronym for “Tax Deducted at Source,” is a mechanism the government employs to gather income tax upfront as you earn rather than waiting to file your annual tax return. As a small business owner, when you make certain payments like salaries, rent, or contractor fees, you must withhold a portion of the amount as TDS and remit it to the government.
TDS Rate Chart for FY 2024-25 (AY 2025-26)
| Section | Nature of Payment | Threshold | TDS Rate (with PAN) | TDS Rate (without PAN) |
|---|---|---|---|---|
| 194C | Payments to Contractors and Subcontractors, Advertising | Single payment > Rs. 30,000 or Aggregate > Rs. 1,00,000 | 1% (Individual/HUF) 2% (Others) | 5% (Individual/HUF) 20% (Others) |
| 194-I (a) | Rent on Land, Building, Furniture & Fittings | Rs. 2,40,000 per annum | 10% | 20% |
| 194-I (b) | Rent on Plant & Machinery | Rs. 2,40,000 per annum | 2% | 20% |
| 194J | Professional/Technical Fees | Rs. 30,000 | 10% | 20% |
| 194H | Commission/Brokerage (other than lottery) | Rs. 15,000 | 5% | 20% |
| 194Q | Payments for the purchase of goods | Rs. 50,00,000 | 0.1% | 5% |
| 192 | Salary | As per income tax slabs | Slab Rates | Slab Rates |
| 192A | Premature withdrawal of PF | Rs. 50,000 | 10% | 20% (Usually higher) |
| 193 | Interest on Securities | Bonds – 10,000 Other Securities – No Limit | 10% | 20% |
| 194 | Dividends | Rs. 5000 | 10% | 20% |
| 194A | Interest (other than on securities) | Rs. 40,000 Rs. 50,000 for senior citizens Rs. 5,000 from friends/relatives | 10% | 20% |
| 194B | Winnings from lottery, games, etc. | Rs. 10,000 | 30% | 30% |
| 194BA | Income from online games | Nil | 30% | 30% |
| 194BB | Winnings from horse races | Rs. 10,000 | 30% | 30% |
| 194D | Insurance Commission | Rs. 20,000 | Individuals – 5% Companies – 10% | 20% |
| 194E | Payment to non-resident sportsmen/sports association | No threshold | 20% | 20% |
| 194EE | Payments in respect of deposits under NSS | Rs. 2500 | 10% | 20% |
| 194F | Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund | No threshold | 20% | 20% |
| 194G | Commission/brokerage on lotteries | Rs. 15,000 | 5% | 20% |
| 194IA | Sale of Immovable Property | Rs. 50,00,000 | 1% | 20% |
| 194IB | Rent payment that is made by an individual or HUF not covered under payment 194I (No Business/No Audit Cases) | 50,000 per month | 5% | 20% |
| 194IC | Payment under Joint Development Agreements (JDA) to Individual/HUF | No threshold | 10% | 20% |
| 194K | Payment of dividends by mutual Funds | Rs. 5000 | 10% | 20% |
| 194LA | Compensation on acquisition of certain immovable property | Rs. 2,50,000 | 10% | 20% |
| 194M | Certain payments by Individuals/HUF where they are not liable to deduct TDS under Sections 194C, 194H, and 194J | Rs. 50,00,000 | 5% | 20% |
| 194N | In case cash withdrawal over a certain amount takes place from the bank | ITR Filers – Rs. 1 Crore ITR Non-Filers – Rs. 20,00,000 | 2% | 20% |
| 194-O | Amount paid for the sale of products/services by e-commerce service providers via their digital platform | Rs. 5,00,000 | 1% | 5% |
| 194R | Benefits/perquisites from business or profession | Rs. 20,000 | 10% | 20% |
| 194S | Payment for transfer of Virtual Digital Assets | Rs. 10,000 (specified person) Rs. 50,000 (others) | 1% | 1% |
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