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CA Vishnu Ram
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Asked: 2022-01-20T18:51:41+05:30 In:

What are the rate of TDS and threshold limit on various transactions?

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What are the rate of TDS and threshold limit on various transactions?
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      TDS Rates and Threshold Limits for FY 2025-26 TDS (Tax Deducted at Source) is applicable on various payments such as salary, rent, professional fees, and purchase of goods. Below is a simplified table showing applicable TDS rates and their threshold limits. Section Nature of Payment TDS Rate (%) ThrRead more

      TDS Rates and Threshold Limits for FY 2025-26

      TDS (Tax Deducted at Source) is applicable on various payments such as salary, rent, professional fees, and purchase of goods. Below is a simplified table showing applicable TDS rates and their threshold limits.

      Section Nature of Payment TDS Rate (%) Threshold Limit (₹) Remarks
      192 Salary As per slab rates Basic exemption limit TDS deducted as per applicable income tax slab rates.
      193 Interest on Securities 10 10,000 Threshold introduced; previously, there was no threshold.
      194 Dividend Payments 10 10,000 Threshold increased from ₹5,000 to ₹10,000.
      194A Interest other than on Securities 10 50,000 (General)
      1,00,000 (Senior Citizens)      		 Thresholds increased from ₹40,000 and ₹50,000 respectively.
      194C Payment to Contractors 1 (Individual/HUF)
      2 (Others)      		 30,000 (Single Payment)
      1,00,000 (Aggregate Annual)      		 No change in thresholds.
      194H Commission or Brokerage 5 15,000 No change in threshold.
      194I Rent 10 (Land/Building)
      2 (Plant/Machinery)      		 6,00,000 Threshold increased from ₹2,40,000 to ₹6,00,000.
      194J Professional Fees 10 50,000 Threshold increased from ₹30,000 to ₹50,000.
      194N Cash Withdrawals 2 1,00,00,000 No change in threshold.
      194Q Purchase of Goods 0.1 50,00,000 Applicable if buyer’s turnover exceeds ₹10 crore.
      206C(1H) Sale of Goods (TCS) 0.1 50,00,000 Applicable if seller’s turnover exceeds ₹10 crore.

      Key Points to Remember:

      ✅ If PAN is not provided, a higher TDS rate (usually 20%) is applicable.
      ✅ Some sections have lower TDS rates for certain payments made to individuals.
      ✅ TDS must be deducted at the time of payment or credit, whichever is earlier.

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