TDS Rate Chart for FY 2025-26

Your Complete Guide to TDS Compliance

Tax Deducted at Source (TDS) is one of the most important tools used by the Income Tax Department to ensure steady collection of tax revenue. Under the TDS mechanism, tax is deducted at the time of making certain payments such as salary, rent, professional fees, commission, interest, etc. If you are a business owner, employer, or individual responsible for deducting TDS, it's essential to stay updated with the TDS rates applicable for Financial Year (FY) 2025-26.

This blog provides the latest TDS rate chart and simplifies key TDS rules for easy compliance in FY 2025–26.

🔍 What is TDS?

TDS (Tax Deducted at Source) is a system where the payer deducts a specified percentage of tax before making certain payments, and deposits the same with the government. The payee then receives the net amount and can claim the TDS amount as tax credit while filing their income tax return.

📋 TDS Rate Chart for FY 2025-26 (AY 2026-27)

🔔 Note: If PAN is not furnished by the deductee, TDS must be deducted at 20% or higher under Section 206AA.

📌 Important Compliance Requirements

• TAN (Tax Deduction Account Number): Required to deduct and deposit TDS.

• Deposit Deadlines: TDS deducted must be deposited by the 7th of the next month. For March deductions, due date is 30th April.

• TDS Return Filing:

  • Form 24Q for salary

  • Form 26Q for non-salary domestic payments

  • Form 27Q for non-resident payments
    Returns are filed quarterly (Q1: April–June, Q2: July–September, etc.)

💡 Tips for Hassle-Free TDS Compliance

1. Verify PANs of all payees before deducting TDS.

2. Use TRACES (https://contents.tdscpc.gov.in/) for downloading Form 16/16A and checking TDS credit.

3. Reconcile 26AS statements regularly to ensure TDS credits are correctly reflected.

4. Avoid late deduction/deposit penalties (1% per month for late deduction, 1.5% for late deposit).

5. File TDS returns on time to avoid late fees under Section 234E (₹200 per day).

🚫 Penalties for TDS Non-Compliance

• Late filing of return: ₹200 per day under Section 234E

• Late deduction/deposit: Interest @1%/1.5% per month

• Failure to deduct: Treated as assessee in default; liable to pay the entire tax with interest and penalty

Frequently Asked Questions