The TDS and TCS rate chart for FY 2024-25 is essential for taxpayers, businesses, and professionals to ensure proper tax compliance in India. The government has updated Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rates, thresholds, and provisions for Financial Year 2024-25, corresponding to Assessment Year 2025-26.
This comprehensive guide explains the latest TDS and TCS rates as notified by the Income Tax Department, including important changes introduced in Budget 2025 that impact millions of Indian taxpayers and simplify compliance significantly.
Understanding Tax Deducted at Source (TDS)
Tax Deducted at Source (TDS) is a mechanism where tax is deducted by the payer at the time of making specified payments such as salary, interest, rent, commission, professional fees, and contractor payments. The deducted amount is deposited with the government on behalf of the recipient.
TDS ensures regular tax collection throughout the financial year and reduces tax evasion. Recipients can claim credit for TDS deducted when filing their Income Tax Return, and excess TDS is refunded by the department.
What is Tax Collected at Source (TCS)
Tax Collected at Source (TCS) is tax collected by the seller while receiving payment for specified goods or services from the buyer. TCS applies to transactions involving scrap, alcohol, motor vehicles, foreign remittances under Liberalised Remittance Scheme (LRS), and tour packages.
The seller collects this tax from the buyer and deposits it with the government. Like TDS, TCS can be claimed as credit when filing ITR, ensuring no double taxation occurs.
Complete TDS Rate Chart FY 2024-25 (AY 2025-26)
Below is the comprehensive TDS rate chart applicable for Financial Year 2024-25 as per official Income Tax Department notifications:
| Section | Nature of Payment | Threshold Limit | TDS Rate (Individual/HUF) | TDS Rate (Others) |
|---|---|---|---|---|
| 192 | Salary | As per slab | Slab rate | Slab rate |
| 192A | Premature EPF withdrawal | ₹50,000 | 10% | 10% |
| 193 | Interest on securities | ₹10,000 | 10% | 10% |
| 194 | Dividend | ₹5,000 | 10% | 10% |
| 194A | Interest - Bank/Post Office | ₹40,000 | 10% | 10% |
| 194A | Interest - Senior Citizen | ₹50,000 | 10% | - |
| 194A | Interest - Others | ₹5,000 | 10% | 10% |
| 194B | Lottery winnings | ₹10,000 | 30% | 30% |
| 194BA | Online gaming winnings | No limit | 30% | 30% |
| 194BB | Horse race winnings | ₹10,000 | 30% | 30% |
| 194C | Contractor (single payment) | ₹30,000 | 1% | 2% |
| 194C | Contractor (annual aggregate) | ₹1,00,000 | 1% | 2% |
| 194D | Insurance commission | ₹15,000 | 5% | 10% |
| 194DA | Life insurance payout | ₹1,00,000 | 5% | 5% |
| 194H | Commission/Brokerage | ₹15,000 | 5% | 5% |
| 194I (a) | Rent - Plant & Machinery | ₹2,40,000 | 2% | 2% |
| 194I (b) | Rent - Land/Building/Furniture | ₹2,40,000 | 10% | 10% |
| 194IA | Purchase of immovable property | ₹50,00,000 | 1% | 1% |
| 194IB | Rent by Individual/HUF | ₹50,000 per month | 5% | - |
| 194J (a) | Technical services/Royalty | ₹30,000 | 2% | 2% |
| 194J (b) | Professional services | ₹30,000 | 10% | 10% |
| 194M | Payment by Individual/HUF (exceeding ₹50 lakh turnover) | ₹50,00,000 | 5% | - |
| 194N | Cash withdrawal (exceeding ₹1 Crore) | ₹1,00,00,000 | 2% | 2% |
| 194O | E-commerce participant payment | ₹5,00,000 | 0.1% | 0.1% |
| 194Q | Purchase of goods (exceeding ₹50 lakh) | ₹50,00,000 | 0.1% | 0.1% |
| 194R | Business benefits/perquisites | ₹20,000 | 10% | 10% |
| 194S | Virtual Digital Assets (VDA) | ₹10,000/₹50,000 | 1% | 1% |
| 194T | Partner remuneration (Effective from April 1, 2025) | ₹20,000 | 10% | 10% |
All TDS rates are subject to applicable surcharge and Health & Education Cess of 4% on the total tax amount as per official rates notified by the Income Tax Department.
Budget 2025 Major Update: Sections 206AB and 206CCA Abolished
One of the most significant changes in Budget 2025 is the removal of Sections 206AB and 206CCA effective from April 1, 2025. These sections previously mandated higher TDS and TCS rates for non-filers of income tax returns.
Previously, if a person had not filed ITR for the last two years and had TDS or TCS of ₹50,000 or more per year, a higher rate was applicable—typically twice the specified rate or 5%, whichever was higher. This created significant compliance burden on deductors and collectors who had to verify ITR filing history before deducting tax.
The removal simplifies tax compliance dramatically and eases the burden on businesses, as they no longer need to verify ITR filing history before deducting or collecting tax, streamlining operations considerably.
New Section 194T: TDS on Partner Remuneration
Section 194T has been introduced effective from April 1, 2025, mandating TDS deduction on payments made to partners of a firm. The provision applies to salary, remuneration, commission, bonus, or interest paid to partners.
The TDS rate is 10% and applies when aggregate payments exceed ₹20,000 during the financial year. This new provision aims to bring transparency to partnership firm transactions and ensure proper tax compliance.
Higher TDS Without PAN: Section 206AA
Under Section 206AA, if PAN is not provided by the recipient, TDS will be deducted at a much higher rate of 20% or the specified rate, whichever is higher. This provision continues to remain in effect for FY 2024-25.
It is mandatory to provide PAN details to avoid excessive tax deduction. Failure to do so results in higher upfront deduction, though excess tax can be claimed as refund while filing ITR.
TCS Rate Chart FY 2024-25 (AY 2025-26)
The following TCS rates apply for transactions under various sections for FY 2024-25:
| Section | Nature of Transaction | Threshold Limit | TCS Rate |
|---|---|---|---|
| 206C(1) | Scrap | As specified | 1% |
| 206C(1) | Alcoholic liquor for human consumption | As specified | 1% |
| 206C(1) | Tendu leaves | As specified | 5% |
| 206C(1) | Timber/forest produce (except tendu leaves) | As specified | 2.5% |
| 206C(1F) | Motor vehicle sale (exceeding ₹10 lakh) | ₹10,00,000 | 1% |
| 206C(1G) | LRS - Foreign tour packages | As applicable | 5% |
| 206C(1G) | LRS - Education (via education loan from specified institutions) | ₹10,00,000 per FY | 0.5% |
| 206C(1G) | LRS - Education/Medical (other sources) | ₹10,00,000 per FY | 5% |
| 206C(1G) | LRS - Other purposes (above threshold) | ₹10,00,000 per FY | 5% |
| 206C(1G) | LRS - Investment in overseas assets | ₹10,00,000 per FY | 20% |
| 206C(1G) | LRS - Without PAN | Applicable | Double rate or 5%, whichever is higher |
| 206C(1H) | Sale of goods (Removed from April 1, 2025) | ₹50,00,000 | 0.1% (till March 31, 2025) |
Budget 2025 has increased the threshold for TCS under Liberalised Remittance Scheme (LRS) from ₹7 lakh to ₹10 lakh, providing significant relief to individuals making foreign remittances for education, travel, and other purposes.
Key TDS and TCS Updates for FY 2024-25
- Section 206C(1H) abolished: TCS on sale of goods by sellers removed from April 1, 2025, significantly reducing compliance burden on businesses and eliminating dual TDS-TCS issues
- Section 206AB & 206CCA removed: Higher TDS/TCS rates for non-filers of ITR abolished from April 1, 2025, simplifying compliance for deductors
- LRS threshold increased: TCS applicable only on foreign remittances exceeding ₹10 lakh per financial year (previously ₹7 lakh)
- Section 194T introduced: New TDS of 10% on partner remuneration effective from April 1, 2025, with threshold of ₹20,000 per year
- Section 194LBC rate reduced: TDS on income from securitization trust reduced from 25%/30% to uniform 10% for all categories
- TDS on bank interest thresholds: Senior citizens continue to enjoy higher threshold of ₹50,000 compared to ₹40,000 for others under Section 194A
Related Articles from MoneyMinted.in:
Important TDS and TCS Compliance Points
TDS Certificate and Form 26AS
Deductors must issue TDS certificates (Form 16/16A) to recipients within prescribed timelines. Taxpayers should verify TDS credits in Form 26AS or the new Annual Information Statement (AIS) before filing ITR to avoid mismatches and refund delays.
Quarterly TDS Return Filing
Deductors must file quarterly TDS returns in Form 24Q, 26Q, 27Q, or 27EQ depending on the nature of payment. Late filing attracts penalties under Section 234E and interest under Section 201(1A).
Lower TDS Certificate (Form 15G/15H)
Taxpayers whose total income is below the taxable limit can submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens) to avoid TDS deduction on interest income from banks and post offices.
Frequently Asked Questions
Which financial year do these TDS and TCS rates apply to?
These rates apply to Financial Year 2024-25, which corresponds to Assessment Year 2025-26. The period covers transactions from April 1, 2024 to March 31, 2025.
Is TDS applicable even if my income is below the taxable limit?
Yes, TDS is deducted based on the payment type and threshold limit, not on your final tax liability. However, if no tax is payable after considering all deductions and exemptions, you can claim full refund while filing ITR.
Can I claim refund of excess TDS deducted?
Yes, excess TDS can be claimed as refund when filing your Income Tax Return. The TDS credit is reflected in Form 26AS and Annual Information Statement (AIS), which should be verified before filing ITR.
What happens if I don't provide PAN for TDS deduction?
If PAN is not provided, TDS will be deducted at 20% or the specified rate, whichever is higher, as per Section 206AA. This significantly increases the tax burden upfront, though excess can be claimed as refund.
Are senior citizens exempt from TDS on bank interest?
Senior citizens are not exempt from TDS, but they enjoy a higher threshold of ₹50,000 compared to ₹40,000 for others under Section 194A. They can also submit Form 15H to avoid TDS if total income is below taxable limit.
How is TDS different from advance tax?
TDS is deducted by the payer before making payment to the recipient, while advance tax is paid directly by the taxpayer in quarterly installments during the financial year. Both are credited to your tax liability when filing ITR.
What is the TCS rate on foreign remittances under LRS in FY 2024-25?
The TCS rate is 0.5% for education via loan, 5% for education/medical/travel, and 20% for overseas investments. The threshold has been increased to ₹10 lakh per financial year from April 1, 2025.
Key Takeaways
- TDS and TCS rate chart FY 2024-25 includes updated rates, thresholds, and significant Budget 2025 simplifications
- Sections 206AB and 206CCA abolished from April 1, 2025, removing higher rates for non-filers of ITR
- New Section 194T introduced for 10% TDS on partner remuneration exceeding ₹20,000 annually
- LRS threshold increased from ₹7 lakh to ₹10 lakh per financial year, benefiting students and travelers
- Section 206C(1H) removed, eliminating TCS on sale of goods and dual TDS-TCS complications
- Always provide PAN to avoid 20% higher TDS deduction under Section 206AA
- File ITR on time and verify Form 26AS/AIS to claim TDS credit and refunds without complications
Disclaimer
This article is for informational purposes only and does not constitute financial, tax, or legal advice. TDS and TCS provisions are subject to amendments, notifications, and judicial interpretations. Tax rates and thresholds mentioned are based on official Income Tax Department notifications and Budget 2025 proposals. Please consult a qualified Chartered Accountant or tax professional before making financial decisions based on this information.
For professional inquiries regarding MoneyMinted blog, contact us at contact@moneyminted.in
