TDS rates are the percentages at which tax is deducted from various types of payments made to individuals or entities.
The concept of TDS was introduced with an aim to collect tax from the source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct TDS and remit the same into the account of the Central Government.
There are various provisions of Tax Deduction at Source with different thresholds and multiple rates between 0.1%, 1%, 2%, 5%, 10%, 20%, 30% and above.
To make tax compliance easy and improve ease of doing business, the government planned to reduce some TDS rates.
Reduced TDS Rates Applicable from 1st Oct 2024
| Section | Present TDS Rate | Proposed TDS Rate |
| Section 194D – Payment of insurance commission (in case of person other than company) | 5% | 2% w.e.f. 1-4-2025 |
| Section 194DA – Payment in respect of life insurance policy | 5% | 2% w.e.f. 1-10-2024 |
| Section 194G – Commission etc on sale of lottery tickets | 5% | 2% w.e.f. 1-10-2024 |
| Section 194H – Payment of commission or brokerage | 5% | 2% w.e.f. 1-10-2024 |
| Section 194-IB – Payment of rent by certain individuals or HUF | 5% | 2% w.e.f. 1-10-2024 |
| Section 194M – Payment of certain sums by certain individuals or Hindu undivided family | 5% | 2% w.e.f. 1-10-2024 |
| Section 194-O – Payment of certain sums by e-commerce operator to e-commerce participant | 1% | 0.1% w.e.f. 1-10-2024 |
| Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India | Proposed to be omitted | Proposed to be omitted w.e.f. 1-10-2024 |
However, there will be no changes in certain sections. The unchanged TDS rates include:
- Salary
- Virtual digital assets
- Winnings from lottery, etc.
- Race horses
- Payments related to the transfer of immovable property
- Payments to non-residents
- Contracts
These specific sections will continue to maintain with their current rates.
TDS Certificate
TDS certificates are to be issued by a person deducting TDS to the assessee from whose TDS was deducted while making payment.
Different types of Certificate
| Certificate | Filling | Due date |
| Form 16 TDS on salary payment | Yearly | 31st May |
| Form 16A TDS on non salary payments | Quarterly | 15 days from the due date of filling return |
| Form 16B TDS on sale of property | Every Transaction | 15 days from the due date of filling return |
| Form 16C TDS on rent | Every Transaction | 15 days from the due date of filling return |
TDS Return Forms
| Form | Particulars | Due Dates |
| Form 24Q | Quarterly statement for tax deducted at source from “Salaries” | Q1 – 31st Jul Q2 – 31st Oct Q3 – 31st Jan Q4 – 31st May |
| Form 26Q | Quarterly statement of tax deducted at source in respect of all payments other than “Salaries” | Q1 – 31st Jul Q2 – 31st Oct Q3 – 31st Jan Q4 – 31st May |
| Form 26QB | Challan cum statement of deduction of tax u/s 194-IA | 30 days from the end of the month in which TDS is deducted |
| Form 26QC | Challan cum statement of deduction of tax u/s 194-IB | 30 days from the end of the month in which TDS is deducted |
| Form 27Q | Quarterly statement of deduction of tax from interest, dividend or any other sum payable to non-residents | Q1 – 31st Jul Q2 – 31st Oct Q3 – 31st Jan Q4 – 31st May |
| Form 27EQ | Quarterly statement of collection of tax at source (TCS) | Q1 – 31st Jul Q2 – 31st Oct Q3 – 31st Jan Q4 – 31st May |
TDS Rate Chart for FY 2024-25 (AY 2025-26) Click Here
FAQs
The Finance Bill, 2024 proposes to reduce the TDS rate from 5% to 2%.
It will came into effect from 1st October 2024
The reduction in TDS is to simplify tax compliance and reduce the burden on taxpayers and businesses.