TDS Guide: Rates, Thresholds & Due Dates
What TDS is, the common sections and rates, deposit and return due dates, TDS certificates, and the move to Numeric Payment Codes under the Income Tax Act 2025.
Written by CA Gaurav Singh, Chartered Accountant (ICAI Membership No. 539050) · Last updated: 13 July 2026
Note: Indicative rates and dates for FY 2025-26 / FY 2026-27. Specific rates, thresholds and PAN-related provisions should be verified against the current law; this is not a substitute for professional advice.
Tax Deducted at Source (TDS) is where a great deal of routine tax compliance happens — and where avoidable errors are common. A business that pays salaries, contractors, professionals or rent is usually a deductor, responsible for withholding tax, depositing it on time, filing returns and issuing certificates. This guide sets out the essentials.
Common TDS sections and rates
| Section | Payment | Indicative rate |
|---|---|---|
| 192 | Salary | At slab rates |
| 194C | Payment to contractors | 1% (individual/HUF), 2% (others) |
| 194J | Professional / technical fees | 10% (2% for technical services) |
| 194I | Rent | 2% (plant/machinery), 10% (land/building) |
| 194H | Commission / brokerage | As prescribed |
| 194A | Interest (other than securities) | As prescribed |
Each section has a threshold below which no deduction is required, and a higher rate applies where the recipient has not furnished a valid PAN.
Deposit and return due dates
- Deposit: by the 7th of the following month (TDS for March by 30 April).
- Quarterly returns: Form 24Q (salary) and Form 26Q (non-salary), generally by the 31st of the month after the quarter, with the last quarter allowed until 31 May.
- Certificates: Form 16 (salary, annual) and Form 16A (non-salary, quarterly), issued after the returns are processed.
Interest, late fee and penalty
Late deduction attracts interest at 1% per month; late deposit attracts 1.5% per month. Late filing of the return attracts a fee under Section 234E of Rs 200 per day (capped at the TDS amount), and a separate penalty under Section 271H may apply for non-filing or incorrect filing.
The Income Tax Act 2025 transition
From Tax Year 2026-27 (income on or after 1 April 2026), salary TDS moves from Section 192 to Section 392, and the various non-salary TDS provisions consolidate into Section 393 using Numeric Payment Codes. Deductions and returns for FY 2025-26 continue under the 1961 Act. The complete section and form mapping is set out in our Income Tax Act 2025 transition guide.
Frequently Asked Questions
What is TDS?
Tax Deducted at Source (TDS) is a mechanism by which tax is collected at the point of certain payments. The payer deducts a prescribed percentage before paying the recipient and deposits it with the government against the recipient PAN, where it appears as a credit in Form 26AS and the Annual Information Statement.
What are common TDS sections and rates?
Common examples are salary (Section 192, at slab rates), payments to contractors (Section 194C, 1% or 2%), professional or technical fees (Section 194J, 10% or 2%), rent (Section 194I, 2% or 10%), commission (Section 194H) and interest (Section 194A). Each section has its own threshold below which no deduction is required.
What is the due date for depositing TDS?
TDS deducted during a month must generally be deposited by the 7th of the following month. TDS deducted in March is allowed until 30 April. Late deposit attracts interest at 1.5% per month from the date of deduction to the date of payment.
When are TDS returns filed?
TDS returns are filed quarterly — Form 24Q for salary and Form 26Q for most non-salary payments. They are generally due by the 31st of the month following the quarter (with the last quarter allowed until 31 May). Late filing attracts a fee under Section 234E of Rs 200 per day.
What are TDS certificates?
After filing returns, the deductor issues TDS certificates — Form 16 for salary and Form 16A for non-salary payments — which the recipient uses while filing the income-tax return. Under the Income Tax Act 2025 framework, form references are being updated.
How does the Income Tax Act 2025 change TDS?
Under the Income Tax Act, 2025 (effective from Tax Year 2026-27), salary TDS moves from Section 192 to Section 392, and the various non-salary TDS provisions are consolidated into Section 393 using Numeric Payment Codes. FY 2025-26 deductions and returns continue under the 1961 Act. See our Income Tax Act 2025 transition reference for the full mapping.