TDS and TCS under Income Tax Act, 2025 (Effective from 1st April 2026) – Tabular Guide
The Income Tax Act, 2025 introduces a reorganized and simplified framework for TDS (Tax Deducted at Source) and TCS (Tax Collected at Source). Below is a clear tabular presentation for quick understanding and practical application.
1. TDS on Salary – Section 392
| Particulars | Applicable To | Rate | Threshold | Form |
|---|---|---|---|---|
| Salary Income | Govt. & Non-Govt. Employees | Slab Rate | Basic exemption limit | Form 138 |
2. TDS on Non-Salary Payments (Residents) – Section 393
(A) Commission & Brokerage
| Nature of Payment | Rate | Threshold | Form |
|---|---|---|---|
| Insurance Commission | 2% | ₹20,000 p.a. | 140 |
| Commission/Brokerage | 2% | ₹20,000 p.a. | 140 |
(B) Rent
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Plant & Machinery | 2% | No limit | 140 |
| Land/Building/Furniture | 10% | ₹50,000/month | 140 |
| Individual/HUF (Non-Audit) | 2% | ₹50,000/month | 141 |
(C) Property Transactions
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Purchase of Immovable Property | 1% | ₹50 Lakh | 141 |
(D) Interest
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Interest on Securities | 10% | ₹10,000 | 140 |
| Bank Interest (Senior Citizen) | 10% | ₹1,00,000 | 140 |
| Bank Interest (Others) | 10% | ₹50,000 | 140 |
(E) Contract Payments
| Payee Type | Rate | Threshold | Form |
|---|---|---|---|
| Individual/HUF | 1% | ₹30,000 / ₹1,00,000 | 140 |
| Others | 2% | ₹30,000 / ₹1,00,000 | 140 |
(F) Payments by Individual/HUF (Non-Audit)
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Contractor/Professional/Commission | 2% | ₹50 Lakh p.a. | 141 |
(G) Professional & Technical Services
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Technical Services / Royalty | 2% | ₹50,000 | 140 |
| Professional Services | 10% | ₹50,000 | 140 |
| Director Remuneration | 10% | No limit | 140 |
(H) Other Key Payments
| Nature | Rate | Threshold | Form | |
|---|---|---|---|---|
| Dividend | 10% | No limit | 140 | |
| Purchase of Goods | 0.1% | ₹50 Lakh | 140 | |
| Business Perquisite (Cash/Kind) | 10% | ₹20,000 | 140 | |
| E-commerce Transactions | 0.1% | No limit* | 140 |
*No TDS if payment ≤ ₹5 lakh to Individual/HUF (with PAN/Aadhaar)
3. TDS on Non-Residents – Section 393(2)
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Income of Non-Residents | Act/DTAA Rate | No limit | 144 |
| Sportsman/Entertainer | Act/DTAA Rate | No limit | 144 |
4. Payment to Partners
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Salary/Interest/Commission to Partner | 10% | ₹20,000 | 140/144 |
5. TCS Provisions – Section 394
(A) Traditional Goods
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Liquor, Timber, Scrap, Minerals etc. | 2% | Every Sale | 143 |
(B) Motor Vehicles & Luxury Goods
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Motor Vehicle | 1% | ₹10 Lakh | 143 |
| Wrist Watch, Art, Collectibles | 1% | ₹10 Lakh | 143 |
| Luxury Items (bags, shoes, sunglasses etc.) | 1% | ₹10 Lakh | 143 |
| Yacht, Helicopter, Sports Equipment | 1% | ₹10 Lakh | 143 |
(C) LRS Remittances
| Purpose | Rate | Threshold | Form |
|---|---|---|---|
| Education/Medical | 2% | ₹10 Lakh | 143 |
| Other Purposes | 20% | As applicable | 143 |
(D) Overseas Tour Package
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Tour Package | As Prescribed | As applicable | 143 |
(E) Business Usage
| Nature | Rate | Threshold | Form |
|---|---|---|---|
| Parking, Toll Plaza, Mining | 2% | Every Collection | 143 |
6. Key Highlights at a Glance
| Particulars | Change |
|---|---|
| New Sections | 392–394 introduced |
| Forms | Standardized (138–144) |
| TCS Scope | Luxury goods expanded |
| Compliance | More structured & clear |
| Digital Coverage | E-commerce & benefits included |
Conclusion
The tabular structure clearly reflects that the Income Tax Act, 2025 focuses on simplification with wider coverage. While compliance becomes easier to understand, tracking thresholds and applicability remains critical.
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