TaxItEazy Team
July 17, 2025
5 min read
The Union Budget 2025 has introduced significant changes to TDS provisions effective from 1st April 2025. This comprehensive guide covers the updated TDS rate chart for FY 2025-26, including revised threshold limits, new Section 194T for partner remuneration, and removal of higher TDS for non-filers.
Key TDS Changes from April 2025
Budget 2025 has revised TDS rates and exemption limits to reduce compliance burdens:
| Section |
Nature of Payment |
Old Threshold |
New Threshold |
TDS Rate |
| 194A | Bank Interest | ₹40,000 | ₹50,000 | 10% |
| 194-I | Rent | ₹2.4L/year | ₹50,000/month | 10% |
| 194J | Professional Fees | ₹30,000 | ₹50,000 | 10% |
| 194D | Insurance Commission | ₹15,000 | ₹20,000 | 10% |
| 194B | Lottery Winnings | ₹10K (aggregate) | ₹10K (per transaction) | 30% |
Important: Section 206AB (higher TDS for non-filers) has been removed from 1st April 2025.
TDS Rates for Residents (FY 2025-26)
Salary & Investments
| Section |
Payment Type |
Threshold |
TDS Rate |
| 192 | Salary | As per slab | Slab Rate |
| 194A | Bank Interest | ₹50K (₹1L seniors) | 10% |
| 194K | Mutual Fund Income | ₹10,000 | 10% |
| 194DA | Insurance Payout | ₹1 lakh | 2% |
Property & Services
| 194-I | Rent (Land/Building) | ₹50K/month | 10% |
| 194-IA | Property Purchase | ₹50L | 1% |
| 194J | Professional Fees | ₹50,000 | 10% |
| 194O | E-commerce | ₹5L | 0.1% |
TDS Rates for Non-Residents (FY 2025-26)
| Section |
Payment Type |
TDS Rate |
| 194E | Sportsmen/Entertainers | 20% |
| 194LB | Infrastructure Debt Fund | 5% |
| 195 | Royalties/Technical Fees | 10-30% |
| 196D | FII Income | 20% |
TDS Rates for Companies (FY 2025-26)
Domestic Companies
| 194 | Dividend | 10% |
| 194C | Contractor Payments | 1-2% |
Foreign Companies
| 195 | Royalties | 20% |
| 196B | Offshore Fund Units | 10-12.5% |
New Section 194T - TDS on Partner's Remuneration
From 1st April 2025, partnership firms and LLPs must deduct TDS at 10% on payments to partners exceeding ₹20,000 annually. This includes:
- Salary/remuneration to partners
- Interest on capital
- Commission/bonus payments
Note: No TDS if total payments ≤ ₹20,000 in a financial year.
FAQs
10% if rent exceeds ₹50,000/month (earlier ₹2.4L/year).
No, Section 206C(1H) has been removed from 1st April 2025.
30% under Section 194BA with no threshold limit.
Conclusion
The TDS changes from Budget 2025 aim to simplify compliance while ensuring tax efficiency. Key takeaways include higher exemption limits, removal of Section 206AB, and new TDS on partner payments. Always verify deductions using Form 26AS and consult a tax expert for complex cases.
