TDS and TCS: Complete Guide for India (2025-26) — Rates, Due Dates & Compliance
A complete reference guide for TDS and TCS in India covering all major sections, rates for FY 2025-26, deduction thresholds, deposit deadlines, and return filing requirements.
What is TDS and Who Must Deduct?
TDS (Tax Deducted at Source) is a mechanism where the payer deducts tax at source before making payment and deposits it with the government. The deductor must have a TAN (Tax Deduction Account Number) from the Income Tax Department. Non-deduction or late deposit attracts interest at 1.5% per month and a penalty equal to the amount not deducted.
Key TDS Sections and Rates (FY 2025-26)
The major TDS sections cover salary, professional fees, contractor payments, rent, and more. Each section has a specific threshold (below which TDS is not required) and a rate.
| Section | Payment Type | TDS Rate | Threshold |
|---|---|---|---|
| 192 | Salary | Slab rate | Above basic exemption |
| 192A | Premature EPF withdrawal | 10% | ₹50,000 |
| 193 | Interest on securities | 10% | ₹10,000 (varies) |
| 194 | Dividend | 10% | ₹5,000 |
| 194A | Bank FD interest / Interest from others | 10% / 10% | ₹50,000 senior / ₹40,000 others |
| 194C | Payment to contractors | 1% (individuals) / 2% (companies) | ₹30,000 per contract / ₹1L annually |
| 194H | Commission or brokerage | 5% | ₹20,000 |
| 194I | Rent (land/building) | 10% | ₹50,000 per month |
| 194J | Professional / technical fees | 10% | ₹30,000 |
| 194Q | Purchase of goods | 0.1% | Turnover > ₹10 crore, purchase > ₹50L |
| 195 | Payment to non-residents | Rates vary by DTAA/type | No threshold |
| 206C(1H) | TCS on sale of goods | 0.1% | Sale receipt > ₹50L |
TDS Deposit Due Dates
TDS deducted in a month must generally be deposited by the 7th of the following month. Exception: TDS for March (the last month of the financial year) must be deposited by April 30. Use Challan ITNS 281 for TDS deposit via net banking or NEFT.
TDS Return Filing Deadlines
TDS returns (Form 24Q for salary, Form 26Q for non-salary, Form 27Q for non-residents) must be filed quarterly. Q1 (Apr-Jun): July 31. Q2 (Jul-Sep): October 31. Q3 (Oct-Dec): January 31. Q4 (Jan-Mar): May 31.
TCS: When the Seller Collects Tax
TCS (Tax Collected at Source) is collected by the seller from the buyer at the time of sale of certain specified goods or services. Under Section 206C(1H), sellers with turnover above ₹10 crore must collect TCS at 0.1% on sale consideration above ₹50 lakh from each buyer. Under Section 206C(1G), TCS applies on foreign remittances under LRS above ₹7 lakh at 20% (or 5% for education/medical).
Need expert help applying this to your situation?
Our CA team reviews your numbers and gives you a clear answer — usually within hours.
WhatsApp our CA