Complete TDS Compliance Guide – Sections, Rates, Due Dates, Interest & Penalties (FY 2025-26)
Tax Deducted at Source (TDS) is a mechanism under the Income Tax Act, 1961 requiring tax deduction at the time of payment and deposit with the Government within prescribed timelines.
Purpose of TDS
- Continuous tax collection
- Prevent tax evasion
- Widen tax base
- Track financial transactions
- Reduce year-end tax burden
Major TDS Sections – Threshold & Rates (FY 2025-26)
| Section |
Nature of Payment |
Threshold |
Rate |
| 192 |
Salary |
Basic exemption |
As per slab |
| 192A |
PF withdrawal |
₹50,000 |
10% |
| 193 |
Interest on securities |
₹10,000 |
10% |
| 194 |
Dividend |
₹10,000 |
10% |
| 194A |
Interest (other than securities) |
₹1,00,000 (SC) ₹50,000 (Others) ₹10,000 (Others) |
10% |
| 194B |
Lottery winnings |
₹10,000 |
30% |
| 194BB |
Horse race winnings |
₹10,000 |
30% |
| 194C |
Contractor |
₹30,000 single ₹1,00,000 aggregate |
1% / 2% |
| 194D |
Insurance commission |
₹15,000 |
5% |
| 194DA |
Insurance maturity |
₹1,00,000 |
5% (income portion) |
| 194H |
Commission |
₹20,000 |
2% |
| 194I |
Rent (Plant) |
₹50,000 per month |
2% |
| 194I |
Rent (Land/Building) |
₹50,000 per month |
10% |
| 194IA |
Property purchase |
₹50 Lakhs |
1% |
| 194IB |
Rent by Individual |
₹50,000 per month |
5% |
| 194J |
Professional |
₹50,000 |
10% |
| 194J |
Technical |
₹50,000 |
2% |
| 194K |
Mutual Fund income |
₹5,000 |
10% |
| 194LA |
Land compensation |
₹2,50,000 |
10% |
| 194M |
Specified payments by Individual/HUF |
₹50,00,000 |
2% |
| 194N |
Cash withdrawal |
₹1 Cr / ₹20L |
2% / 5% |
| 194O |
E-commerce |
₹5,00,000 |
1% |
| 194Q |
Purchase of goods |
₹50 Lakhs |
0.1% |
| 194R |
Benefit/perquisite |
₹20,000 |
10% |
| 194S |
Virtual Digital Assets |
₹50,000 / ₹10,000 |
1% |
| 195 |
Non-resident payments |
No limit |
As per Act/DTAA |
TDS Payment Due Dates
| Period |
Due Date |
| April – February |
7th of next month |
| March |
30th April |
Quarterly TDS Return Due Dates
| Quarter |
Period |
Due Date |
| Q1 |
Apr – Jun |
31st July |
| Q2 |
Jul – Sep |
31st October |
| Q3 |
Oct – Dec |
31st January |
| Q4 |
Jan – Mar |
31st May |
Return Forms
24Q – Salary26Q – Domestic27Q – Non-Resident27EQ – TCS
TDS Certificate Due Dates
| Form |
Nature |
Due Date |
| Form 16 |
Salary |
15th June |
| Form 16A |
Non-Salary |
Within 15 days from return due date |
| Form 16B |
Property |
15 days from 26QB |
| Form 16C |
Rent |
15 days from 26QC |
| Form 16D |
194M |
15 days from 26QD |
Interest on Late Compliance (Section 201(1A))
| Default |
Interest |
| Non-deduction |
1% per month |
| Deducted but not deposited |
1.5% per month |
Late Fee (Section 234E)
- ₹200 per day
- Maximum = TDS amount
Penalty (Section 271H)
- ₹10,000 to ₹1,00,000
- For non-filing or incorrect filing
Disallowance of Expense (Section 40(a)(ia))
- 30% of expense disallowed
- If TDS not deducted/deposited
Higher TDS Provisions
Section 206AA (No PAN)
Section 206AB (Specified Non-Filer)
Higher of:
- Twice specified rate
- 5%
- Rate in force
Prosecution (Section 276B)
- 3 months to 7 years imprisonment
- Along with fine
Challan Details
ITNS 281 – For TDS payment- Payment via Income Tax portal
Complete Compliance Checklist
- Deduct correct TDS
- Deposit by due date
- File quarterly return
- Issue certificates
- Reconcile with 26AS/AIS
- Monitor interest & penalties
Conclusion
TDS compliance involves timely deduction, deposit, return filing, certificate issuance, and monitoring statutory provisions. Proper compliance prevents financial loss, penalties, disallowance of expenses, and prosecution.
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