TDS & TCS Rates Effective from April 1, 2025 – A Complete Guide
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are essential mechanisms in India’s taxation system. The government periodically revises these rates to ensure better tax compliance and streamline collections.
With effect from April 1, 2025, several changes have been made to the TDS and TCS structure, affecting various transactions such as interest income, rent, professional services, cryptocurrency transactions, and foreign remittances.
📌 Key TDS Rate Changes (FY 2025-26)
| Section | Nature of Payment | Threshold Limit (₹) | TDS Rate (%) |
|---|---|---|---|
| 194A | Interest (Banks/Post Office - Senior Citizens) | 1,00,000 | 10% |
| 194A | Interest (Others) | 50,000 | 10% |
| 194DA | Life Insurance Payouts | 2,50,000 | 5% |
| 194H | Commission or Brokerage | 20,000 | 5% |
| 194I | Rent (Land/Building) | 50,000/month | 10% |
| 194I | Rent (Plant & Machinery) | 50,000/month | 2% |
| 194J | Professional/Technical Fees | 50,000 | 10% |
| 194S | Cryptocurrency/NFT Transactions | No Limit | 1% |
| 194B | Lottery Winnings | 10,000 per transaction | 30% |
| 194BB | Winnings from Horse Races | 10,000 | 30% |
| 194C | Payment to Contractors | 1,00,000 (Aggregate) | 1% (Ind.), 2% (Other) |
💡 What’s New?
✅ Higher Thresholds for TDS on Interest Income: Limits increased for senior citizens to ₹1,00,000 and for others to ₹50,000.
✅ Crypto & NFTs: 1% TDS continues for digital assets.
✅ Joint Property Purchases: Each owner must furnish PAN details to avoid 20% TDS deduction.
📌 Key TCS Rate Changes (FY 2025-26)
| Section | Nature of Transaction | Threshold Limit (₹) | TCS Rate (%) |
|---|---|---|---|
| 206C(1G) | Foreign Remittance under LRS (except education/medical) | 10,00,000 | 22% |
| 206C(1G) | Overseas Tour Packages | 10,00,000 | 20% |
| 206C(1G) | Remittance under LRS for Education (Loan Financed) | 10,00,000 | Exempt |
| 206C(1) | Timber and Forest Produce (under a forest lease) | No Change | 2% (Earlier 2.5%) |
💡 What’s New?
✅ Higher Limits for Foreign Remittance & Travel: Now ₹10,00,000, reducing the burden on small remittances.
✅ Reduced TCS on Timber & Forest Produce: Lowered from 2.5% to 2%.
🔍 Impact of These Changes
1️⃣ Higher Savings for Small Taxpayers
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Senior citizens benefit from higher interest income exemption.
-
Freelancers now have a lower TDS burden with a ₹50,000 threshold.
2️⃣ More Compliance for Online Sellers & Property Buyers
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E-commerce sellers face stricter TDS deductions.
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Joint property buyers must submit PAN to avoid high deductions.
3️⃣ Stronger Crypto Taxation
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1% TDS on crypto transactions stays, ensuring tax tracking.
🛠️ How to Stay Compliant?
✔ Verify PAN/Aadhaar Details: Avoid higher TDS/TCS rates due to missing PAN.
✔ Ensure Proper Tax Filing: Incorrect TDS claims may lead to notices & penalties.
✔ Keep Track of Threshold Limits: Plan your transactions to minimize tax liability.
📢 Final Thoughts
The TDS & TCS changes from April 1, 2025, are aimed at better tax collection and compliance. While higher thresholds benefit taxpayers, crypto traders, online sellers, and frequent foreign travelers must be cautious.
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About the Author
Editor is a contributor at Filebob, writing on Income Tax and related topics. View all posts by this author.
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Source: Taxopedia – reproduced intact for educational reference.
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