How Much TDS Is Deducted in India?
How Much TDS Is Deducted in India?
Updated TDS Rates for FY 2024–25 | A Complete Guide
TDS—or Tax Deducted at Source—is one of the most essential components of India’s taxation system. Whether you’re a salaried employee, freelancer, property buyer, or business owner, chances are you've encountered TDS being deducted from your income or payments.
But the common question is:
"How much TDS is deducted?"
The rate of TDS depends on the nature of the payment, who is receiving the payment, and the threshold limits prescribed by the Income Tax Act.
Let’s break it down in a simplified and updated format.
✅ What Is TDS?
TDS (Tax Deducted at Source) is the tax collected at the point of income generation. The person making the payment deducts a certain percentage of tax before paying the recipient and deposits it with the Income Tax Department.
✅ Factors That Affect TDS Deduction
The amount of TDS deducted depends on:
1. Type of income or payment
2. Recipient’s status (individual, company, NRI)
3. Whether PAN is provided
4. Threshold limits defined by the government
📘 Common TDS Rates for FY 2024–25
| Nature of Income / Payment | Section | Threshold Limit | TDS Rate |
| Salary | 192 | No fixed limit (based on slab) | As per the slab |
| Bank Interest (FD/RD/Savings) | 194A | ₹40,000 (₹50,000 for seniors) | 10% |
| Rent (land/building/furniture) | 194I | ₹2.4 lakh/year | 10% |
| Professional/Technical Fees | 194J | ₹30,000/year | 10% |
| Contractor Payment (Individual) | 194C | ₹30,000 (single) / ₹1 lakh (year) | 1% |
| Contractor Payment (Firm/Company) | 194C | Same as above | 2% |
| Commission or Brokerage | 194H | ₹15,000/year | 5% |
| Dividend Income | 194 | ₹5,000/year | 10% |
| Property Purchase | 194-IA | ₹50 lakh or more | 1% |
| Rent by Individual > ₹50K/month | 194-IB | ₹50,000/month | 5% |
| Cash Withdrawal | 194N | ₹1 crore/year (₹20 lakh for non-filers) | 2–5% |
| Crypto / Virtual Digital Assets | 194S | ₹10,000/year | 1% |
| Payment to NRIs | 195 | No threshold | Varies (10%–30%) |
📌 Key Points to Remember
• PAN must be furnished to deduct TDS at standard rates.
➤ If PAN is not available, TDS is deducted at a higher rate (usually 20%).
• TDS is deducted at the time of payment or credit, whichever is earlier.
• If total income is below the taxable limit, you can submit Form 15G/15H (for certain incomes like interest) to avoid TDS deduction.
🧾 Example: How TDS Is Deducted
Example 1: Freelancer Payment
• Payment = ₹50,000
• Section = 194J (Professional Fee)
• TDS = 10%
➡️ TDS deducted = ₹5,000
➡️ Net payment received = ₹45,000
Example 2: Property Purchase
• Buyer purchases a property worth ₹70 lakh
• TDS applicable = 1% on ₹70 lakh = ₹70,000
• Buyer must deduct and deposit this TDS before paying the seller
💡 Tip: Track TDS in Form 26AS & AIS
You can view your TDS details in:
• Form 26AS (Tax Credit Statement)
• AIS (Annual Information Statement)
This ensures all deductions are properly recorded against your PAN and available for claiming during ITR filing.
✅ Final Words
The amount of TDS deducted varies from 1% to 30%, depending on the nature of the transaction, threshold, and the recipient’s tax status.
Understanding how much TDS is deducted helps you:
• Avoid unnecessary tax outflows
• Plan your cash flow
• Claim accurate refunds while filing your income tax return
