How Much Income is Eligible for TDS Deduction in India?
How Much Is Eligible for TDS Deduction in India?
TDS Threshold Limits Explained for FY 2024–25 | AY 2025–26
If you’re a taxpayer receiving income from salary, interest, rent, professional fees, or property sale, you’ve probably come across the term TDS (Tax Deducted at Source).
But the common question is:
“At what income level does TDS become applicable?”
“What is the minimum amount for which TDS is deducted?”
Let’s break down the TDS threshold limits across different sections of the Income Tax Act.
✅ What Is a TDS Threshold Limit?
A TDS threshold limit is the minimum amount of payment at which TDS becomes applicable.
• If your income/payment is below the threshold, no TDS is deducted.
• If it exceeds the threshold, TDS is deducted on the entire amount or the excess, depending on the section.
📘 TDS Threshold Limits – Income-wise Summary (FY 2024–25)
| Nature of Payment | Section | Threshold Limit | TDS Rate |
| Salary | No threshold | based on the tax slab | Slab rate |
| Bank FD/Interest (Non-Bank) | 194A | ₹40,000 (₹50,000 for seniors) | 10% |
| Rent – Land/Building | 194I | ₹2,40,000/year | 10% |
| Rent – Plant/Machinery | 194I | ₹2,40,000/year | 2% |
| Professional Fees | 194J | ₹30,000/year | 10% |
| Contractor Payment | 194C | ₹30,000 (single) or ₹1,00,000 (aggregate) | 1%/2% |
| Commission/Brokerage | 194H | ₹15,000/year | 5% |
| Dividend (Non-individuals) | 194 | ₹5,000/year | 10% |
| Property Purchase | 194-IA | ₹50,00,000 | 1% |
| Cash Withdrawal | 194N | ₹1 crore (or ₹20 lakh if no ITR filed) | 2%/5% |
| E-commerce Seller Payments | 194-O | ₹5,00,000/year (for individuals) | 1% |
| Crypto/VDAs Transactions | 194S | ₹10,000 (for individuals) | 1% |
🔍 Examples for Better Understanding
Example 1: Interest on Fixed Deposit
• FD interest = ₹38,000
• No TDS, as it’s below ₹40,000 (₹50,000 for seniors)
Example 2: Rent Payment
• Annual rent = ₹3,00,000
• TDS @ 10% = ₹30,000 (since amount > ₹2.4L)
Example 3: Professional Fees
• Payment to freelancer = ₹35,000
• TDS @ 10% = ₹3,500 (since it exceeds ₹30,000 threshold)
🧠 What If TDS Is Deducted Below Threshold?
Sometimes, banks or clients deduct TDS even when you're under the limit due to:
• Missing PAN (TDS @ 20% by default)
• Not submitting Form 15G/15H (for exempt income)
💡 You can claim a refund of such TDS while filing your ITR.
Final Words
The amount eligible for TDS depends on the nature of income and its respective threshold under the Income Tax Act. Knowing these limits helps you:
• Avoid unnecessary deductions
• Plan your income receipts smartly
• File your ITR accurately and claim refunds where due
