TDS Rate Chart for FY 2025-26: Complete Guide to TDS on Rent, Interest, Property, and Other Income

Every time someone pays you rent, your bank credits FD interest, or a buyer purchases your property — TDS (Tax Deducted at Source) may apply. While most salaried employees are familiar with TDS on salary under Section 192, the TDS landscape extends far beyond your paycheck. There are over 30 sections in the Income Tax Act dealing with TDS on different types of non-salary income, each with its own rate and threshold.

This guide covers the TDS rates and thresholds that matter most for individual taxpayers in FY 2025-26 (AY 2026-27), including the updated limits from Budget 2025. Whether you're a landlord receiving rent, an investor earning interest, or someone selling property, you'll find exactly what applies to you.

How TDS Works on Non-Salary Income

TDS on salary is calculated at your slab rate by your employer. TDS on non-salary income works differently — it's deducted at flat prescribed rates by the payer, regardless of your actual tax bracket.

This creates two common problems:

1. Excess TDS — if your total income is below the taxable limit but TDS has been deducted at 10% or 20%, you've paid more tax than you owe
2. Under-reporting risk — if a payer didn't deduct TDS (because the amount was below the threshold), you still owe tax on that income

Understanding the rates and thresholds helps you plan around both issues.

Complete TDS Rate Chart for Non-Salary Income (FY 2025-26)

Here are the most relevant TDS sections for individual taxpayers:

Important: If you haven't provided your PAN to the payer, TDS is deducted at the higher of 20% or the prescribed rate under Section 206AA. Always share your PAN with banks, tenants, and other payers.

TDS on Bank Interest: Section 194A

This is the most common non-salary TDS that individuals encounter. Banks deduct TDS at 10% on interest from fixed deposits, recurring deposits, and other term deposits when the total interest in a financial year exceeds:

• Rs 50,000 for senior citizens (age 60+)
• Rs 40,000 for everyone else

These thresholds apply per bank (for banking companies) and per branch (for cooperative societies).

What Many People Miss

Banks deduct TDS on accrued interest, not just interest actually paid out. If you have a 5-year FD with cumulative interest, TDS is deducted each year on the interest accrued that year — even though you haven't received the money yet.

Example: Rajesh has FDs worth Rs 8,00,000 at 7.5% in his bank. His annual interest is Rs 60,000. The bank will deduct TDS of Rs 2,000 (10% on the Rs 20,000 exceeding the Rs 40,000 threshold). Wait — that's not how it works. TDS is on the entire interest amount once it crosses the threshold, not just the excess.

So the bank deducts 10% on Rs 60,000 = Rs 6,000 as TDS.

If Rajesh's total income is below Rs 7,00,000 (new regime) and he qualifies for the Section 87A rebate, he effectively owes zero tax. That Rs 6,000 TDS is refundable when he files his ITR.

TDS on Rent: Sections 194-I and 194-IB

Rent TDS has two separate sections depending on who the payer is:

Section 194-I: For Business/Professional Tenants

If a business or professional entity pays rent exceeding Rs 2,40,000 per year (raised from Rs 2,40,000 — this threshold was increased in Budget 2025), they must deduct TDS at:

• 2% for plant and machinery
• 10% for land, building, or furniture

Section 194-IB: For Individual/HUF Tenants

If you're an individual or HUF paying monthly rent exceeding Rs 50,000, you must deduct TDS at 5% from the rent — even if you are not subject to a tax audit.

This means if you're a salaried employee paying Rs 55,000/month rent, you're legally required to deduct Rs 2,750 per month as TDS and deposit it using Form 26QC on the income tax portal. You also need to issue a Form 16C (TDS certificate) to your landlord.

Practical Tip for Landlords

If you receive rent and your total income is below the taxable limit, the TDS deducted by your tenant is fully refundable. But you must file your ITR to claim it. Many landlords — especially senior citizens renting out a single property — lose refunds simply by not filing.

TDS on Property Purchase: Section 194-IA

When you buy immovable property (land, building, or flat) for more than Rs 50,00,000, you as the buyer must deduct TDS at 1% of the total sale consideration and deposit it with the government.

How to Comply

1. Use the income tax portal's Form 26QB to pay the TDS
2. You must do this within 30 days from the end of the month in which the deduction is made
3. Issue Form 16B to the seller as their TDS certificate

Example: Priya buys a flat for Rs 85,00,000. She must deduct 1% = Rs 85,000 as TDS. She pays Rs 84,15,000 to the seller and deposits Rs 85,000 via Form 26QB.

Multiple Buyers or Sellers?

If there are joint buyers, each buyer files a separate Form 26QB for their share. Similarly, if there are joint sellers, each seller's share needs a separate Form 26QB. This is a commonly missed compliance step — failure to deduct and deposit attracts interest at 1% per month and penalties.

TDS on Professional and Technical Fees: Section 194J

If you make payments to professionals (doctors, lawyers, accountants, architects, consultants) or for technical services exceeding Rs 30,000 per year, you must deduct TDS at 10%.

This primarily applies if you're running a business or profession yourself. Salaried individuals paying a CA for tax filing, for instance, are generally not required to deduct TDS under 194J (since they're not subject to audit requirements under 194C/194J).

However, if you're a freelancer with turnover above the audit threshold, keep this on your radar for payments you make to sub-contractors and other professionals.

How to Avoid Excess TDS: Forms 15G and 15H

If your total income is below the basic exemption limit, you can submit Form 15G (or Form 15H if you're a senior citizen) to the payer to request that they not deduct TDS.

Form 15G vs Form 15H

When and How to Submit

• Submit at the beginning of each financial year (April) to your bank, post office, or any other payer
• You need to submit a separate form to each institution that might deduct TDS
• Most banks now accept Form 15G/15H through net banking — no need to visit the branch
• The form is valid only for one financial year — you must resubmit each year

Common mistake: People with income above the exemption limit submit Form 15G/15H anyway, hoping to avoid TDS. This is a false declaration and can attract penalties. Only submit these forms if your total income from all sources genuinely falls below the taxable threshold.

How to Claim TDS Credit When Filing ITR

All TDS deducted on your income should reflect in your Form 26AS and AIS (Annual Information Statement). When filing your ITR, you claim credit for this TDS, which reduces your final tax liability or results in a refund.

Here's how to ensure smooth TDS credit:

1. Verify Form 26AS — check that all TDS entries match your records. Log in to the income tax portal or access it through your net banking
2. Cross-check with AIS — the Annual Information Statement may show additional transactions. Confirm or dispute any discrepancies
3. Report all income — you can only claim TDS credit on income that you've actually reported in your ITR. If you skip reporting FD interest but claim the TDS, you'll get a mismatch notice
4. Match TAN details — the deductor's TAN must match in your 26AS and your ITR. Mismatched TAN is a common reason for TDS credit rejection

49Tax automatically pulls your Form 26AS and AIS data and maps each TDS entry to the correct income schedule in your return, so you don't have to manually reconcile dozens of entries.

What If TDS Is Not Deducted?

Just because TDS wasn't deducted doesn't mean the income is tax-free. If your FD interest was below Rs 40,000, the bank won't deduct TDS, but you must still report this interest income in your ITR and pay tax on it if applicable.

Unreported income that appears in your AIS but not in your return is the most common trigger for income tax notices under Section 143(1). This is especially true for:

• Small FD interest amounts across multiple banks (each below threshold, but total is significant)
• Dividend income from multiple stocks and mutual funds
• Interest from savings accounts across banks (taxable above Rs 10,000 under Section 80TTA or Rs 50,000 under Section 80TTB for senior citizens)

Key Budget 2025 Changes Affecting TDS

The Union Budget 2025 introduced several TDS-related changes effective from FY 2025-26:

• Section 194A threshold for senior citizens remains at Rs 50,000, providing relief from TDS on moderate interest income
• TDS on rent under Section 194-I — the annual threshold was increased to Rs 2,40,000, reducing compliance burden for small payments
• Rationalization of TDS rates — several sections saw rate reductions to simplify compliance and reduce the refund burden on taxpayers
• Higher TDS for non-filers — Section 206AB continues to apply higher TDS rates (double the prescribed rate or 5%, whichever is higher) for people who haven't filed returns for the past two years despite having TDS exceeding Rs 50,000 each year

For the full rundown of budget changes, see our detailed Budget 2025 tax changes guide.

Quick Action Checklist

• Check Form 26AS now — before filing your ITR, verify that all TDS deducted during FY 2025-26 reflects correctly
• Submit Form 15G/15H — if your income is below the taxable limit, submit these forms to banks and other payers at the start of each financial year to avoid unnecessary TDS
• Keep PAN updated everywhere — ensure your PAN is linked with all banks, demat accounts, and property registrations to avoid the punitive 20% TDS rate
• Report all income — even if TDS wasn't deducted, report every source of income to avoid mismatch notices
• File on time — the ITR filing deadline for AY 2026-27 is July 31, 2026. Filing late means you can't claim certain deductions, and Section 206AB may trigger higher TDS next year