TDS & TCS — Tax Deducted/Collected at Source
Complete guide to TDS and TCS in India — rates, thresholds, due dates, TAN requirements, Form 26AS, penalties for non-compliance, and practical examples for salaried & business persons.
🏛️ Background
TDS (Tax Deducted at Source) is a mechanism where the payer deducts tax at the time of payment and deposits it with the government. TCS (Tax Collected at Source) is collected by the seller from the buyer at the time of sale of specified goods. Both are governed by the Income Tax Act, 1961 (Chapters XVII-B and XVII-BB). TDS was introduced to ensure tax collection at the point of income generation, reducing evasion.
📊 Key TDS Rates (FY 2025-26)
| Section | Nature of Payment | Threshold (₹) | Rate |
|---|---|---|---|
| 192 | Salary | Basic exemption | Slab rates |
| 194A | Interest (other than securities) | 50,000 (senior) / 40,000 | 10% |
| 194B | Lottery / Game show winnings | 10,000 | 30% |
| 194C | Contractor payments | 30,000 single / 1,00,000 aggregate | 1% (individual) / 2% |
| 194H | Commission / Brokerage | 15,000 | 5% |
| 194I | Rent | 2,40,000 | 2% (plant) / 10% (land/building) |
| 194IB | Rent by individual/HUF (non-audit) | 50,000/month | 5% |
| 194J | Professional / Technical fees | 30,000 | 10% (professional) / 2% (technical) |
| 194N | Cash withdrawal from bank | 1 crore | 2% |
| 194Q | Purchase of goods | 50 lakh | 0.1% |
| 194S | Virtual Digital Assets (crypto) | 50,000 (specified) / 10,000 | 1% |
If PAN not provided, TDS is deducted at 20% or applicable rate, whichever is higher (Section 206AA). Higher TDS (Section 206AB) applies to non-filers of ITR.
📅 TDS Deposit & Filing Deadlines
💳 TDS Deposit Dates
- • Government deductors: same day
- • Others: 7th of the following month
- • March deductions: 30th April
📝 TDS Return Filing
- • Q1 (Apr-Jun): 31st July
- • Q2 (Jul-Sep): 31st October
- • Q3 (Oct-Dec): 31st January
- • Q4 (Jan-Mar): 31st May
⚖️ Penalties for Non-Compliance
- ❌ Late deposit: Interest @ 1.5% per month (from date of deduction to date of deposit)
- ❌ Non-deduction: Interest @ 1% per month (from date when TDS was deductible to date of actual deduction)
- ❌ Late filing of TDS return: ₹200 per day (u/s 234E) — max: total TDS amount
- ❌ Penalty (u/s 271H): ₹10,000 to ₹1,00,000 for not filing or furnishing incorrect statements
⚠️ Disclaimer
This page is for educational and informational purposes only and does not constitute legal, tax, or financial advice. While we strive for 100% accuracy, laws and regulations change frequently. Always refer to the official gazette notifications, consult a qualified Chartered Accountant (CA), Company Secretary (CS), or legal professional before making any financial or legal decisions. Tenhash is not responsible for any actions taken based on this information. Last reviewed: March 2026.