← Notes Hub Paper 7: Direct Tax • TDS & TCS Master Compendium
AY 2025-26 | FY 2024-25
📘 CA Final Direct Tax • Paper 7 Master Compendium

TDS & TCS Provisions & Rates (AY 2025-26)

Comprehensive statutory compendium covering all 29 Tax Deducted at Source (TDS) sections (Sec 192 to 194T), Tax Collected at Source (TCS) under Section 206C, threshold limits, deductor/deductee classifications, deduction timing, and binding Supreme Court & High Court rulings. Updated with Finance (No. 2) Act 2024 amendments.

⚡ 29 Core TDS Sections
🤝 Sec 194T Partner TDS @ 10%
🎮 Sec 194BA Online Games @ 30%
🛡️ Sec 206C(1F) & 206C(1G) TCS
⚖️ Supreme Court Rulings (Air India, ITC Ltd)
🔍
Showing 29 Sections
Sec 192 💼 Salary & PF Limit: Basic exemption limit / Tax based on Slab Rate

Salary

Average rate of income-tax / Slab Rate
Payer (Deductor) Any Person / Employer
Payee (Deductee) Employee (Resident/NR)
Timing of Deduction At the time of payment
Threshold Criteria Basic exemption limit / Tax based on Slab Rate
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is required only at the time of payment.
  • If the employee opts out of default Sec 115BAC taxation and submits a declaration, deduct under normal rates; otherwise use Sec 115BAC by default.
  • Consider other income, deductions, and TDS/TCS when the employee furnishes evidence. Losses other than house property losses are ignored.
  • Employer-borne tax on non-monetary perquisites is not deducted from salary, is disallowed to the employer u/s 40(a)(v), is exempt for the employee u/s 10(10CC), and is treated as TDS credit.
  • Employee may furnish previous employer salary and TDS details to the current employer.
  • Partner salary is not covered u/s 192; from April 1, 2025, it falls u/s Sec 194T if over ₹20,000.
  • Direct tips to waiters are not salary and do not require TDS, even if routed through employer credit-card billing (ITC Ltd, 2016 SC).
Sec 192A 💼 Salary & PF Limit: ≥ ₹50,000

Accumulated balance/Premature withdrawal of PF

10%
Payer (Deductor) EPF Scheme Trustees / Any Person
Payee (Deductee) Employee (Resident/NR)
Timing of Deduction At the time of payment
Threshold Criteria ≥ ₹50,000
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted only at the time of payment.
  • No TDS is required if the aggregate payment is less than ₹50,000.
Sec 193 📈 Securities & Dividend Limit: > ₹10,000 in a F.Y.

Interest on Securities

10%
Payer (Deductor) Any Person
Payee (Deductee) Resident Person
Timing of Deduction At the time of credit or payment, whichever is earlier
Threshold Criteria > ₹10,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if aggregate interest in the F.Y. is up to ₹10,000.
  • No TDS for payments to LIC, GIC, or insurers; 7-Year NSC (IV-Issue); Sec 54EC bonds of Power Finance or Indian Railway Finance; or to a business trust by an SPV.
  • Government securities are exempt except taxable 8%, 7.75%, or floating-rate bonds where interest exceeds ₹10,000.
Sec 194 📈 Securities & Dividend Limit: > ₹10,000 in a F.Y.

Dividend

10%
Payer (Deductor) Domestic Company / Principal Officer
Payee (Deductee) Resident Person
Timing of Deduction Before making payment / at the time of payment
Threshold Criteria > ₹10,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted only at the time of payment.
  • No TDS if paid to an individual by non-cash mode up to ₹10,000.
  • No TDS if paid to LIC/GIC having beneficial interest, by an SPV to a business trust, or by an IFSC aircraft-leasing unit to another identical IFSC unit.
  • Applies to deemed dividend u/s 2(22)(a) to (f).
Sec 194A 📈 Securities & Dividend Limit: > ₹1,00,000 (Senior citizen from bank/co op bank/post office)
> ₹50,000 (others than Senior citizen from bank/co op bank/post office)
> ₹10,000 (other cases)

Interest other than Securities

10%
Payer (Deductor) Any Person (excluding Ind/HUF unless prior year T/O > ₹1 Cr or G/R > ₹50 Lakhs)
Payee (Deductee) Resident Person
Timing of Deduction At the time of credit or payment, whichever is earlier
Threshold Criteria > ₹1,00,000 (Senior citizen from bank/co op bank/post office)
> ₹50,000 (others than Senior citizen from bank/co op bank/post office)
> ₹10,000 (other cases)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS on savings bank interest, firm-to-partner interest, income-tax refund interest, zero coupon bonds, or payments to banks, LIC, UTI, and specified corporations. NBFCs are not exempt.
  • Time deposits are exempt up to ₹50,000, or ₹1,00,000 for senior citizens; other cases are exempt up to ₹10,000.
  • Co-operative society payments to members/other societies are exempt unless prior year turnover exceeds ₹50 crores and interest exceeds ₹50,000, or ₹1,00,000 for seniors.
  • Interest on deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank
  • MACT compensation interest is exempt up to ₹50,000. Mahila Samman Savings Certificate interest is exempt.
  • For CBS software, TDS is triggered on actual credit to the depositor, not macro provision accounts; thresholds are checked bank-wise.
  • For deceased depositors, minor-child interest is reported against the child's PAN. In CGAS accounts, pre-death interest uses the depositor's PAN and post-death interest uses the legal heir's PAN.
  • Disputed court deposits do not attract TDS until ownership is decided.
Sec 194B 🎲 Winnings & Online Gaming Limit: > ₹10,000 in a F.Y. (single transaction)

Winnings from lottery, crossword puzzles, card games

30%
Payer (Deductor) Any Person
Payee (Deductee) Any Person
Timing of Deduction At the time of payment
Threshold Criteria > ₹10,000 in a F.Y. (single transaction)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted only at the time of payment.
  • No TDS if the single-transaction winning is up to ₹10,000.
  • If the prize is in kind, or cash is insufficient, the payer must ensure tax is paid to the Government before releasing the prize.
Sec 194BB 🎲 Winnings & Online Gaming Limit: > ₹10,000 in single transaction

Winnings from horse race

30%
Payer (Deductor) Any Person (Bookmaker / Licensee)
Payee (Deductee) Any Person
Timing of Deduction At the time of payment
Threshold Criteria > ₹10,000 in single transaction
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted only at the time of payment.
  • No TDS if the single-transaction winning is up to ₹10,000.
  • Bookmakers deduct tax at 30% on winnings before set-off of losses.
  • If the prize is in kind, or cash is insufficient, the payer must ensure tax is paid to the Government before releasing the prize.
Sec 194BA 🎲 Winnings & Online Gaming Limit: On net winnings (No threshold, but concession if withdrawal ≤ ₹100 in a month under conditions)

Winnings from Online Games

30%
Payer (Deductor) Any Person
Payee (Deductee) Any Person
Timing of Deduction At withdrawal and at the end of the F.Y.
Threshold Criteria On net winnings (No threshold, but concession if withdrawal ≤ ₹100 in a month under conditions)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted at withdrawal and at the end of the F.Y.
  • Net Winning = (A+D) - (B+C+E), where A = withdrawals, D = closing balance, B = non-taxable deposits, C = opening balance, and E = previously taxed winnings.
  • Multiple accounts of one user are aggregated. Transfers between user accounts are not deposits or withdrawals. Borrowed money deposited is a non-taxable deposit.
  • Prizes in kind are treated as equivalent monetary deposit and simultaneous withdrawal; the prize is withheld until tax payment is ensured.
  • Bonuses are ignored unless recharacterized and allowed to be withdrawn.
  • No TDS for net winnings below ₹100 per month if the shortfall is deducted later or at year-end and the deductor assumes liability if the account balance is insufficient.
Sec 194C 📝 Contracts & Professional Limit: > ₹30,000 (single) or > ₹1,00,000 (aggregate in a F.Y.)

Contracts & sub-contracts

1% for Ind/HUF, 2% for others
Payer (Deductor) Specified entities / Any Person (Ind/HUF requires prior year T/O > ₹1 Cr or G/R > ₹50 Lakhs)
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹30,000 (single) or > ₹1,00,000 (aggregate in a F.Y.)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if a single contract is up to ₹30,000 or aggregate contracts in the P.Y. are up to ₹1,00,000. No TDS for personal-purpose contracts of Ind/HUF.
  • "Work" includes advertising, broadcasting, carriage except railways, catering, and job work with client materials; it excludes manufacturing with open-market materials and payments covered by 194J.
  • Transporters are exempt if they own 10 or fewer vehicles and furnish PAN.
  • For job work, TDS applies only on processing value if material cost is separately shown; otherwise on total value.
  • Client to ad agency is covered by 194C; ad agency to TV channel as principal-to-principal is not.
  • Cold storage and airport landing/parking charges are covered by 194C. Broadcaster copyright acquisition is 194C, but mere telecast-right acquisition is not.
  • Gas sale with transport included is not subject to TDS; transport by a third party is covered by 194C.
Sec 194D 📝 Contracts & Professional Limit: > ₹20,000 in a F.Y.

Insurance Commission

2% (10% if payee is a domestic company)
Payer (Deductor) Any Person
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹20,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if commission is up to ₹20,000 in the F.Y.
  • Common commission/brokerage exclusions include BSNL/MTNL payments to PCO franchises and security underwriting/brokerage.
  • Stamp-vendor discount and telecom distributor margin on prepaid kits are treated as principal-to-principal and do not attract TDS.
  • Prasar Bharati retained amounts and airline primary/supplementary commissions are treated as commission and attract TDS.
Sec 194DA 📝 Contracts & Professional Limit: ≥ ₹1,00,000 in a F.Y.

Maturity of Life Insurance Policy

2% on the income component
Payer (Deductor) Any Person
Payee (Deductee) Resident Person
Timing of Deduction At the time of payment
Threshold Criteria ≥ ₹1,00,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted at the time of payment.
  • No TDS if the payment is below ₹1,00,000 or exempt u/s 10(10D).
  • TDS applies only on the income component, meaning maturity amount minus premium.
Sec 194E 📝 Contracts & Professional Limit: None mentioned

Payment to NR Sports person / Association / Entertainer

20.8% (20% + 4% HEC)
Payer (Deductor) Any Person
Payee (Deductee) NR Sports person, Association, or Entertainer
Timing of Deduction At the time of payment
Threshold Criteria None mentioned
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Covers income of a non-resident non-citizen sportsperson from participation, advertisements, and article contributions.
  • Covers guarantee income of non-resident sports associations and performance income of non-resident entertainers.
Sec 194G 📝 Contracts & Professional Limit: > ₹20,000 in a F.Y.

Commission on sale of lottery tickets

2%
Payer (Deductor) Any Person
Payee (Deductee) Any Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹20,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if commission is up to ₹20,000 in the F.Y.
  • Common commission/brokerage exclusions include BSNL/MTNL payments to PCO franchises and security underwriting/brokerage.
  • Stamp-vendor discount and telecom distributor margin on prepaid kits are treated as principal-to-principal and do not attract TDS.
  • Prasar Bharati retained amounts and airline primary/supplementary commissions are treated as commission and attract TDS.
Sec 194H 📝 Contracts & Professional Limit: > ₹20,000 in a F.Y.

Commission and Brokerage

2%
Payer (Deductor) Any Person (excluding Ind/HUF unless prior year T/O limits apply)
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹20,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if commission/brokerage is up to ₹20,000 in the F.Y.
  • No TDS on BSNL/MTNL payments to PCO franchises or on security underwriting/brokerage.
  • Stamp-vendor discount and telecom distributor margin on prepaid kits are treated as principal-to-principal and do not attract TDS.
  • Prasar Bharati retained amounts and airline primary/supplementary commissions are treated as commission and attract TDS.
Sec 194-I 🏢 Rent & Immovable Property Limit: > ₹50,000 to a person per month or part of the month

Rent

2% for Plant/Machinery/Equipment; 10% for Land/Building/Furniture
Payer (Deductor) Any Person (excluding Ind/HUF unless prior year T/O limits apply)
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹50,000 to a person per month or part of the month
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if rent is up to ₹50,000 per month.
  • Rent includes non-refundable deposits, arrears, advance rent, and warehousing charges; the payee need not be the owner.
  • Refundable deposits, lumpsum lease premium/upfront charges for long-term rights, passenger service fees, and IFSC aircraft/ship leases are excluded.
  • Mobile towers are treated as plant and machinery and attract 2% TDS.
  • Dumper hiring is treated as sub-contract u/s 194C, not rent u/s 194-I.
  • Co-owner thresholds are checked individually.
Sec 194-IA 🏢 Rent & Immovable Property Limit: ≥ ₹50,00,000 (Consideration or SDV)

Transfer of Immovable property (except rural agricultural land)

1% of consideration or SDV, whichever is higher
Payer (Deductor) Any Person / Transferee (Buyer)
Payee (Deductee) Resident Person / Transferor (Seller)
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria ≥ ₹50,00,000 (Consideration or SDV)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Applies if consideration or stamp duty value is ₹50,00,000 or more.
  • Consideration is aggregated across all transferees and all transferors.
  • Consideration includes club membership fees, car parking, electricity, maintenance, and advance fees.
  • Form 26QD is required.
Sec 194-IB 🏢 Rent & Immovable Property Limit: > ₹50,000 per month or part of a month

Rent of Immovable property by certain individuals

2%
Payer (Deductor) Individual / HUF (not covered u/s 194-I)
Payee (Deductee) Resident Person
Timing of Deduction In the last month of the P.Y. or tenancy
Threshold Criteria > ₹50,000 per month or part of a month
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if rent is up to ₹50,000 per month.
  • TDS is deducted at credit or payment of the last month of the year or tenancy.
  • If PAN is not furnished, TDS is 20%, capped at the amount of the last month's rent.
  • Form 26QC is required.
Sec 194-IC 🏢 Rent & Immovable Property Limit: No specified threshold

Consideration under Joint Development Agreement (JDA)

10%
Payer (Deductor) Any Person
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria No specified threshold
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Applies only to cash or money consideration under a joint development agreement covered by u/s 45(5A).
Sec 194J 📝 Contracts & Professional Limit: > ₹50,000 in a F.Y. for each category (No limit for Director's fees)

Fees for Professional/Technical Services, Royalty, Directors Remuneration

2% for call center, technical services, or certain film royalties; 10% in other cases
Payer (Deductor) Any Person (excluding Ind/HUF unless prior year T/O limits apply)
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹50,000 in a F.Y. for each category (No limit for Director's fees)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • The ₹50,000 annual limit applies separately for professional services, technical services, royalty, and non-compete fees. No limit applies for director fees.
  • Ind/HUF personal-purpose professional services are exempt.
  • Ind/HUF crossing turnover limits deduct only for professional or technical services, not royalty or non-compete fees.
  • Sports personnel such as umpires, commentators, and anchors fall under professional services.
  • Software is royalty; subsequent transfers without modification are exempt if TDS was already deducted u/s 194J or 195.
  • TPA hospital settlement payments are covered by 194J.
  • Stock exchange BOLT charges are a facility, not technical services, and do not attract TDS.
Sec 194K 📈 Securities & Dividend Limit: > ₹10,000 in a F.Y.

Income from UTI or Mutual Fund Units

10%
Payer (Deductor) Any Person / MF Administrator
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹10,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if payment is up to ₹10,000 in a P.Y.
  • No separate supplementary rule was provided in the additional-information extract for this section.
Sec 194LA 🏢 Rent & Immovable Property Limit: > ₹5,00,000 in a F.Y.

Compensation on compulsory acquisition of Immovable Property

10%
Payer (Deductor) Any Person
Payee (Deductee) Resident Person
Timing of Deduction At the time of payment
Threshold Criteria > ₹5,00,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted at the time of payment.
  • No TDS if compensation is up to ₹5,00,000.
  • Does not apply to urban or rural agricultural land.
Sec 194M 📝 Contracts & Professional Limit: > ₹50,00,000 in a F.Y.

Payments to Contractors, Commission, Brokerage, FPS

2%
Payer (Deductor) Individual/HUF (not liable to deduct TDS u/s 194C, 194H, 194J)
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹50,00,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if aggregate payment is up to ₹50,00,000.
  • Covers personal contracts and Ind/HUF payers not covered by 194C, 194H, or 194J turnover criteria.
  • Payer is not required to obtain TAN; tax is deposited online through Form 26QA,26QB,26QC,26QD.
Sec 194N 💳 Cash & E-Commerce Limit: > ₹1 Crore in a P.Y. (> ₹3 Crore if payee is a co-op society; > ₹20 Lakhs if non-filer)

Cash withdrawal from Bank, Co-op. Bank, Post Office

2% (5% if withdrawal > ₹1 Crore and payee is a non-filer for 3 preceding P.Y.s)
Payer (Deductor) Bank, Co-op. Bank, or Post Office
Payee (Deductee) Any Person
Timing of Deduction At the time of payment
Threshold Criteria > ₹1 Crore in a P.Y. (> ₹3 Crore if payee is a co-op society; > ₹20 Lakhs if non-filer)
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • TDS is deducted at the time of payment.
  • Threshold is withdrawal exceeding ₹1 crore, or ₹3 crore for a co-operative society.
  • For non-filers of the past 3 years, TDS is 2% over ₹20 lakhs and 5% over ₹1 crore.
  • Exemptions include withdrawals by Government , banks & Correspondent, post offices & Correspondent, white-label ATM operators, CRAs, APMC commission agents, and FFMCs.
Sec 194-O 💳 Cash & E-Commerce Limit: > ₹5 Lakhs in a F.Y. for Individual/HUF participants

E-Commerce transactions (Sale of Goods/Service)

0.1% on gross amount (5% if PAN not furnished)
Payer (Deductor) E-Commerce Operator
Payee (Deductee) E-Commerce Participant (Resident)
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹5 Lakhs in a F.Y. for Individual/HUF participants
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Ind/HUF e-commerce participants are exempt up to ₹5 lakhs if PAN/Aadhaar is furnished.
  • Direct payments to the seller are deemed to be through the e-commerce operator.
  • Overrides other TDS sections unless the payment is for non-sale services such as advertisements. Covers goods as well as professional/technical services.
  • Payment gateways need not deduct if the operator has already deducted.
  • Insurance aggregator deducts in the first year; insurance company deducts on commission in later years.
  • E-auction platforms are exempt if they only provide price discovery and payment happens outside the portal.
  • For ONDC multiple operators, seller-side ECO complies if making final payment; buyer-side ECO complies if seller-side ECO is the actual seller.
  • Convenience, logistics, and delivery fees are included. Seller discount reduces gross amount; ECO discount does not.
Sec 194P 💳 Cash & E-Commerce Limit: Basic exemption limit

TDS on Senior Citizen Pension

Slab Rate / Rates in force
Payer (Deductor) Specified Bank
Payee (Deductee) Resident Individual (age 75+)
Timing of Deduction N/A (Bank computes tax liability)
Threshold Criteria Basic exemption limit
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Applies when the resident individual is 75 or older, receives pension and interest from the same specified bank, and submits Form 12BBA.
  • The bank computes total income after Chapter VI-A deductions and 87A rebate, then applies slab rates.
  • The assessee is exempt from filing ROI once the specified bank deducts tax under this mechanism.
Sec 194Q 📦 Goods, Perks & VDAs Limit: > ₹50 Lakhs in a P.Y.

Purchase of Goods

0.1% of sum exceeding ₹50 Lakhs
Payer (Deductor) Any Person (Buyer) with prior P.Y. business T/O > ₹10 Crores
Payee (Deductee) Resident Person (Seller)
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹50 Lakhs in a P.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Applies on the sum exceeding ₹50 lakhs. Rate is 5% if PAN is not furnished.
  • First year of business incorporation is exempt because there is no prior-year turnover. Non-business turnover is excluded for turnover checks.
  • Subordinate to other TDS provisions and TCS u/s 206C(1), 206C(1F), and 206C(1G), but takes priority over Sec 194-O.
  • Exemptions include recognised stock, commodity, and power exchanges; non-resident buyer without PE; seller whose entire income is exempt; and Government departments selling goods. PSUs/Authorities are covered.
  • Indirect taxes are excluded if separately invoiced, but included for advance payments.
  • Purchase returns are adjusted against future purchases.
Sec 194R 📦 Goods, Perks & VDAs Limit: > ₹20,000 in a F.Y.

Any benefit or perquisite from business/profession

10%
Payer (Deductor) Any Person (excluding Ind/HUF unless prior year T/O limits apply)
Payee (Deductee) Resident Person
Timing of Deduction Before providing the benefit/perquisite
Threshold Criteria > ₹20,000 in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No TDS if benefits/perquisites are up to ₹20,000 in the F.Y. If the benefit is in kind, the provider must ensure tax is paid.
  • Applies regardless of whether the recipient is taxable. Covers capital assets, free samples, incentives, trips, and event tickets.
  • Excludes sales discounts, cash discounts, rebates, bonus shares, right shares, pure-agent reimbursements, loan waivers by banks/NBFCs, and embassies.
  • Conferences are exempt if for product launch, discussion, training, or account reconciliation. Leisure, family members, or overstay are taxable, except one day before/after.
  • Out-of-pocket reimbursements are covered unless invoiced directly to the client or TDS was already deducted on total gross consideration.
  • For group activities, the provider can opt to disallow the expense instead of tracking TDS for each participant.
  • Value benefits at purchase price, manufacturing price, or FMV excluding GST. If a business asset is received, depreciation can be claimed on FMV.
Sec 194S 📦 Goods, Perks & VDAs Limit: ≤ ₹50,000 for specified person / > ₹10,000 for others in a F.Y.

Transfer of Virtual Digital Asset (VDA)

1%
Payer (Deductor) Any Person
Payee (Deductee) Resident Person
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria ≤ ₹50,000 for specified person / > ₹10,000 for others in a F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • No specific additional rule was provided in the supplementary extract for this section.
  • Apply the general rules in the main row, including deduction at credit or payment, whichever is earlier.
Sec 194T 🤝 Partner Remuneration Limit: > ₹20,000 during the F.Y.

Salary, remuneration, commission, bonus or interest to a partner

10%
Payer (Deductor) Firm (Including LLP)
Payee (Deductee) Partner
Timing of Deduction At credit or payment, whichever is earlier
Threshold Criteria > ₹20,000 during the F.Y.
📌 Key Statutory Provisions, Exemptions & Judicial Rules
  • Limit applies per payee.
  • Covers salary, remuneration, commission, bonus, or interest paid by a firm, including LLP, to a partner.
  • Partner salary is not covered u/s 192; from April 1, 2025, this section applies if the payment exceeds ₹20,000.
S.No Section Nature of Payment Threshold Limit Payer Payee TDS Rate Timing of Deduction Statutory Notes & Edge Cases
1 Sec 192 Salary
Salary & PF		 Basic exemption limit / Tax based on Slab Rate Any Person / Employer Employee (Resident/NR) Average rate of income-tax / Slab Rate At the time of payment
  • TDS is required only at the time of payment.
  • If the employee opts out of default 115BAC taxation and submits a declaration, deduct under normal rates; otherwise use 115BAC by default.
  • Consider other income, deductions, and TDS/TCS when the employee furnishes evidence. Losses other than house property losses are ignored.
  • Employer-borne tax on non-monetary perquisites is not deducted from salary, is disallowed to the employer u/s 40(a)(v), is exempt for the employee u/s 10(10CC), and is treated as TDS credit.
  • Employee may furnish previous employer salary and TDS details to the current employer.
  • Partner salary is not covered u/s 192; from April 1, 2025, it falls u/s 194T if over ₹20,000.
  • Direct tips to waiters are not salary and do not require TDS, even if routed through employer credit-card billing (ITC Ltd, 2016 SC).
2 Sec 192A Accumulated balance/Premature withdrawal of PF
Salary & PF		 ≥ ₹50,000 EPF Scheme Trustees / Any Person Employee (Resident/NR) 10% At the time of payment
  • TDS is deducted only at the time of payment.
  • No TDS is required if the aggregate payment is less than ₹50,000.
3 Sec 193 Interest on Securities
Securities & Dividend		 > ₹10,000 in a F.Y. Any Person Resident Person 10% At the time of credit or payment, whichever is earlier
  • No TDS if aggregate interest in the F.Y. is up to ₹10,000.
  • No TDS for payments to LIC, GIC, or insurers; 7-Year NSC (IV-Issue); Sec 54EC bonds of Power Finance or Indian Railway Finance; or to a business trust by an SPV.
  • Government securities are exempt except taxable 8%, 7.75%, or floating-rate bonds where interest exceeds ₹10,000.
4 Sec 194 Dividend
Securities & Dividend		 > ₹10,000 in a F.Y. Domestic Company / Principal Officer Resident Person 10% Before making payment / at the time of payment
  • TDS is deducted only at the time of payment.
  • No TDS if paid to an individual by non-cash mode up to ₹10,000.
  • No TDS if paid to LIC/GIC having beneficial interest, by an SPV to a business trust, or by an IFSC aircraft-leasing unit to another identical IFSC unit.
  • Applies to deemed dividend u/s 2(22)(a) to (f).
5 Sec 194A Interest other than Securities
Securities & Dividend		 > ₹1,00,000 (Senior citizen from bank/co op bank/post office)
> ₹50,000 (others than Senior citizen from bank/co op bank/post office)
> ₹10,000 (other cases)		 Any Person (excluding Ind/HUF unless prior year T/O > ₹1 Cr or G/R > ₹50 Lakhs) Resident Person 10% At the time of credit or payment, whichever is earlier
  • No TDS on savings bank interest, firm-to-partner interest, income-tax refund interest, zero coupon bonds, or payments to banks, LIC, UTI, and specified corporations. NBFCs are not exempt.
  • Time deposits are exempt up to ₹50,000, or ₹1,00,000 for senior citizens; other cases are exempt up to ₹10,000.
  • Co-operative society payments to members/other societies are exempt unless prior year turnover exceeds ₹50 crores and interest exceeds ₹50,000, or ₹1,00,000 for seniors.
  • Interest on deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank
  • MACT compensation interest is exempt up to ₹50,000. Mahila Samman Savings Certificate interest is exempt.
  • For CBS software, TDS is triggered on actual credit to the depositor, not macro provision accounts; thresholds are checked bank-wise.
  • For deceased depositors, minor-child interest is reported against the child's PAN. In CGAS accounts, pre-death interest uses the depositor's PAN and post-death interest uses the legal heir's PAN.
  • Disputed court deposits do not attract TDS until ownership is decided.
6 Sec 194B Winnings from lottery, crossword puzzles, card games
Winnings & Online Gaming		 > ₹10,000 in a F.Y. (single transaction) Any Person Any Person 30% At the time of payment
  • TDS is deducted only at the time of payment.
  • No TDS if the single-transaction winning is up to ₹10,000.
  • If the prize is in kind, or cash is insufficient, the payer must ensure tax is paid to the Government before releasing the prize.
7 Sec 194BB Winnings from horse race
Winnings & Online Gaming		 > ₹10,000 in single transaction Any Person (Bookmaker / Licensee) Any Person 30% At the time of payment
  • TDS is deducted only at the time of payment.
  • No TDS if the single-transaction winning is up to ₹10,000.
  • Bookmakers deduct tax at 30% on winnings before set-off of losses.
  • If the prize is in kind, or cash is insufficient, the payer must ensure tax is paid to the Government before releasing the prize.
8 Sec 194BA Winnings from Online Games
Winnings & Online Gaming		 On net winnings (No threshold, but concession if withdrawal ≤ ₹100 in a month under conditions) Any Person Any Person 30% At withdrawal and at the end of the F.Y.
  • TDS is deducted at withdrawal and at the end of the F.Y.
  • Net Winning = (A+D) - (B+C+E), where A = withdrawals, D = closing balance, B = non-taxable deposits, C = opening balance, and E = previously taxed winnings.
  • Multiple accounts of one user are aggregated. Transfers between user accounts are not deposits or withdrawals. Borrowed money deposited is a non-taxable deposit.
  • Prizes in kind are treated as equivalent monetary deposit and simultaneous withdrawal; the prize is withheld until tax payment is ensured.
  • Bonuses are ignored unless recharacterized and allowed to be withdrawn.
  • No TDS for net winnings below ₹100 per month if the shortfall is deducted later or at year-end and the deductor assumes liability if the account balance is insufficient.
9 Sec 194C Contracts & sub-contracts
Contracts & Professional		 > ₹30,000 (single) or > ₹1,00,000 (aggregate in a F.Y.) Specified entities / Any Person (Ind/HUF requires prior year T/O > ₹1 Cr or G/R > ₹50 Lakhs) Resident Person 1% for Ind/HUF, 2% for others At credit or payment, whichever is earlier
  • No TDS if a single contract is up to ₹30,000 or aggregate contracts in the P.Y. are up to ₹1,00,000. No TDS for personal-purpose contracts of Ind/HUF.
  • "Work" includes advertising, broadcasting, carriage except railways, catering, and job work with client materials; it excludes manufacturing with open-market materials and payments covered by 194J.
  • Transporters are exempt if they own 10 or fewer vehicles and furnish PAN.
  • For job work, TDS applies only on processing value if material cost is separately shown; otherwise on total value.
  • Client to ad agency is covered by 194C; ad agency to TV channel as principal-to-principal is not.
  • Cold storage and airport landing/parking charges are covered by 194C. Broadcaster copyright acquisition is 194C, but mere telecast-right acquisition is not.
  • Gas sale with transport included is not subject to TDS; transport by a third party is covered by 194C.
10 Sec 194D Insurance Commission
Contracts & Professional		 > ₹20,000 in a F.Y. Any Person Resident Person 2% (10% if payee is a domestic company) At credit or payment, whichever is earlier
  • No TDS if commission is up to ₹20,000 in the F.Y.
  • Common commission/brokerage exclusions include BSNL/MTNL payments to PCO franchises and security underwriting/brokerage.
  • Stamp-vendor discount and telecom distributor margin on prepaid kits are treated as principal-to-principal and do not attract TDS.
  • Prasar Bharati retained amounts and airline primary/supplementary commissions are treated as commission and attract TDS.
11 Sec 194DA Maturity of Life Insurance Policy
Contracts & Professional		 ≥ ₹1,00,000 in a F.Y. Any Person Resident Person 2% on the income component At the time of payment
  • TDS is deducted at the time of payment.
  • No TDS if the payment is below ₹1,00,000 or exempt u/s 10(10D).
  • TDS applies only on the income component, meaning maturity amount minus premium.
12 Sec 194E Payment to NR Sports person / Association / Entertainer
Contracts & Professional		 None mentioned Any Person NR Sports person, Association, or Entertainer 20.8% (20% + 4% HEC) At the time of payment
  • Covers income of a non-resident non-citizen sportsperson from participation, advertisements, and article contributions.
  • Covers guarantee income of non-resident sports associations and performance income of non-resident entertainers.
13 Sec 194G Commission on sale of lottery tickets
Contracts & Professional		 > ₹20,000 in a F.Y. Any Person Any Person 2% At credit or payment, whichever is earlier
  • No TDS if commission is up to ₹20,000 in the F.Y.
  • Common commission/brokerage exclusions include BSNL/MTNL payments to PCO franchises and security underwriting/brokerage.
  • Stamp-vendor discount and telecom distributor margin on prepaid kits are treated as principal-to-principal and do not attract TDS.
  • Prasar Bharati retained amounts and airline primary/supplementary commissions are treated as commission and attract TDS.
14 Sec 194H Commission and Brokerage
Contracts & Professional		 > ₹20,000 in a F.Y. Any Person (excluding Ind/HUF unless prior year T/O limits apply) Resident Person 2% At credit or payment, whichever is earlier
  • No TDS if commission/brokerage is up to ₹20,000 in the F.Y.
  • No TDS on BSNL/MTNL payments to PCO franchises or on security underwriting/brokerage.
  • Stamp-vendor discount and telecom distributor margin on prepaid kits are treated as principal-to-principal and do not attract TDS.
  • Prasar Bharati retained amounts and airline primary/supplementary commissions are treated as commission and attract TDS.
15 Sec 194-I Rent
Rent & Immovable Property		 > ₹50,000 to a person per month or part of the month Any Person (excluding Ind/HUF unless prior year T/O limits apply) Resident Person 2% for Plant/Machinery/Equipment; 10% for Land/Building/Furniture At credit or payment, whichever is earlier
  • No TDS if rent is up to ₹50,000 per month.
  • Rent includes non-refundable deposits, arrears, advance rent, and warehousing charges; the payee need not be the owner.
  • Refundable deposits, lumpsum lease premium/upfront charges for long-term rights, passenger service fees, and IFSC aircraft/ship leases are excluded.
  • Mobile towers are treated as plant and machinery and attract 2% TDS.
  • Dumper hiring is treated as sub-contract u/s 194C, not rent u/s 194-I.
  • Co-owner thresholds are checked individually.
16 Sec 194-IA Transfer of Immovable property (except rural agricultural land)
Rent & Immovable Property		 ≥ ₹50,00,000 (Consideration or SDV) Any Person / Transferee (Buyer) Resident Person / Transferor (Seller) 1% of consideration or SDV, whichever is higher At credit or payment, whichever is earlier
  • Applies if consideration or stamp duty value is ₹50,00,000 or more.
  • Consideration is aggregated across all transferees and all transferors.
  • Consideration includes club membership fees, car parking, electricity, maintenance, and advance fees.
  • Form 26QD is required.
17 Sec 194-IB Rent of Immovable property by certain individuals
Rent & Immovable Property		 > ₹50,000 per month or part of a month Individual / HUF (not covered u/s 194-I) Resident Person 2% In the last month of the P.Y. or tenancy
  • No TDS if rent is up to ₹50,000 per month.
  • TDS is deducted at credit or payment of the last month of the year or tenancy.
  • If PAN is not furnished, TDS is 20%, capped at the amount of the last month's rent.
  • Form 26QC is required.
18 Sec 194-IC Consideration under Joint Development Agreement (JDA)
Rent & Immovable Property		 No specified threshold Any Person Resident Person 10% At credit or payment, whichever is earlier
  • Applies only to cash or money consideration under a joint development agreement covered by u/s 45(5A).
19 Sec 194J Fees for Professional/Technical Services, Royalty, Directors Remuneration
Contracts & Professional		 > ₹50,000 in a F.Y. for each category (No limit for Director's fees) Any Person (excluding Ind/HUF unless prior year T/O limits apply) Resident Person 2% for call center, technical services, or certain film royalties; 10% in other cases At credit or payment, whichever is earlier
  • The ₹50,000 annual limit applies separately for professional services, technical services, royalty, and non-compete fees. No limit applies for director fees.
  • Ind/HUF personal-purpose professional services are exempt.
  • Ind/HUF crossing turnover limits deduct only for professional or technical services, not royalty or non-compete fees.
  • Sports personnel such as umpires, commentators, and anchors fall under professional services.
  • Software is royalty; subsequent transfers without modification are exempt if TDS was already deducted u/s 194J or 195.
  • TPA hospital settlement payments are covered by 194J.
  • Stock exchange BOLT charges are a facility, not technical services, and do not attract TDS.
20 Sec 194K Income from UTI or Mutual Fund Units
Securities & Dividend		 > ₹10,000 in a F.Y. Any Person / MF Administrator Resident Person 10% At credit or payment, whichever is earlier
  • No TDS if payment is up to ₹10,000 in a P.Y.
  • No separate supplementary rule was provided in the additional-information extract for this section.
21 Sec 194LA Compensation on compulsory acquisition of Immovable Property
Rent & Immovable Property		 > ₹5,00,000 in a F.Y. Any Person Resident Person 10% At the time of payment
  • TDS is deducted at the time of payment.
  • No TDS if compensation is up to ₹5,00,000.
  • Does not apply to urban or rural agricultural land.
22 Sec 194M Payments to Contractors, Commission, Brokerage, FPS
Contracts & Professional		 > ₹50,00,000 in a F.Y. Individual/HUF (not liable to deduct TDS u/s 194C, 194H, 194J) Resident Person 2% At credit or payment, whichever is earlier
  • No TDS if aggregate payment is up to ₹50,00,000.
  • Covers personal contracts and Ind/HUF payers not covered by 194C, 194H, or 194J turnover criteria.
  • Payer is not required to obtain TAN; tax is deposited online through Form 26QA,26QB,26QC,26QD.
23 Sec 194N Cash withdrawal from Bank, Co-op. Bank, Post Office
Cash & E-Commerce		 > ₹1 Crore in a P.Y. (> ₹3 Crore if payee is a co-op society; > ₹20 Lakhs if non-filer) Bank, Co-op. Bank, or Post Office Any Person 2% (5% if withdrawal > ₹1 Crore and payee is a non-filer for 3 preceding P.Y.s) At the time of payment
  • TDS is deducted at the time of payment.
  • Threshold is withdrawal exceeding ₹1 crore, or ₹3 crore for a co-operative society.
  • For non-filers of the past 3 years, TDS is 2% over ₹20 lakhs and 5% over ₹1 crore.
  • Exemptions include withdrawals by Government , banks & Correspondent, post offices & Correspondent, white-label ATM operators, CRAs, APMC commission agents, and FFMCs.
24 Sec 194-O E-Commerce transactions (Sale of Goods/Service)
Cash & E-Commerce		 > ₹5 Lakhs in a F.Y. for Individual/HUF participants E-Commerce Operator E-Commerce Participant (Resident) 0.1% on gross amount (5% if PAN not furnished) At credit or payment, whichever is earlier
  • Ind/HUF e-commerce participants are exempt up to ₹5 lakhs if PAN/Aadhaar is furnished.
  • Direct payments to the seller are deemed to be through the e-commerce operator.
  • Overrides other TDS sections unless the payment is for non-sale services such as advertisements. Covers goods as well as professional/technical services.
  • Payment gateways need not deduct if the operator has already deducted.
  • Insurance aggregator deducts in the first year; insurance company deducts on commission in later years.
  • E-auction platforms are exempt if they only provide price discovery and payment happens outside the portal.
  • For ONDC multiple operators, seller-side ECO complies if making final payment; buyer-side ECO complies if seller-side ECO is the actual seller.
  • Convenience, logistics, and delivery fees are included. Seller discount reduces gross amount; ECO discount does not.
25 Sec 194P TDS on Senior Citizen Pension
Cash & E-Commerce		 Basic exemption limit Specified Bank Resident Individual (age 75+) Slab Rate / Rates in force N/A (Bank computes tax liability)
  • Applies when the resident individual is 75 or older, receives pension and interest from the same specified bank, and submits Form 12BBA.
  • The bank computes total income after Chapter VI-A deductions and 87A rebate, then applies slab rates.
  • The assessee is exempt from filing ROI once the specified bank deducts tax under this mechanism.
26 Sec 194Q Purchase of Goods
Goods, Perks & VDAs		 > ₹50 Lakhs in a P.Y. Any Person (Buyer) with prior P.Y. business T/O > ₹10 Crores Resident Person (Seller) 0.1% of sum exceeding ₹50 Lakhs At credit or payment, whichever is earlier
  • Applies on the sum exceeding ₹50 lakhs. Rate is 5% if PAN is not furnished.
  • First year of business incorporation is exempt because there is no prior-year turnover. Non-business turnover is excluded for turnover checks.
  • Subordinate to other TDS provisions and TCS u/s 206C(1), 206C(1F), and 206C(1G), but takes priority over 194-O.
  • Exemptions include recognised stock, commodity, and power exchanges; non-resident buyer without PE; seller whose entire income is exempt; and Government departments selling goods. PSUs/Authorities are covered.
  • Indirect taxes are excluded if separately invoiced, but included for advance payments.
  • Purchase returns are adjusted against future purchases.
27 Sec 194R Any benefit or perquisite from business/profession
Goods, Perks & VDAs		 > ₹20,000 in a F.Y. Any Person (excluding Ind/HUF unless prior year T/O limits apply) Resident Person 10% Before providing the benefit/perquisite
  • No TDS if benefits/perquisites are up to ₹20,000 in the F.Y. If the benefit is in kind, the provider must ensure tax is paid.
  • Applies regardless of whether the recipient is taxable. Covers capital assets, free samples, incentives, trips, and event tickets.
  • Excludes sales discounts, cash discounts, rebates, bonus shares, right shares, pure-agent reimbursements, loan waivers by banks/NBFCs, and embassies.
  • Conferences are exempt if for product launch, discussion, training, or account reconciliation. Leisure, family members, or overstay are taxable, except one day before/after.
  • Out-of-pocket reimbursements are covered unless invoiced directly to the client or TDS was already deducted on total gross consideration.
  • For group activities, the provider can opt to disallow the expense instead of tracking TDS for each participant.
  • Value benefits at purchase price, manufacturing price, or FMV excluding GST. If a business asset is received, depreciation can be claimed on FMV.
28 Sec 194S Transfer of Virtual Digital Asset (VDA)
Goods, Perks & VDAs		 ≤ ₹50,000 for specified person / > ₹10,000 for others in a F.Y. Any Person Resident Person 1% At credit or payment, whichever is earlier
  • No specific additional rule was provided in the supplementary extract for this section.
  • Apply the general rules in the main row, including deduction at credit or payment, whichever is earlier.
29 Sec 194T Salary, remuneration, commission, bonus or interest to a partner
Partner Remuneration		 > ₹20,000 during the F.Y. Firm (Including LLP) Partner 10% At credit or payment, whichever is earlier
  • Limit applies per payee.
  • Covers salary, remuneration, commission, bonus, or interest paid by a firm, including LLP, to a partner.
  • Partner salary is not covered u/s 192; from April 1, 2025, this section applies if the payment exceeds ₹20,000.

🛡️ Tax Collected at Source (TCS) Provisions u/s 206C

Comprehensive coverage of high-yield TCS provisions applicable for AY 2025-26 under Section 206C(1F) and Section 206C(1G).

Sec 206C(1F): Motor Vehicles & Luxury Goods 1% TCS
  • Scope & Threshold: Applies to retail sale of motor vehicles exceeding ₹10 Lakhs. Does not apply on manufacturer-to-dealer commercial sales.
  • Per-Transaction Test: The ₹10 Lakh threshold is evaluated per individual vehicle/purchase, not in aggregate across the financial year.
  • Notified Luxury Goods: Covers wrist watches, high-value art pieces, collectibles, yachts, helicopters, sunglasses, designer bags, luxury shoes, sports kits, home theatres, and polo/race horses exceeding ₹10 Lakhs.
  • Exempt Buyers: Public sector companies carrying passengers/goods, Central/State Governments, Foreign Embassies, High Commissions, and Local Authorities.
  • Timing of Collection: At the time of receipt of sale consideration by any mode.
Sec 206C(1G): LRS & Overseas Tour Packages 5% / 20% TCS
  • LRS Threshold: TCS applies on remittances under the Liberalised Remittance Scheme (LRS) exceeding ₹10 Lakhs (combined aggregate threshold for all purposes in a F.Y.).
  • Education Loan u/s 80E: Remittances funded through financial institution loans under Section 80E attract a concessional TCS rate of 0.5% above ₹10 Lakhs.
  • Medical & Self-Funded Education: 5% TCS on amount exceeding ₹10 Lakhs.
  • Other LRS Remittances: 20% TCS on amount exceeding ₹10 Lakhs.
  • Overseas Tour Program Packages (OTPP):
    • 5% TCS on package cost up to ₹10 Lakhs (No basic exemption).
    • 20% TCS on the amount exceeding ₹10 Lakhs.
    • Requires multi-element package (hotel + travel); standalone flight or standalone hotel bookings are excluded.
  • Credit Cards Abroad: Expenses via international credit cards while travelling abroad are currently excluded from LRS and attract no TCS.

⚖️ Non-Residents (Sec 195) & Landmark Judicial Rulings

Essential statutory overrides, double taxation relief precedents, and deductor liabilities established by the Supreme Court of India and High Courts.

Section 195: Payments to Non-Residents Rates in Force
  • Universal Applicability: Applies to all payers, whether resident or non-resident, regardless of whether they have a Permanent Establishment (PE) or business connection in India.
  • Chargeability Test: TDS is deductible only on sums chargeable to income tax under the Act. Payer can apply u/s 195(2) or 195(3) for nil/lower deduction certificates.
  • Demurrage Exemption: Demurrage charges paid to non-resident shipping companies covered by Section 172 are exempt from TDS u/s 195.
  • Overseas Selling Agents: Commission paid to foreign agents operating strictly outside India without any Indian business operations is not taxable in India and requires no TDS.

⏱️ Interest Computation under Section 201(1A)

Strict liability interest framework for late deduction and late deposit of TDS. Non-discretionary, mandatory, and automatic.

Section 201(1A) Mandatory Statutory Interest Matrix Strict Liability

Interest under Section 201(1A) is automatic, compensatory, and mandatory. It cannot be waived on grounds of bona fide dispute, absence of willful default, or administrative delay.

Late Deduction (Sec 201(1A)(i))
1% per month
Charged for every month or part of a month from the date on which tax was deductible to the date on which tax is actually deducted.
Late Deposit / Payment (Sec 201(1A)(ii))
1.5% per month
Charged for every month or part of a month from the date on which tax was deducted to the date on which tax is actually paid to the Central Government.
💡 Rule of Thumb for CA Exams: Any fraction of a month is treated as a full month. For example, a delay of 1 month and 2 days is calculated as 2 full months.