# Smart Summary of TDS Rates

Understanding the rate applicable under each TDS section is critical. Rates are grouped by the percentage applied. Unless specifically mentioned, the rate is applied on the whole amount and where PAN is not furnished, the rate becomes 20% (Sec 206AA).

## Rate-wise Classification

### 0.1% — Section 194Q

Applied on excess over limit (i.e., purchase value exceeding the threshold)
If no PAN: 5%

### 1% — Section 194-IA (Transfer of Immovable Property)

Applied on the whole consideration

### 2%

Section 194C (Individual / HUF payee)
Section 194N — applied on excess over limit (limit normally ₹1 Cr)
Section 194-I (Plant & Machinery)

### 5%

Section 194N where withdrawal exceeds limit and limit is ₹20 lakhs (for non-filer)
Section 194C (Others — non-individual/HUF payees)
Section 194J for: FTS, Non-professional services, Call centre, Royalty on films
Section 194DA, 194G, 194H, 194-IB, 194M

### 10%

Section 192A (EPF — premature withdrawal); No PAN → 20%
Section 194-I (Building, land, furniture)
Section 194J (Professional services — general)
Section 193, 194 (Interest on securities, Dividend)
Section 194A (Interest other than on securities)
Section 194K (Income from MF units)
Section 194LA (Compensation on compulsory acquisition)
Section 194R (Benefits/Perquisites in business)

### 30% — Winnings

Section 194B (Lottery, crossword puzzles, card games)
Section 194BB (Horse race winnings)

### Slab Rate

Section 192 (Salary)
Section 194P (TDS by specified bank for senior citizens aged 75+)

## Threshold from which TDS becomes Deductible (key special limits)

192A — Threshold: ₹50,000 or more (EPF premature withdrawal)
194DA — ₹1,00,000 or more (Maturity proceeds of LIP)
194-IA — ₹50,00,000 or more (Sale of immovable property)

Worked example

### Example 1

Q: ABC Ltd makes a payment of ₹2,00,000 to an individual contractor Mr. P who does not furnish PAN. Compute TDS.

Solution: Section 194C applies. Normally for individuals/HUF the rate is 1%. But under Sec 206AA, since PAN not furnished, the rate is higher of (a) Rate under section = 1%, or (b) 20%. Hence TDS = 20% × ₹2,00,000 = ₹40,000.

### Example 2

Q: Mr. X purchases immovable property for ₹60,00,000 from a resident. Compute TDS u/s 194-IA.

Solution: Threshold of ₹50,00,000 is crossed; TDS applies on entire ₹60,00,000 at 1% = ₹60,000.

⚠️ Common exam mistakes

Forgetting that under Sec 206AA, the no-PAN rate is 20% — but for Sec 194Q the no-PAN rate is specifically 5%, not 20%.
Applying TDS only on the excess over threshold for sections like 194-IA (TDS is on full amount once threshold of ₹50 lakhs is crossed) — only 194Q and 194N are on the excess.
Confusing 194-I rates: Plant & Machinery is 2%, Land/Building/Furniture is 10%.
Confusing 194J 10% (professional) vs 194J 2% rates (FTS, non-professional/call centre/film royalty).

Reference:

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TDS Rate Summary by Section

Worked example

⚠️ Common exam mistakes