All About TDS Applicability Chart with Case Examples for FY 2025-26

TDS Applicability Chart with Case Examples for FY 2025-26

(01.04.2025)

TDS Applicability – Individuals & HUFs (with Cases)

A. Individuals/HUFs – Subject to Tax Audit in FY 2024-25

Section	Nature of Payment	Threshold	TDS Rate	Applicable in FY 2025-26?	Case Example
194C	Contractor Payment	₹30,000/₹1 lakh	1%	✅ Yes	Mr. A (turnover ₹1.2 Cr) pays ₹90,000 to a contractor. TDS @1%.
194H	Commission	₹15,000	5%	✅ Yes	Mr. B pays ₹25,000 to agent. TDS @5%.
194J	Professional Fees	₹30,000	10% (2% tech fees)	✅ Yes	HUF pays ₹50,000 to a lawyer. TDS @10%.
194I	Rent	₹50,000/month 01.04.25	10%	✅ Yes	Mr. E pays ₹60,000 per month for 3months only for office rent. TDS @10%.
194IB	Rent	₹50,000/month	5% → 2% (Oct’24)	❌ No (194I applies)	Mr. F pays ₹60,000/month. 194I applies, TDS @10%.
194M	Contract/Commission /Professional Fees	₹50 lakh/year	5% → 2% (Oct’24)	❌ No (194C/194J apply)	Mr. G pays ₹55 lakh – 194J applies instead.

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B. Individuals/HUFs – NOT Subject to Tax Audit in FY 2024-25

Section	Nature of Payment	Threshold	TDS Rate	Applicable in FY 2025-26?	Case Example
194C	Contractor Payment	₹30,000/₹1 lakh	1%	❌ No	Mr. C (turnover ₹35L) pays ₹90,000 to contractor. No TDS.
194H	Commission	₹15,000	5%	❌ No	Mr. D pays ₹20,000 to broker. No TDS.
194J	Professional Fees	₹30,000	10% (2% tech fees)	❌ No	Mr. E pays ₹40,000 to tax advisor. No TDS.
194I	Rent	₹50,000/month 01.04.25	10%	❌ No	Mr. F pays ₹25,000/month. No TDS.
194IB	Rent	₹50,000/month	5% → 2% (Oct’24)	✅ Yes	Mr. G pays ₹55,000/month. TDS @ 2%.
194M	Contract/Commission /Professional Fees	₹50 lakh/year	5% → 2% (Oct’24)	✅ Yes	Mr. H pays ₹52 lakh to architect. TDS @2%

Basic Rule:- TDS by Ind./HUF is applicable only if their turnover exceeded ₹1 crore (business) or ₹50 lakh (profession) in the preceding FY i.e. 2024-25 under sections 194C, 194H, 194J, 194I.

TDS Applicability – Other than Individuals & HUFs (with Cases)

Section	Nature of Payment	Payer Type	Audit Status	Threshold	TDS Rate	Applicability FY 2025-26	Case Example
194C	Contract payment	XYZ Pvt. Ltd. (Company)	❌ Not relevant	₹30,000 (single)/ ₹1 lakh (annual)	2% (1% if recipient is ind./HUF)	✅ Yes	Pays ₹1.2 lakh to contractor. TDS @2% applies.
194H	Commission/Brokerage	ABC LLP	❌ Not relevant	₹15,000	5%  (2% from 1-Oct-2024)	✅ Yes	Pays ₹20,000 commission to agent. TDS @5% applies.
194J	Professional/technical fees	MNO Firm	❌ Not relevant	₹30,000	10% (2% for tech services)	✅ Yes	Pays ₹80,000 to CA for tax audit. TDS @10% applies.
194I	Rent	PQR Pvt. Ltd.	❌ Not relevant	₹50,000/-Per month 01.04.2025	10% (building/land)	✅ Yes	Pays office rent of ₹55,000/month or (even in any month) TDS @10% applies.
194A	Interest (non-bank)	RST LLP	❌ Not relevant	₹5,000	10%	✅ Yes	Pays ₹60,000 interest to partner. TDS @10% applies.
194-IA	Immovable property purchase	UVW Pvt. Ltd.	❌ Not relevant	₹50,00,000	1%	✅ Yes	Buys land for ₹65 lakh. TDS @1% on ₹65 lakh.
194-O	E-commerce sales payout	Flipkart Ltd. (ECO)	❌ Not relevant	*> ₹5 lakh (Ind./HUF) * for other no threshold	1% (0.1% after 01-Oct-2024)	✅ Yes	Pays ₹3 lakh to seller (a firm). TDS @1% applies.
192	Salary	XYZ Pvt. Ltd.	❌ Not relevant	Based on slab	Slab rates	✅ Yes	Pays salary of ₹15 lakh to employee. TDS per slab.

Basic Rule:- Companies, LLPs, firms  (i.e. person other than Individual/HUF) → Must deduct TDS regardless of turnover or audit.

TDS Applicability – 194-IA, 194-IB, 194M, and 194O apply regardless of audit status if monetary conditions are met with cases)

Section	Nature of Payment	Who is the Payer?	Audit Status (FY 2024-25)	Threshold Limit	TDS Rate	Applicable in FY 2025-26?	Case Example
194-IA	Property Purchase	Any person	❌ Not relevant	> ₹50 lakh	1%	✅ Yes	Buys flat for ₹60 lakh. TDS @1% on ₹60 lakh
194-IB	Rent	Mr. A (Individual/HUF only)	❌ Not audited (For Audit Case- go u/s 194-I)	> ₹50,000/month	5% (2% from 1.10.2024)	✅ Yes	Pays ₹55,000/month rent. TDS @2%.
194M	Contractual/professional fee	Mr. A (Individual)	❌ Not audited (For Audit Case- go u/s 194-C/H/J)	> ₹50 lakh/year	5% (2% from 1.10.2024)	✅ Yes	Pays ₹52 lakh to interior decorator. TDS @2%
194O	Sale proceeds to seller	Amazon (E-commerce Operator)	❌ Not relevant	*> ₹5 lakh (Ind./HUF) * for other no threshold	1% (0.1% from Oct 2024)	✅ Yes	Amazon credits ₹7 lakh to seller. TDS @0.1% deducted.

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🧾 Summary Notes:

• For Individuals & HUFs, check whether they were audited in FY 2024-25 to know if TDS is applicable in FY 2025-26 under sections 194C, 194H, 194J, 194I.
• Companies, LLPs, firms → Must deduct TDS regardless of turnover or audit.
• Sections 194-IA, 194-IB, 194M, and 194O apply regardless of audit status if monetary conditions are met.

Key Changes in FY 2025–26 as compared with FY 2024-25

Section	Nature of Payment	Threshold	FY 2024‑25 Rate	FY 2025‑26 Rate
194D	Insurance commission	₹15,000	5%	2% (w.e.f. 1-Oct-2024)
194G	Lottery commission	₹15,000	5%	2% (w.e.f. 1-Oct-2024)
194H	Commission / brokerage	₹15,000	5%	2% (w.e.f. 1-Oct-2024)
194IB	Rent by Ind/HUF (not audited)	₹50,000/month	5%	2% (w.e.f. 1-Oct-2024)
194M	Payments by Ind/HUF for contract/professional services	₹50 lakh/year	5%	2% (w.e.f. 1-Oct-2024)
194O	E-commerce payouts to sellers	₹5 lakh/year (Ind/HUF)	1%	0.1% (w.e.f. 1-Oct-2024)
194F	Repurchase of mutual fund / UTI units	No threshold	20%	Omitted w.e.f. 1-Oct-2024

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🔁 Summary of Key Amendments

• Sections 194D, 194G, 194H, 194IB, 194M: Rate reduced from 5% to 2% from 1 October 2024.
• Section 194O: TDS reduced from 1% to 0.1% for e-commerce payouts from 1 October 2024.
• Section 194F: Removed entirely as of 1 October 2024, relieving TDS on mutual fund repurchases.

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✅ Notes

• Other sections like 194C, 194I, 194J, 194A remain unchanged unless noted in further circulars (e.g., Budget 2025 didn’t alter these).
• New section 194T (TDS by firms to partners ≥ ₹20,000/year at 10%) starts 1 April 2025.

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