Does the TDS rate vary for different types of income?

Yes, the TDS rate varies for different types of income under Indian tax laws, and the rates and threshold limits have been updated effective from April 1, 2025, for FY 2025-26 (AY 2026-27).

Here’s a summary of key TDS rates and thresholds applicable to various income types for payments made to residents:

Key points:

• TDS is deducted only if the payment exceeds the specified threshold limit.
• Senior citizens enjoy higher exemption limits on interest income (₹1 lakh vs ₹50,000 for others).
• Rates differ widely by income type—e.g., 30% on lottery winnings, 10% on dividends and interest, 2% on commissions and insurance.
• For salary, TDS is deducted as per the individual’s income tax slab.
• If PAN is not provided, TDS is generally deducted at a higher rate (20% or as per law).

These updated rates and thresholds aim to reduce compliance burden on small payments and provide relief to taxpayers while ensuring tax collection at source.

You can use the online TDS calculator to know how your TDS is calculated, based on your income slab.