Union Budget 2025-26 (Full) + Finance Bill, 2025

II. Rates for deduction of income-tax at source during the financial year (FY) 2025-26 from certain incomes other than “Salaries”.

The rates for deduction of income-tax at source during the FY 2025-26 under the provisions of section 193, 194A, 194B, 194BB, 194D, 194LBA, 194LBB, 194LBC and 195 have been specified in Part II of the First Schedule to the Bill.

2. It is proposed that the rates in force for deduction of income-tax at source on income by way of insurance commission shall be reduced from 5% to 2%, in view of the amendments made vide Finance (No. 2) Act, 2024 in section 194D (Payment of insurance commission) with effect from 1st day of April, 2025.

3. For sections specifying the rate of deduction of tax at source, the tax shall continue to be deducted as per the provisions of the relevant sections of the Act.

4. Apart from the above, the rates will remain the same as those specified in Part II of the First Schedule to the Finance (No. 2) Act, 2024, for the purposes of deduction of income-tax at source during the FY 2024-25.

6. The surcharge on the amount of income-tax for the purposes of the Union is the same as that specified for the FY 2024-25.

7. “Health and Education Cess” shall continue to be levied at the rate of four per cent. of income tax including surcharge wherever applicable, in the cases of persons not resident in India including company other than a domestic company.

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

Deduction of income-tax at source: insurance commission TDS rate reduced, other TDS rates and surcharges largely retained Deduction of income-tax at source for FY 2025-26 is set out in Part II of the First Schedule to the Finance Bill, 2025, with section-specific provisions continuing to govern TDS mechanics. The rate for taxation of insurance commission is reduced pursuant to amendments in the Finance (No. 2) Act, 2024 effective from 1 April 2025. Other TDS rates remain as specified in the prior Act, surcharge treatment is unchanged, and Health and Education Cess is levied at four per cent on income-tax including surcharge where applicable for non-residents and non-domestic companies.