TDS Rates Chart for FY 2026-27 as per New Income Tax Act, 2025
Check the applicable rate, threshold, payer and payee condition, and the correct new section reference for salary, interest, rent, contracts, professional fees, property, VDA, winnings and non-resident payments.
What changed in the TDS rate chart?
The rates and monetary thresholds were retained, but the statutory references changed from 1 April 2026. Salary TDS is now organised under Section 392. Other TDS provisions are consolidated in Section 393 through resident, non-resident and any-payee tables. Use the date of credit or payment, whichever occurs first, to decide whether the 1961 Act or the 2025 Act applies.
Page contents
TDS under the Income Tax Act, 2025
The Income Tax Act, 2025 applies from 1 April 2026. It replaces the long sequence of familiar TDS sections with a compact structure, without asking businesses to relearn the commercial meaning of every payment.
Section 392 covers salary and specified accumulated fund payments. Section 393(1) covers payments to residents, Section 393(2) covers specified payments to non-residents, and Section 393(3) covers payments where the rule applies regardless of the payee's residential status.
The older labels such as 194C, 194J and 194H still help accountants recognise the payment category, so this page shows both references. For a transaction governed by the new Act, however, the relevant Section 393 table item is the reporting reference. A business that deducts tax also needs a valid TAN; companyji's PAN and TAN application service can help where registration or correction is pending.
Which Act applies around 1 April 2026?
Look at the earlier of credit or payment. The invoice date alone does not decide the governing Act, and paying an old liability in April does not automatically convert it into a new-Act transaction.
Income-tax Act, 1961
If the earlier credit or payment event occurred on or before 31 March 2026, use the old Act section and the old return or challan framework for that transaction.
Income Tax Act, 2025
If the earlier event occurred on or after 1 April 2026, use Section 392 or the correct Section 393 table item and the new prescribed form.
March booking, April payment
A professional fee credited to the consultant's ledger on 30 March 2026 and paid on 10 April 2026 remains governed by old Section 194J because credit occurred first. An April invoice credited and paid after 1 April uses Section 393(1), Table serial 6(iii).
How to select the correct TDS rate
The percentage is the final step. First classify the payment and verify who is paying, who is receiving, whether the threshold has been crossed, and whether a special certificate or treaty applies.
Classify
Salary, interest, contract, professional fee, rent, property, commission, VDA or another specified payment.
Identify payee
Resident, non-resident, company, individual, HUF, firm or a specially defined person.
Test payer
Check turnover, tax-audit status, individual or HUF exceptions, and transaction-specific responsibility.
Test threshold
Apply single-payment, monthly or annual aggregate limits exactly as the relevant table item requires.
Verify rate
Check PAN, lower-deduction certificate, Form 121 declaration, treaty documents and surcharge or cess.
Individuals and HUFs do not automatically escape TDS. Their responsibility can arise from business turnover, specified rent, property, contractor or professional payments, and VDA transactions. The prior-year turnover check often depends on whether the payer was within the tax audit framework.
Most-used TDS rates for FY 2026-27
These are the payment categories most businesses encounter. The full charts below contain the payer conditions, detailed thresholds and new section mapping.
Contract payments
1% where the contractor payee is an individual or HUF; 2% for other payees. Threshold: Rs. 30,000 per transaction or Rs. 1,00,000 aggregate.
Professional and technical fees
10% for professional services and most royalty; 2% for technical services, call centres and specified film royalty. Threshold: generally Rs. 50,000.
Rent
10% for land, building, furniture or fittings; 2% for plant, machinery or equipment. The general threshold is Rs. 50,000 per month.
Purchase of goods
Applicable to the amount above Rs. 50 lakh where the buyer's preceding-year business turnover exceeded Rs. 10 crore, subject to exclusions.
TDS rates for resident payees in FY 2026-27
Use the new reference for transactions whose earlier credit or payment event falls on or after 1 April 2026. The old section is shown only as a recognition aid.
Threshold wording is simplified for quick reference. Read the payer, payee and payment conditions together; special exclusions and certificates can change the result.
| Old reference | New Act reference | Nature of payment | Threshold for FY 2026-27 | TDS rate | Important condition |
|---|---|---|---|---|---|
| 192 | Section 392 | Salary | Estimated taxable salary | Slab rate | Employer computes annual salary tax after regime, relief and eligible deductions. |
| 192A | Section 392 | Taxable EPF withdrawal | Rs. 50,000 | 10% | Applies to taxable accumulated balance paid under the EPF framework. |
| 194D | 393(1), Table 1(i) | Insurance commission | Rs. 20,000 | 2% / 10% | 2% for a recipient other than a company; rate in force is 10% for a domestic company. |
| 194H | 393(1), Table 1(ii) | Commission or brokerage | Rs. 20,000 | 2% | Individual/HUF payer condition generally depends on preceding-year business turnover. |
| 194-IB | 393(1), Table 2(i) | Rent by specified individual or HUF | Rent above Rs. 50,000 per month | 2% | For an individual/HUF not required to deduct under the general rent item; reported through Form 141. |
| 194-I | 393(1), Table 2(ii) | Rent of plant, machinery or equipment | Rs. 50,000 per month | 2% | General rent deduction for covered payers. |
| 194-I | 393(1), Table 2(ii) | Rent of land, building, furniture or fittings | Rs. 50,000 per month | 10% | Classify composite rent by the substance of the arrangement. |
| 194-IA | 393(1), Table 3(i) | Purchase of immovable property other than agricultural land | Consideration and stamp-duty value: Rs. 50 lakh or more | 1% | Deduct on consideration or stamp-duty value, whichever is higher; use Form 141. |
| 194-IC | 393(1), Table 3(ii) | Monetary consideration under specified development agreement | No monetary threshold | 10% | Applies to the cash component under a covered joint development agreement. |
| 194-LA | 393(1), Table 3(iii) | Compensation for compulsory acquisition of immovable property | Rs. 5,00,000 | 10% | Agricultural land and other statutory exclusions require separate review. |
| 194K | 393(1), Table 4(i) | Income from mutual fund or UTI units | Rs. 10,000 | 10% | Applies to covered income distribution, not every redemption receipt. |
| 194-LBA | 393(1), Table 4(ii) | Specified income distributed by business trust | No monetary threshold | 10% | Nature of the underlying distribution matters. |
| 194-LBB | 393(1), Table 4(iii) | Non-exempt income from investment fund | No monetary threshold | 10% | Resident unit-holder payment covered by the table item. |
| 194-LBC | 393(1), Table 4(iv) | Income from securitisation trust | No monetary threshold | 10% | Resident investor rate; non-resident treatment appears in Section 393(2). |
| 193 | 393(1), Table 5(i) | Interest on securities | Generally Rs. 10,000 | 10% | Security type and payee exceptions must be checked. |
| 194A | 393(1), Table 5(ii) | Bank, co-operative bank or post-office interest | Rs. 50,000; Rs. 1,00,000 for senior citizen | 10% | Aggregate interest with the relevant payer for the tax year. |
| 194A | 393(1), Table 5(iii) | Other interest | Rs. 10,000 | 10% | Applies to covered non-bank interest payments. |
| 194C | 393(1), Table 6(i) | Contract, sub-contract or job work | Rs. 30,000 single payment or Rs. 1,00,000 aggregate | 1% / 2% | 1% for individual/HUF payee; 2% for other payees. |
| 194M | 393(1), Table 6(ii) | Specified individual/HUF payment for contract, commission or professional service | Rs. 50,00,000 | 2% | For an individual/HUF not otherwise covered; use Form 141. |
| 194J | 393(1), Table 6(iii) | Technical services, call centre, specified film royalty | Rs. 50,000 | 2% | The agreement and real nature of service decide whether 2% or 10% applies. |
| 194J | 393(1), Table 6(iii) | Professional services, other royalty, non-compete or know-how restriction | Rs. 50,000 | 10% | Director fees attract TDS without the monetary threshold. |
| 194 | 393(1), Table 7(i) | Dividend by domestic company | Rs. 10,000 for resident individual; otherwise check payee rule | 10% | Valid declarations, exemptions or lower-rate certificates may apply. |
| 194DA | 393(1), Table 8(i) | Taxable income component of life-insurance payout | Rs. 1,00,000 | 2% | Deduction is on the income component where the policy proceeds are taxable. |
| 194Q | 393(1), Table 8(ii) | Purchase of goods | Amount above Rs. 50,00,000 | 0.1% | Buyer turnover in preceding year must exceed Rs. 10 crore; interaction with other provisions matters. |
| 194P | 393(1), Table 8(iii) | Specified senior citizen income through specified bank | Taxable income computation | Slab rate | For eligible resident senior citizen aged 75 or more meeting all statutory conditions. |
| 194R | 393(1), Table 8(iv) | Business or professional benefit or perquisite | Rs. 20,000 | 10% | Payer must ensure tax is paid even where the benefit is wholly or partly in kind. |
| 194O | 393(1), Table 8(v) | E-commerce operator payment to participant | Rs. 5,00,000 for eligible individual/HUF; otherwise no threshold | 0.1% | Threshold benefit requires the prescribed identity information. |
| 194S | 393(1), Table 8(vi) | Transfer of virtual digital asset | Rs. 50,000 for specified person; Rs. 10,000 otherwise | 1% | Specified PAN-based transactions may be reported through Form 141. |
Unsure whether a vendor invoice is contract, technical or professional?
A classification review before payment is usually faster than repairing a wrong rate and return code later.
TDS rates that apply to any payee
This table covers categories where the deduction rule is framed for any payee rather than only a resident or a non-resident. Verify the precise trigger because several thresholds operate per transaction, per withdrawal or on net winnings.
| Old reference | New Act reference | Nature of payment | Threshold or trigger | TDS rate | Practical note |
|---|---|---|---|---|---|
| 194B | 393(3), Table 1 | Lottery, crossword, card game, gambling or betting winnings | Rs. 10,000 for each covered payment | 30% | Tax may need to be ensured before releasing a prize in kind. |
| 194BA | 393(3), Table 2 | Net winnings from online games | Net winnings at withdrawal and year-end | 30% | Apply the prescribed net-winnings computation. |
| 194BB | 393(3), Table 3 | Horse-race winnings | Rs. 10,000 aggregate in tax year | 30% | Applies to covered bookmaker or licence-holder payments. |
| 194G | 393(3), Table 4 | Commission on sale of lottery tickets | Rs. 20,000 | 2% | Separate from tax on the winner's prize. |
| 194N | 393(3), Table 5 | Cash withdrawal by regular filer | Above Rs. 1 crore; Rs. 3 crore for co-operative society | 2% | Bank, co-operative bank or post office deducts on the excess. |
| 194N | 393(3), Table 5 | Cash withdrawal where prescribed return-filing condition is not met | Above Rs. 20 lakh | 2% / 5% | 2% on the covered band up to Rs. 1 crore and 5% above Rs. 1 crore, subject to the current rule. |
| 194EE | 393(3), Table 6 | Specified National Savings Scheme amount | Rs. 2,500 | 10% | Applies to specified payments from the covered scheme. |
| 194T | 393(3), Table 7 | Salary, remuneration, commission, bonus or interest paid by firm to partner | Rs. 20,000 aggregate | 10% | Includes credit to the partner's account and relevant suspense accounts. |
TDS rates for specified non-resident payments
Non-resident withholding needs a second layer of review. The rate in the Act or Finance Act, treaty entitlement, tax residency certificate, Form 10F or its current equivalent, permanent-establishment position, surcharge and health and education cess can affect the final withholding.
| Old reference | New Act reference | Nature of payment | Base rate | Review before payment |
|---|---|---|---|---|
| 194E | 393(2), Table 1 | Specified income of non-resident sportsperson or sports association | 20% | Add applicable surcharge and cess where domestic-law rate is used. |
| 194LC | 393(2), Table 2 | Interest on approved foreign-currency borrowing | 5% | Confirm borrowing, agreement and approval conditions. |
| 194LC | 393(2), Table 3 | Interest on specified rupee-denominated bond issued outside India | 5% | Check instrument and issue-date eligibility. |
| 194LC | 393(2), Table 4 | Interest on specified rupee bond listed on recognised IFSC exchange | 4% / 9% | 4% for qualifying bonds issued before 1 July 2023; 9% for the specified later issue category. |
| 194LB | 393(2), Table 5 | Interest from infrastructure debt fund | 5% | Confirm fund and income eligibility. |
| 194LBA | 393(2), Table 6 | Specified interest distributed by business trust | 5% | Underlying income character controls the rate. |
| 194LBA | 393(2), Table 6 | Specified dividend distributed by business trust | 10% | Check whether the distribution is taxable and treaty treatment. |
| 194LBA | 393(2), Table 7 | Specified rent or other business-trust distribution | Rates in force | Determine payee type and Finance Act rate. |
| 194LBB | 393(2), Table 8 | Non-exempt income from investment fund | Rates in force | Income composition and payee status matter. |
| 194LBC | 393(2), Table 9 | Income from securitisation trust | Rates in force | Apply relevant Finance Act and treaty analysis. |
| 196A | 393(2), Table 10 | Specified mutual fund or UTI unit income | 20% | A lower treaty rate may apply with complete documentation. |
| 196B | 393(2), Table 11 | Specified income of offshore fund from units | 10% | Confirm offshore-fund and unit conditions. |
| 196B | 393(2), Table 12 | Long-term capital gain of offshore fund from covered units | 12.5% | Apply capital-gain computation and treaty provisions. |
| 196C | 393(2), Table 13 | Interest or dividend from specified foreign-currency bonds or GDRs | 10% | Confirm qualifying security and recipient. |
| 196C | 393(2), Table 14 | Long-term capital gain from specified bonds or GDRs | 12.5% | Check transaction date, asset and treaty position. |
| 196D | 393(2), Table 15 | Specified securities income of FII | 20% | Lower treaty rate may apply where legally available. |
| 196D | 393(2), Table 16 | Specified securities income of Category III AIF in IFSC | 10% | Confirm fund, unit and IFSC conditions. |
| 195 | 393(2), Table 17 | Other interest or sum chargeable to tax paid to non-resident | Rates in force / DTAA | Determine chargeability, income character, treaty documents, beneficial ownership, PE and gross-up before remittance. |
Do not use a flat 20% rule for every foreign payment
Section 393(2), the Finance Act and an applicable tax treaty must be read together. Remittance documentation and a lower or nil deduction certificate can be as important as the headline rate.
TDS statements and Form 141 mapping
The new Act changes form numbers as well as section references. Form 141 combines four transaction-specific challan-cum-statements that were separate under the 1961 Act.
| Purpose | Old form | New form | Section 2025 reference | Who commonly files |
|---|---|---|---|---|
| Salary TDS quarterly statement | Form 24Q | Form 138 | Section 392 / prescribed statement | Employer and specified bank, as applicable |
| Resident non-salary TDS quarterly statement | Form 26Q | Form 140 | Section 393 resident or any-payee reporting | Company, firm, government body or other covered deductor |
| Rent by specified individual/HUF | Form 26QC | Form 141, Schedule A | 393(1), Table 2(i) | Individual/HUF tenant outside general rent deduction |
| Purchase of immovable property | Form 26QB | Form 141, Schedule B | 393(1), Table 3(i) | Property buyer |
| Individual/HUF contractor, commission or professional payment | Form 26QD | Form 141, Schedule C | 393(1), Table 6(ii) | Specified individual/HUF payer |
| Specified VDA transaction | Form 26QE | Form 141, Schedule D | 393(1), Table 8(vi) | Specified PAN-based payer |
| Nil-tax declaration by eligible payee | Forms 15G / 15H | Form 121 | Section 393(6) | Eligible declarant through payer process |
Form 141 is not one combined return for unrelated transactions. Select the relevant schedule and file separate statements where the transaction type or deductor requirement differs. The Income Tax Department states that the form is filed through the PAN login and that TAN is not required for the specified PAN-based cases.
TDS due dates for Tax Year 2026-27
The Income Tax Rules, 2026 retain the familiar deposit timetable. Build the calendar from the deduction date, not from the invoice date or the day the accountant closes the month.
| Compliance | Period or transaction | Due date | Working rule |
|---|---|---|---|
| TDS deposit by non-government deductor | April to February deductions | 7th of following month | Deposit through the applicable new-Act payment flow. |
| TDS deposit by non-government deductor | March 2027 deduction | 30 April 2027 | March has a separate year-end deposit deadline. |
| Form 141 challan-cum-statement | Property, specified rent, individual/HUF service payment or VDA | Within 30 days from month-end | Count from the end of the month in which tax was deducted. |
| Quarterly TDS statement | Q1: April to June 2026 | 31 July 2026 | Use the current Form 138, 140 or other prescribed statement. |
| Quarterly TDS statement | Q2: July to September 2026 | 31 October 2026 | Reconcile challans, PAN and section table items before upload. |
| Quarterly TDS statement | Q3: October to December 2026 | 31 January 2027 | Resolve short deduction and unmatched challans before filing. |
| Quarterly TDS statement | Q4: January to March 2027 | 31 May 2027 | Include year-end provisions where credit triggered deduction. |
TDS is not advance tax. TDS is withheld by a payer from a specified payment; advance tax is paid by the taxpayer on estimated income. Businesses may have both obligations. See companyji's advance tax service for instalment planning.
Higher, lower and nil TDS rates
A rate chart assumes the basic documents are in order. Before applying it, verify PAN status and every valid declaration or certificate available on the date of deduction.
General no-PAN floor
Section 397(2) generally requires the highest of the applicable provision rate, the rate in force, or 20% when the recipient does not furnish PAN.
Goods and e-commerce exception
For Section 393(1), Table 8(ii) purchase of goods and Table 8(v) e-commerce, the statutory substitute floor is 5% rather than 20%.
Assessing Officer certificate
A valid lower or nil deduction certificate applies at the authorised rate and for the stated payment, payer, payee and period.
Form 121 declaration
An eligible payee may furnish the prescribed declaration where estimated total tax is nil, subject to Section 393(6), Rule 211 and payment-specific eligibility.
Check the effective PAN, not only the printed number
A mistyped, invalid or inoperative PAN can affect rate and statement processing. Validate vendor masters before the first payment of the year and again when identity or constitution changes.
TDS calculation examples for FY 2026-27
Rs. 1,40,000 paid to an individual contractor
The annual threshold is crossed. At 1%, TDS is Rs. 1,400, assuming valid PAN and no lower-rate certificate. Report under Section 393(1), Table 6(i).
Rs. 80,000 paid to a resident CA firm
The professional-fee threshold is crossed. At 10%, TDS is Rs. 8,000, assuming the payment is genuinely professional service and normal rate applies.
Flat bought for Rs. 72 lakh; stamp value Rs. 76 lakh
Subject to detailed conditions, 1% is computed on the higher Rs. 76 lakh amount, giving Rs. 76,000. The buyer uses Form 141, Schedule B.
Office rent of Rs. 65,000 per month
For a covered general deductor and land/building rent, the 10% rate applies. The timing and amount deducted follow the credit-or-payment rule and year-end provisions.
Eligible buyer purchases Rs. 68 lakh from one vendor
At 0.1% on the Rs. 18 lakh excess over Rs. 50 lakh, TDS is Rs. 1,800, subject to the buyer-turnover test and interaction with other provisions.
Firm credits Rs. 3 lakh remuneration to a partner
At 10%, TDS is Rs. 30,000 once the aggregate threshold is crossed. Report under Section 393(3), Table 7.
Rates should never be selected from the narration alone. For example, “consultancy” may be professional service, technical service, a contract for work or a composite arrangement. Keep the agreement, invoice, work scope, residency evidence and rate note together.
Late deduction, late deposit and wrong section mapping
A correct percentage can still produce a defective compliance trail when tax is deducted late, deposited against the wrong year, filed with the wrong table item or not matched to the payee's PAN.
Failure to deduct on time
Interest is generally charged at 1% per month or part of a month from the date tax was deductible to the date it is actually deducted.
Failure to deposit after deduction
Interest is generally charged at 1.5% per month or part of a month from deduction to actual government payment.
Business expense disallowance
Section 35(b) of the 2025 Act can disallow 30% of a resident payment where required TDS was not deducted or deposited within the prescribed return-linked time.
Wrong old section after 1 April
Using old labels instead of the new Section 393 table item may create validation or processing errors and require a correction statement.
PAN or challan mismatch
A valid deduction may not appear correctly in the payee's tax record until the deductor corrects PAN, amount, period, challan or table-item data.
Ignoring a tax communication
Short-deduction, late-payment and statement mismatches should be reconciled before responding. companyji can assist with an income tax notice reply.
Payees should reconcile the new Tax Year statement and their records before filing. Where tax deducted exceeds final liability, credit is claimed through the applicable income tax filing process. A mismatch usually needs correction by the deductor rather than a second payment by the payee.
TDS vs professional tax and income tax
TDS is a central income-tax withholding mechanism. Professional tax is a state levy on professions, trades, callings and employment, while income tax is the final tax computed on taxable income after credits.
| Levy | Who handles it | What triggers it | Where companyji can help |
|---|---|---|---|
| TDS | Payer deducts and reports | Specified payment, threshold and payer/payee conditions | Rate review, deduction, deposit, statement and correction |
| Income tax | Taxpayer computes final liability | Taxable income for the year | Return filing and TDS credit reconciliation |
| Professional tax | Employer or enrolled person under state law | State-specific employment or professional activity | Professional tax registration and West Bengal company registration guidance |
Related income tax and business resources
TDS rates FY 2026-27 FAQs
What is the TDS rate for FY 2026-27?
There is no single rate. Common rates range from 0.1% for covered goods and e-commerce payments to 30% for specified winnings. The nature of payment, threshold, payer, payee, PAN and special documents determine the final rate.
Did TDS rates change under the Income Tax Act, 2025?
The Income Tax Department states that the rates and monetary thresholds were retained. The major change is consolidation under Sections 392 and 393, along with new table references and reporting forms from 1 April 2026.
Which TDS section applies from 1 April 2026?
Section 392 applies to salary and specified fund payments. Section 393 uses separate tables for resident payees, non-resident payees and payments applying to any payee.
Can I quote Section 194C in a FY 2026-27 TDS statement?
For a transaction governed by the 2025 Act, use Section 393(1), Table 6(i). The department warns that using the old section reference after 1 April 2026 can produce validation or processing errors.
What is the TDS threshold for professional fees?
The general threshold is Rs. 50,000 during the tax year. Professional services generally attract 10%; specified technical services and certain related categories attract 2%.
What rate applies to contractor payments?
The general rate is 1% when the contractor payee is an individual or HUF and 2% for other payees. The threshold is generally Rs. 30,000 for a single payment or Rs. 1,00,000 in aggregate.
What is Form 141?
Form 141 is the unified challan-cum-statement for specified rent, property, individual or HUF contractor and professional payments, and VDA transactions under Section 393(1). It replaces old Forms 26QC, 26QB, 26QD and 26QE for new-Act transactions.
When must TDS be deposited?
A non-government deductor generally deposits April-to-February TDS by the seventh day of the following month and March TDS by 30 April. Form 141 cases are generally due within 30 days from the end of the month of deduction.
What happens if the payee does not furnish PAN?
Section 397(2) generally applies the highest of the statutory rate, rate in force or 20%. For the specified purchase-of-goods and e-commerce table items, the alternative statutory floor is 5%.
Is cess added to resident TDS rates?
Ordinary resident rates in this chart are base TDS rates without surcharge and health and education cess. Non-resident withholding may require surcharge and cess when the domestic-law rate applies.
Which form replaces Form 24Q and Form 26Q?
Form 138 corresponds to old Form 24Q for salary and specified bank reporting. Form 140 corresponds to old Form 26Q for resident non-salary payments.
How is a wrong TDS section or PAN corrected?
Reconcile the processed statement, challan and deductee record, then file the prescribed correction statement. The exact correction depends on whether the error is in the section table item, PAN, amount, challan or tax year.
Can a startup ignore TDS during its first year?
No. Startup status or DPIIT recognition does not create a general TDS exemption. The company must test each payment, threshold and payer condition from the date business transactions begin.
Can a lower treaty rate be used for a non-resident?
Potentially, but only after confirming treaty eligibility, tax residency certificate, prescribed information, beneficial ownership, permanent-establishment position and the exact income article.
Primary references reviewed
Rates and mappings should be rechecked when a Finance Act, notification, rule, portal utility or court decision changes the applicable position.
Get the rate, section and statement right before the due date.
Share the payment type, agreement, invoice, payee status, PAN, amount and date of credit or payment. A companyji tax expert can help identify the correct rate, new table item, deposit route and statement.
This chart is a general reference, not a substitute for transaction-specific advice. Rates are shown before applicable surcharge and cess unless stated otherwise.