Introduction
TDS Rate Chart FY 2026–27
TDS on Interest & Dividend
TDS on Winnings & Special Income
TDS on Property & Compensation
TDS on Individual Payments
TDS on Non-Resident Payments
Special TDS Provisions
TDS Threshold Limits
Key Changes FY 2026–27
TDS Compliance Requirements
Simplify TDS with e-TDS Software
Conclusion
TDS FAQs
Related Links
Tax Deducted at Source (TDS) is a mechanism where tax is deducted by the payer at the time of making specified payments such as salary, rent, commission, interest, or professional fees and deposited with the Government on behalf of the payee. That is why understanding FY 26-27 TDS rate chart and applicable TDS threshold limits are essential for accurate tax compliance and avoiding interest, penalties, or notices from the Income Tax Department.
TDS Rate Chart for FY 2026–27 (AY 2027–28)
(As per Income-tax Act, 1961 & amendments by Finance Act 2024)
Most Common TDS Sections (Quick Reference)
| Section | Nature of Payment | Threshold Limit | TDS Rate |
|---|---|---|---|
| 192 | Salary | Basic exemption limit | As per income tax slab |
| 194C | Contractor / Sub-contractor | ₹30,000 single / ₹1,00,000 yearly | 1% (Ind/HUF), 2% (Others) |
| 194H | Commission / Brokerage | ₹20,000 | 2% |
| 194J | Commission / Brokerage | ₹30,000 | 10% |
| 194J | Technical services / royalty | ₹30,000 | 2% |
| 194I(a) | Rent — Plant & Machinery | ₹2,40,000 yearly | 2% |
| 194I(b) | Rent — Land/Building/Furniture | ₹2,40,000 yearly | 10% |
| 194IA | Purchase of immovable property | ₹50 lakh | 1% |
| 194IB | Rent by Individual/HUF | ₹50,000 per month | 2% |
| 194M | Payment by Individual/HUF | ₹50 lakh | 2% |
| 194Q | Purchase of goods | ₹50 lakh | 0.1% |
| 194R | Benefits / perquisites | ₹20,000 | 10% |
| 194S | Virtual digital assets (crypto) | ₹10,000 / ₹50,000 | 1% |
TDS Rate of Interest, Dividend & Investment Income
| Section | Nature of Payment | Threshold | TDS Rate |
|---|---|---|---|
| 193 | Interest on securities | ₹10,000 | 10% |
| 194 | Dividend | ₹10,000 | 10% |
| 194A | Bank interest | ₹50,000 (₹1 lakh for senior citizens) | 10% |
| 194A | Other interest | ₹10,000 | 10% |
| 194K | Mutual fund income | ₹10,000 | 10% |
TDS Rate of Winnings & Special Income
| Section | Nature of Payment | Threshold | TDS Rate |
|---|---|---|---|
| 194B | Lottery winnings | ₹10,000 | 30% |
| 194BA | Online gaming winnings | Nil | 30% |
| 194BB | Horse race winnings | ₹10,000 | 30% |
Also Read:- TDS Reconciliation with Form 26AS
TDS Rate of Property & Compensation
| Section | Nature of Payment | Threshold | TDS Rate |
|---|---|---|---|
| 194LA | Land acquisition compensation | ₹5 lakh | 10% |
| 194IC | Joint Development Agreement | No limit | 10% |
TDS Rate of Individual Payments & New Provisions
| Section | Nature of Payment | Threshold | TDS Rate |
|---|---|---|---|
| 194D | Insurance commission | ₹20,000 | 2% (Ind/HUF), 10% (Others) |
| 194G | Lottery ticket commission | ₹20,000 | 2% |
| 194T | Payment by firm to partners | ₹20,000 | 10% |
| 194P | Specified senior citizens | — | As per slab |
TDS Rate of Non-Resident Payments
| Section | Nature of Payment | TDS Rate |
|---|---|---|
| 194E | Payment to non-resident sportsman | 20% + surcharge/cess |
| 194LB | Interest on infrastructure debt fund | 5% |
| 194LC | Interest on foreign currency loan | 5% |
| 194LD | Interest on bonds to FII/QFI | 5% |
| 195 | Other payments to non-resident | As per Income-tax Act |
Read in-Depth:- TDS Return Correction Process
TDS Rate of Special Compliance Provisions
| Section | Nature of Payment | TDS Rate |
|---|---|---|
| 206AA | PAN not furnished | Higher of applicable rate or 20% |
| 206AB | Non-filer of ITR | Higher of twice the rate or 5% |
| 194N | Cash withdrawal > ₹1 crore | 2% (higher for non-filers) |
The above TDS rates for FY 2026–27 are based on provisions of the Income-tax Act, 1961 as amended by the Finance Act 2024 and applicable notifications issued by the Government of India. The above tables are updated from the TDS rate chart from FY 2025-2026.
Stay compliant with the latest TDS rates — automate calculation, filing, and corrections using GSTrobo’s e-TDS return filing software for accurate, hassle-free returns.
TDS Threshold Limits — Why They Matter
TDS is required only when payments exceed prescribed thresholds. Failure to deduct TDS after crossing the limit can result in:
- Interest liability
- Penalties
- Disallowance of expenses
- Compliance notices
Businesses must monitor cumulative payments throughout the financial year.
Also Read:- Understanding Form 26AS for TDS Matching
Key Changes Applicable for FY 2026–27
The major changes currently applicable arise from amendments introduced through the Finance Act 2024, including:
- Reduction of TDS rates on certain commissions and payments
- Introduction of Section 194T for partner remuneration
- Rationalization of thresholds to reduce compliance burden
- Lower rate for e-commerce transactions
Unless further amended by subsequent Finance Acts, these provisions continue for FY 2026-27.
TDS Compliance Requirements
Key obligations for deductors include:
- Deduct TDS at the time of payment or credit, whichever is earlier
- Deposit TDS within prescribed due dates
- File quarterly TDS returns
- Issue TDS certificates to deductees
- Reconcile with Form 26AS and AIS
Non-compliance may attract interest, penalties, and prosecution.
Simplify TDS Compliance with e-TDS Software
Managing multiple sections, threshold limits, rate changes, corrections, and reconciliation manually can be complex for finance teams.
Modern organizations use automated e-TDS filing software to:
- Calculate TDS accurately
- Validate PAN details
- Generate returns compatible with TRACES
- Manage corrections and revisions
- Reconcile with Form 26AS
- Maintain audit-ready records
Explore GSTrobo e-TDS Return Filing Software to streamline TDS compliance and reduce risk.
Conclusion
The TDS rate chart for FY 2026–27 provides a comprehensive overview of applicable TDS rates in India across various payment categories along with threshold limits and compliance provisions.
Staying updated with the latest TDS rates is essential for accurate tax compliance, avoiding penalties, and maintaining smooth financial operations.
Eliminate TDS Risk. Ensure Accurate Compliance.
Expert tax help, just a click away. Stay compliant with the latest TDS rates with support from our specialists.
Frequently Asked Questions (FAQs)
The TDS rate chart lists applicable tax deduction rates under various sections of the Income-tax Act for different types of payments during the financial year.
Most rates applicable in FY 2026-27 arise from amendments introduced through the Finance Act 2024 and continue unless revised in later budgets.
TDS on rent is generally:
> 2% for plant and machinery
> 10% for land or building
> 2% for rent paid by individuals exceeding ₹50,000 per month under Section 194IB
TDS must be deducted at a higher rate under Section 206AA — either 20% or the applicable rate, whichever is higher.
TDS as per Section 194C is 1% in case the contractor or sub-contractor is an individual or an HUF. It is 2% in all other cases besides an individual or HUF.
TDS rate is 2% on various transactions as per different sections, including Section 194D, 194N, 194G, and more.
No. TDS is not always 10%. It actually differs as per the payment classification.
Section 195 mandates TDS on sums payable to NRIs or foreign entities under the Income Tax Act 1961.
Related links
Union Budget | GST Changes | TRACES Reconciliation | Form 26AS
