TDS Rate Chart for FY 2026-27: Updated Rates Under New Income Tax Act
The TDS rate chart for FY 2026-27 (Tax Year 2026-27) reflects the updated section numbers and rates under the new Income-tax Act, 2025 and Income Tax Rules, 2026. With every income tax form renumbered and the Tax Year concept replacing the old Previous Year/Assessment Year terminology, businesses and professionals need an updated reference for all TDS obligations effective April 1, 2026. This comprehensive chart covers rates for salary, interest, rent, professional fees, contractor payments, property sales, e-commerce, cryptocurrency, and NRI payments, with exact thresholds and compliance requirements.
- All TDS sections renumbered under the new Income-tax Act, 2025
- TDS rates range from 1% (property sale) to 30% (NRI income) based on payment type
- Without valid PAN, TDS doubles to the higher of 2x rate or 20%
- Form 16 replaced by Form 130 for salary TDS certificates from April 2026
- Late TDS return filing attracts ₹200/day penalty plus interest at 1.5%/month
What is TDS and Why the 2026-27 Chart Matters
Tax Deduction at Source (TDS) is a mechanism under the Income-tax Act where the payer deducts tax at a specified rate from certain payments (salary, interest, rent, professional fees, etc.) and remits it to the government on behalf of the payee. TDS is administered by the Central Board of Direct Taxes (CBDT) through the Income Tax Department portal.
The FY 2026-27 chart is especially critical because the Income-tax Act, 2025 has renumbered all sections, the Income Tax Rules, 2026 have changed form references, and the new Tax Year concept requires updated compliance templates. Every business, employer, and professional making TDS-applicable payments must reference the correct section numbers and rates from April 1, 2026.
Governed by the Income-tax Act, 2025 (effective April 1, 2026). Rates notified by CBDT via Finance Act/Budget. Administered through www.incometax.gov.in.
Complete TDS Rate Chart for FY 2026-27
The following table covers all major TDS sections applicable for Tax Year 2026-27. Rates apply to resident payees unless otherwise specified. Non-resident rates and surcharge/cess apply additionally for NRI payments.
| Section | Nature of Payment | Threshold (₹/year) | Individual/HUF Rate | Company/Firm Rate |
|---|---|---|---|---|
| 192 | Salary | Basic exemption limit | Slab rates | N/A |
| 193 | Interest on securities | ₹5,000 | 10% | 10% |
| 194A | Interest (other than securities) | ₹40,000 (bank) / ₹5,000 (others) | 10% | 10% |
| 194 | Dividend | ₹5,000 | 10% | 10% |
| 194B | Lottery/Crossword winnings | ₹10,000 | 30% | 30% |
| 194BB | Horse race winnings | ₹10,000 | 30% | 30% |
| 194C | Contractor payments | ₹30,000 single / ₹1,00,000 aggregate | 1% | 2% |
| 194D | Insurance commission | ₹15,000 | 5% | 10% |
| 194DA | Life insurance maturity | ₹1,00,000 | 5% | 5% |
| 194H | Commission/Brokerage | ₹15,000 | 5% | 5% |
| 194-I (a) | Rent: Plant/Machinery/Equipment | ₹2,40,000 | 2% | 2% |
| 194-I (b) | Rent: Land/Building/Furniture | ₹2,40,000 | 10% | 10% |
| 194-IA | Property sale (immovable) | ₹50,00,000 | 1% | 1% |
| 194-IB | Rent by individual/HUF tenant | ₹50,000/month | 5% | N/A |
| 194J (a) | Technical services/Call centre | ₹30,000 | 2% | 2% |
| 194J (b) | Professional/Legal/Medical fees | ₹30,000 | 10% | 10% |
| 194K | Mutual fund income | ₹5,000 | 10% | 10% |
| 194N | Cash withdrawal from bank | ₹1 crore (₹20 lakh if ITR not filed) | 2% / 5% | 2% / 5% |
| 194-O | E-commerce operator payments | ₹5,00,000 | 1% | 1% |
| 194Q | Purchase of goods | ₹50,00,000 | 0.1% | 0.1% |
| 194R | Benefits/Perquisites (business) | ₹20,000 | 10% | 10% |
| 194S | Virtual digital assets (crypto) | ₹50,000 (₹10,000 for specified) | 1% | 1% |
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Get TDS ManagedTDS Rates for Non-Residents (NRIs) FY 2026-27
TDS rates for payments to non-residents are generally higher than resident rates and are subject to surcharge and health and education cess (4%). DTAA (Double Tax Avoidance Agreement) benefits may reduce applicable rates for citizens of treaty countries.
| Nature of Income | TDS Rate | Notes |
|---|---|---|
| Salary | Slab rates | Based on estimated total income |
| Interest income | 30% | Plus surcharge and cess |
| Dividend | 20% | Subject to DTAA provisions |
| Royalty and FTS | 20% | Subject to DTAA provisions |
| Short-term capital gains (equity) | 20% | Listed securities with STT paid |
| Long-term capital gains (equity) | 12.5% | Above ₹1.25 lakh exemption |
| Other long-term capital gains | 12.5% | Property, unlisted shares, etc. |
| Other income | 30% | Plus surcharge and cess |
Higher TDS Rates: When They Apply
Two situations trigger higher TDS rates that every deductor must be aware of:
Section 206AA: No PAN / Inoperative PAN
If the deductee does not furnish PAN or furnishes an inoperative PAN, TDS applies at the higher of: twice the applicable rate, twice the rate in force, or 20%. For Section 194C (contractor, normally 1%), the rate becomes 20%. This is the single most impactful penal provision in TDS compliance.
Section 206AB: Non-Filers of ITR
For persons who have not filed ITR for the last two years and whose TDS/TCS aggregate exceeded ₹50,000 in each of those years, TDS applies at the higher of: twice the applicable rate or 5%. The income tax portal provides a compliance check utility for deductors to verify payee filing status.
| Scenario | Applicable Rate | Example (Normal 10%) |
|---|---|---|
| No PAN / Inoperative PAN | Higher of 2x rate or 20% | 20% |
| ITR non-filer (206AB) | Higher of 2x rate or 5% | 20% |
| Both conditions | Higher of all applicable rates | 20% |
TDS Compliance Calendar for FY 2026-27
TDS deducted in a month must be deposited by the 7th of the following month (except March, where the deadline is April 30). TDS returns are filed quarterly.
| Quarter | Period | TDS Return Due Date |
|---|---|---|
| Q1 | April to June 2026 | July 31, 2026 |
| Q2 | July to September 2026 | October 31, 2026 |
| Q3 | October to December 2026 | January 31, 2027 |
| Q4 | January to March 2027 | May 31, 2027 |
Late TDS return filing attracts a fee of ₹200 per day until the return is filed, subject to a maximum equal to the TDS amount. Additionally, interest at 1.5% per month is charged from the date of deduction to the date of deposit. Non-filing can also trigger prosecution proceedings.
TDS Certificate Forms: New Numbers from April 2026
All TDS certificate and statement forms have been renumbered under the Income Tax Rules, 2026. Employers and deductors must issue certificates using the new form numbers from April 1, 2026.
| Old Form | New Form | Purpose |
|---|---|---|
| Form 16 | Form 130 | Annual TDS certificate for salary |
| Form 16A | Form 131 | TDS certificate for non-salary payments |
| Form 16B | Form 132 | TDS certificate for property sale |
| Form 26AS | Updated equivalent | Annual tax statement / Tax passbook |
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View Accounting ServicesTDS on Specific Business Transactions
E-Commerce Sellers
If you sell through Amazon, Flipkart, Meesho, or any e-commerce platform, the operator deducts 1% TDS under Section 194-O when your aggregate receipts exceed ₹5 lakh/year. This TDS reflects in your Form 26AS and can be claimed as credit when filing your income tax return.
Cryptocurrency and Digital Assets
TDS at 1% on crypto transactions under Section 194S applies when the transfer value exceeds ₹50,000/year (₹10,000 for specified persons). Crypto exchanges deduct TDS automatically. For peer-to-peer (P2P) trades, the buyer is responsible for deducting and depositing TDS.
Rent Payments
If your business rents office space for more than ₹2,40,000/year, you must deduct 10% TDS under Section 194-I. For individuals and HUFs paying monthly rent above ₹50,000 (even for personal residence), 5% TDS under Section 194-IB applies. Use the income tax portal to generate challan and deposit TDS online.
How to Use This TDS Chart: Practical Guide
- Identify the payment type and match it to the correct section in the chart above
- Check the threshold: TDS applies only when payment exceeds the specified limit
- Verify payee PAN status: Use the compliance check on the income tax portal
- Apply the correct rate: Individual/HUF rate or company/firm rate based on payee status
- Deduct and deposit: By 7th of the following month (30th April for March deductions)
- Issue TDS certificate: Form 130 for salary, Form 131 for non-salary payments
- File quarterly returns: By the due dates listed in the compliance calendar above
Summary
The TDS rate chart for FY 2026-27 reflects the comprehensive overhaul under the new Income-tax Act, 2025. With renumbered sections, updated form references, and the Tax Year concept, every deductor must update their compliance systems before April 1, 2026. The core rates for major sections (salary at slab, interest at 10%, rent at 10%, professional fees at 10%, contractors at 1%/2%) remain broadly stable, but the penal framework for non-compliance has teeth: ₹200/day late filing, 1.5%/month interest, and double rates without PAN. For professional tax compliance management, speak with our team.
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