TDS and TCS rate chart FY 2026-27
Section-wise rates and thresholds for tax year 2026-27 (assessment year 2027-28), after the Finance Act 2026 — cited by the Income-tax Act, 2025 section and table entry, with the 1961 section everyone still recognises beside it.
Rates apply to payments to residents unless the row says otherwise; payments to non-residents fall under section 195 with surcharge and cess added. Thresholds are per financial year unless stated. Changes in force for FY 2026-27: manpower supply is now "work" under 194C, buyers of property from NRIs can deposit TDS with their PAN, TCS on tour packages is a flat 2%, TCS on education and medical remittances is 2% above ₹10 lakh, and TCS on liquor, scrap and minerals is 2%.
Salary and employees
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Salary Employer deducts monthly on the regime the employee chooses; Form 12BB for proofs. | 392 | 192 | Basic exemption (₹4 lakh new regime; ₹2.5–5 lakh old regime) | Slab rate on estimated income |
| Premature withdrawal from EPF 20% without PAN; nil if withdrawal is after five years of service or Form 15G/15H applies. | 392(7) | 192A | ₹50,000 | 10% |
| Salary, commission or bonus to a partner Applies to firms and LLPs from 1 April 2025; interest and remuneration both count. | 393(3) Sl. 7 | 194T | ₹20,000 a year | 10% |
Interest and dividends
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Interest on securities Listed debentures and bonds; nil on certain government securities and gold bonds. | 393(1) Sl. 5(i) | 193 | ₹10,000 | 10% |
| Interest from a bank, post office or co-operative bank — senior citizen Threshold per bank, aggregated across branches with core banking. | 393(1) Sl. 5(ii) | 194A | ₹1,00,000 | 10% |
| Interest from a bank, post office or co-operative bank — others Form 15G/15H stops deduction where total income is within the exemption limit. | 393(1) Sl. 5(ii) | 194A | ₹50,000 | 10% |
| Other interest (loans, deposits with companies, NBFCs) Interest paid by individuals and HUFs not subject to audit is outside 194A. | 393(1) Sl. 5(iii) | 194A | ₹10,000 | 10% |
| Dividend Companies and mutual funds (194K) alike; nil where the shareholder is LIC/GIC or on dividends to a REIT/InvIT. | 393(1) Sl. 7 | 194 | ₹10,000 | 10% |
| Income from mutual fund units Dividend option only — capital gains on redemption are not subject to TDS for residents. | 393(1) Sl. 4(i) | 194K | ₹10,000 | 10% |
Contractors, professionals and commission
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Payment to a contractor — individual or HUF payee Includes advertising, catering, transport, manpower supply (added by Finance Act 2026) and job work with material supplied by the customer. | 393(1) Sl. 6(i) | 194C | ₹30,000 a contract / ₹1,00,000 a year | 1% |
| Payment to a contractor — other payees Nil for a transporter owning up to ten goods carriages who gives a declaration with PAN. | 393(1) Sl. 6(i) | 194C | ₹30,000 a contract / ₹1,00,000 a year | 2% |
| Fees for professional services; director's fees Legal, medical, accountancy, architecture, consultancy, film artists, sportspersons and notified professions. | 393(1) Sl. 6(iii) | 194J | ₹50,000 a year (no threshold for director's fees) | 10% |
| Fees for technical services; royalty for films; call-centre operators Technical services at 2%; other royalty at 10%. | 393(1) Sl. 6(iii) | 194J | ₹50,000 a year | 2% |
| Commission or brokerage Excludes insurance commission (194D) and commission on lottery tickets (194G). | 393(1) Sl. 1(ii) | 194H | ₹20,000 a year | 2% |
| Insurance commission Agents' commission from insurers. | 393(1) Sl. 1(i) | 194D | ₹20,000 a year | 2% (individuals) / 10% (companies) |
| Commission on sale of lottery tickets | 393(3) Sl. 4 | 194G | ₹20,000 a year | 2% |
| Contractor or professional payments by an individual or HUF not liable to deduct under 194C/194J Deposited with Form 26QD within 30 days of the month end; no TAN needed. | 393(1) | 194M | ₹50 lakh a year | 2% |
Rent and property
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Rent of plant, machinery or equipment Threshold is per month from 1 April 2025. | 393(1) Sl. 2(ii) | 194-I(a) | ₹50,000 a month (₹6 lakh a year) | 2% |
| Rent of land, building, furniture or fittings Deducted by businesses and audited individuals; others use 194-IB. | 393(1) Sl. 2(ii) | 194-I(b) | ₹50,000 a month (₹6 lakh a year) | 10% |
| Rent paid by an individual or HUF not under 194-I Deducted once a year in the last month of tenancy or the year, deposited with Form 26QC within 30 days. | 393(1) | 194-IB | ₹50,000 a month | 2% |
| Purchase of immovable property (other than agricultural land) On the higher of consideration and stamp duty value; Form 26QB within 30 days; no TAN. Buyers from NRIs use section 195 instead. | 393(1) | 194-IA | ₹50 lakh (price or stamp duty value) | 1% |
| Payment under a joint development agreement to a resident Monetary consideration to the landowner. | 393(1) Sl. 3(ii) | 194-IC | No threshold | 10% |
| Compensation on compulsory acquisition of immovable property Nil on agricultural land and on awards under the RFCTLARR Act, 2013. | 393(1) Sl. 3(iii) | 194LA | ₹5 lakh a year | 10% |
Business, e-commerce and digital assets
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Purchase of goods by a buyer with turnover above ₹10 crore On the amount above ₹50 lakh; overrides TCS under 206C(1H), which no longer applies from 1 April 2025. | 393(1) Sl. 8(ii) | 194Q | ₹50 lakh a year per seller | 0.1% |
| E-commerce operator paying a participant Gross sales or services through the platform; 5% without PAN. | 393(1) Sl. 8(v) | 194-O | ₹5 lakh a year (individuals/HUF only) | 0.1% |
| Benefit or perquisite from business or profession Gifts, free samples above the threshold, sponsored trips, waived debts. | 393(1) Sl. 8(iv) | 194R | ₹20,000 a year | 10% |
| Transfer of a virtual digital asset (crypto, NFT) Deducted by the exchange or buyer on the sale value; credited in Form 26AS against the 30% tax. | 393(1) Sl. 8(vi) | 194S | ₹50,000 a year for a specified person — an individual or HUF with no business income, or with turnover up to ₹1 crore / professional receipts up to ₹50 lakh in the previous year; ₹10,000 for others | 1% |
| Cash withdrawal from bank accounts Non-filers for the last three years: 2% above ₹20 lakh and 5% above ₹1 crore. | 393(3) Sl. 5 | 194N | ₹1 crore a year (₹3 crore for co-operative societies) | 2% |
| Life insurance policy payout not exempt under section 10(10D) On the income component only. | 393(1) Sl. 8(i) | 194DA | ₹1 lakh a year | 2% |
| Payment under National Savings Scheme deposits | 393(3) Sl. 6 | 194EE | ₹2,500 | 10% |
Winnings
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Winnings from lottery, crossword, card games, gambling Threshold is per single transaction from 1 April 2025 (no aggregation). | 393(3) Sl. 1 | 194B | ₹10,000 per transaction | 30% |
| Winnings from online games On net winnings in the user account at withdrawal or year end. | 393(3) Sl. 2 | 194BA | No threshold | 30% |
| Winnings from horse races | 393(3) Sl. 3 | 194BB | ₹10,000 per transaction | 30% |
Payments to non-residents
| Nature of payment | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Any sum chargeable to tax paid to a non-resident (interest, royalty, fees, property purchase from an NRI) Form 15CA/15CB before remittance; long-term capital gains on property at 12.5%, short-term at slab. Buyers from NRIs deduct under 195 using their own PAN from FY 2026-27 (no TAN). | 393(2) Sl. 17 | 195 | No threshold | Rate in force or treaty rate, plus surcharge and cess |
| Interest on rupee-denominated bonds, government securities to FPIs Instruments issued before 1 July 2023. | 393(2) Sl. 3 | 194LD | No threshold | 5% |
| Interest on foreign-currency loans and long-term bonds Concessional rates for approved borrowings. | 393(2) Sl. 2 / 4 | 194LC | No threshold | 5% (4% or 9% for IFSC-listed bonds) |
| Income of foreign institutional investors from securities | 393(2) Sl. 15–16 | 196D | No threshold | 20% (10% where the treaty applies) |
| Payments to non-resident sportsmen, entertainers and sports associations Plus surcharge and cess. | 393(2) Sl. 1 | 194E | No threshold | 20% |
Tax collected at source (TCS)
| Nature of receipt | Section (Income-tax Act, 2025) | Old section (1961 Act) | Threshold | Rate |
|---|---|---|---|---|
| Alcoholic liquor for human consumption Rate doubled from 1% by the Finance Act 2026. | 394(1) Sl. 1 | 206C(1) | No threshold | 2% |
| Tendu leaves Reduced from 5%. | 394(1) Sl. 2 | 206C(1) | No threshold | 2% |
| Timber and other forest produce | 394(1) Sl. 3 | 206C(1) | No threshold | 2% |
| Scrap Increased from 1%. | 394(1) Sl. 4 | 206C(1) | No threshold | 2% |
| Coal, lignite, iron ore Increased from 1%; nil where the buyer declares use in manufacturing or power generation. | 394(1) Sl. 5 | 206C(1) | No threshold | 2% |
| Motor vehicle sold to a buyer Collected by the dealer on the ex-showroom price. | 394(1) Sl. 6 | 206C(1F) | ₹10 lakh per vehicle | 1% |
| Luxury goods — wrist watches, art, collectibles, yachts, helicopters, sunglasses, handbags, shoes, sportswear, home theatres, race horses Notified from 22 April 2025. | 394(1) Sl. 6 | 206C(1F) | ₹10 lakh per item | 1% |
| LRS remittance — education funded by an education loan Loan from a financial institution under section 80E. | 394(1) Sl. 7 | 206C(1G) | No TCS | Nil |
| LRS remittance — education from own funds, medical treatment Reduced from 5% by the Finance Act 2026 — see our LRS calculator. | 394(1) Sl. 7 | 206C(1G) | ₹10 lakh a year | 2% |
| LRS remittance — any other purpose (gifts, maintenance, property, shares, deposits) Credited against income tax in the return. | 394(1) Sl. 7 | 206C(1G) | ₹10 lakh a year | 20% |
| Overseas tour package Flat 2% from 1 April 2026, replacing the 5%/20% tiers. | 394(1) Sl. 8 | 206C(1G) | No threshold | 2% |
| Parking lot, toll plaza, mine or quarry licence Collected from the licensee or lessee. | 394(1) Sl. 9 | 206C(1C) | No threshold | 2% |
Rules that apply across the chart
No PAN or an inoperative PAN
TDS at 20% (or the rate in the section, if higher); 5% under 194-O and 194Q; 1% under 194-IA/IB/M is not increased beyond 20%. PAN not linked to Aadhaar is treated as inoperative.
Non-filers
The higher rate for non-filers under section 206AB and 206CCA was withdrawn from 1 April 2025.
Lower or nil deduction
Application in Form 13 under section 197 (now section 395); Form 15G/15H for interest, rent and dividend where total income is within the exemption limit.
When to deposit
By the 7th of the following month; TDS for March by 30 April. Property, rent-by-individuals and 194M TDS within 30 days of the month end with the challan-cum-statement.
Quarterly statements
Forms 24Q (salary), 26Q (residents), 27Q (non-residents) and 27EQ (TCS): 31 July, 31 October, 31 January and 31 May (TCS: 15 July, 15 October, 15 January, 15 May). Late fee ₹200 a day under section 234E.
Interest and penalty
1% a month for late deduction and 1.5% a month for late deposit under section 201(1A); disallowance of 30% of the expense under section 40(a)(ia) where TDS is not deducted or deposited.
Surcharge and cess
Not added to TDS on payments to residents (other than salary); added to TDS on payments to non-residents under section 195 and to salary.
Related: NRI property sale TDS calculator · LRS and TCS calculator · Advance tax and interest calculator · TDS due dates in the compliance calendar
Disclaimer. This page is a general reference prepared from the law and notifications as we understand them on the date shown. It is not legal, tax or professional advice and does not create a client relationship; rates, thresholds and due dates change and your position depends on facts we have not seen. Please confirm with us before acting on anything here. I. H. Khan and Associates accepts no liability for decisions taken on the basis of this page. Section numbers are those of the Income-tax Act, 2025, in force from 1 April 2026, with the 1961 Act number in brackets (pages about the FY 2025-26 return, which the 1961 Act still governs, quote that Act first) — see our section map.
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