TDS on professional fees limit for FY 2026-27: Rs 50,000 a year per payee. Once payments to one person cross Rs 50,000 in the year, deduct 10% on fees for professional services and 2% on fees for technical services; the limit is counted separately for each type, and fees or commission paid to a director have no limit at all. The limit was raised from Rs 30,000 on 1 April 2025 and carries over unchanged into Section 393(1), Table Sl. No. 6(iii) of the Income-tax Act, 2025 (old Section 194J).
FY 2026-27 is the first full year under the Income Tax Act 2025, which replaced the Income Tax Act 1961 from April 1, 2026. For TDS, the change is structural: old Sections 192 to 196D have been consolidated into Section 392 (salary TDS) and Section 393 (all other TDS payments). Rates and thresholds are largely unchanged. The rate cuts of 1 October 2024 (Finance (No. 2) Act 2024) and the Section 194T obligation on partner payments from 1 April 2025 carry over into the new Act.
This guide provides the complete master table, section-wise breakdown, and filing deadlines your accounts and payroll teams need for FY 2026-27. New to TDS? Our TDS meaning guide explains deductors, due dates and credit first. For detailed guidance on specific TDS types, explore our focused guides: Section 194A TDS on Interest covers banks, companies, deposits, and exemption procedures.
TDS Rate Chart FY 2026-27: Complete Master Table
Tax Rate Chart
Key TDS Rates FY 2026-27 (Section 393)
Rates applicable to deductees with valid PAN. No-PAN rate is 20% or applicable rate, whichever is higher.
Purchase of Goods (194Q)
Buyer turnover > Rs 10 cr; aggregate purchase > Rs 50 lakh
E-Commerce Operator Payments (194O)
Reduced from 1% on 1 October 2024; Rs 5 lakh/year exemption only for individual/HUF sellers
Contractor : Individual/HUF (194C)
Single contract > Rs 30,000 OR aggregate > Rs 1 lakh
Rent : Individual/HUF (194IB)
Reduced from 5% on 1 October 2024; monthly rent > Rs 50,000
Professional Fees (194J)
CA, doctor, lawyer, consultant; threshold Rs 50,000/year from 1 April 2025
Interest : Bank/Post Office (194A)
Threshold Rs 50,000 (Rs 1 lakh for senior citizens)
Partner Payments : NEW (194T)
Salary, remuneration, interest to partners; aggregate > Rs 20,000
Lottery / Winnings (194B)
Per transaction > Rs 10,000
Source: Income Tax Act 2025, Sections 392:393; Finance Act 2025
Full TDS Rate Chart FY 26-27 (Payments to Residents)
The table below is the complete TDS rate chart for FY 2026-27 (tax year 2026-27), read from the tables in Section 393 of the Income-tax Act, 2025, with the old 1961 Act section shown so you can match it to last year's chart. "Rates in force" items take their rate from Part II of the First Schedule to the Finance Act, 2026.
| Nature of payment | Old section (1961 Act) | New entry (2025 Act) | TDS rate | Threshold |
|---|---|---|---|---|
| Salary | 192 | Section 392 | Slab rates | Above basic exemption limit |
| Insurance commission | 194D | 393(1) Sl. 1(i) | 2% (10% if payee is a company) | Rs 20,000 |
| Commission or brokerage | 194H | 393(1) Sl. 1(ii) | 2% | Rs 20,000 |
| Rent paid by individual/HUF not required to deduct under the specified-person entry | 194-IB | 393(1) Sl. 2(i) | 2% | Rs 50,000 per month |
| Rent of plant, machinery or equipment | 194-I(a) | 393(1) Sl. 2(ii)(a) | 2% | Rs 50,000 per month |
| Rent of land, building, furniture or fittings | 194-I(b) | 393(1) Sl. 2(ii)(b) | 10% | Rs 50,000 per month |
| Purchase of immovable property (not agricultural land) | 194-IA | 393(1) Sl. 3(i) | 1% of consideration or stamp duty value, whichever is higher | Rs 50 lakh or more |
| Joint development agreement (cash consideration) | 194-IC | 393(1) Sl. 3(ii) | 10% | Nil |
| Compensation on compulsory acquisition | 194LA | 393(1) Sl. 3(iii) | 10% | Rs 5,00,000 |
| Income from mutual fund units | 194K | 393(1) Sl. 4(i) | 10% | Rs 10,000 |
| Income from business trust / investment fund / securitisation trust | 194LBA / 194LBB / 194LBC | 393(1) Sl. 4(ii) to 4(iv) | 10% | Nil |
| Interest on securities | 193 | 393(1) Sl. 5(i) | 10% | Rs 10,000 |
| Interest from bank, co-operative bank or post office | 194A | 393(1) Sl. 5(ii) | 10% | Rs 50,000 (Rs 1,00,000 for senior citizens) |
| Interest from other payers | 194A | 393(1) Sl. 5(iii) | 10% | Rs 10,000 |
| Contractor payments | 194C | 393(1) Sl. 6(i) | 1% (individual/HUF), 2% (others) | Rs 30,000 per contract or Rs 1,00,000 a year |
| Contract work, professional fees or commission paid by individual/HUF not otherwise liable | 194M | 393(1) Sl. 6(ii) | 2% | Rs 50 lakh |
| Fees for professional services, royalty, non-compete fees | 194J | 393(1) Sl. 6(iii) | 10% | Rs 50,000 |
| Fees for technical services, call centre payees, film royalty | 194J | 393(1) Sl. 6(iii) | 2% | Rs 50,000 |
| Director's fees or commission (non-salary) | 194J | 393(1) Sl. 6(iii)(c) | 10% | Nil |
| Dividend | 194 | 393(1) Sl. 7 | 10% | No TDS for individual shareholders up to Rs 10,000 a year paid by non-cash mode |
| Life insurance policy payout (taxable part) | 194DA | 393(1) Sl. 8(i) | 2% on income component | Rs 1,00,000 |
| Purchase of goods | 194Q | 393(1) Sl. 8(ii) | 0.1% on amount above Rs 50 lakh | Rs 50 lakh |
| Business perquisites or benefits | 194R | 393(1) Sl. 8(iv) | 10% | Rs 20,000 |
| E-commerce operator payments | 194-O | 393(1) Sl. 8(v) | 0.1% of gross sales | No TDS for individual/HUF sellers up to Rs 5 lakh who give PAN or Aadhaar |
| Transfer of virtual digital asset | 194S | 393(1) Sl. 8(vi) | 1% | Rs 50,000 (specified individual/HUF payers) or Rs 10,000 (others) |
| Lottery, crossword, card game winnings | 194B | 393(3) Sl. 1 | 30% | Rs 10,000 per transaction |
| Online game net winnings | 194BA | 393(3) Sl. 2 | 30% | On net winnings |
| Horse race winnings | 194BB | 393(3) Sl. 3 | 30% | Rs 10,000 per transaction |
| Commission on lottery tickets | 194G | 393(3) Sl. 4 | 2% | Rs 20,000 |
| Cash withdrawal from bank, co-operative bank or post office | 194N | 393(3) Sl. 5 | 2% | Rs 1 crore (Rs 3 crore for co-operative societies) |
| National Savings Scheme withdrawals | 194EE | 393(3) Sl. 6 | 10% | Rs 2,500 |
| Salary, commission, bonus or interest to partners | 194T | 393(3) Sl. 7 | 10% | Rs 20,000 |
Where the threshold is crossed, TDS applies to the whole amount, except for purchase of goods (only the excess over Rs 50 lakh). Payments to non-residents fall under Section 393(2) and are covered in our guide to TDS on payments to non-residents.
All rates below apply to deductees who have furnished a valid PAN. If no PAN is provided, TDS must be deducted at 20% or the applicable rate, whichever is higher (Section 206AA equivalent under the new Act).
Recent TDS Rate Cuts That Carry Into FY 2026-27
Three rates were reduced by the Finance (No. 2) Act 2024, effective 1 October 2024. They continue unchanged for FY 2026-27 under Section 393.
1. Rent by Individual / HUF: 2% (was 5%)
Old Section 194IB required individuals and HUFs not subject to tax audit to deduct TDS at 5% on monthly rent exceeding Rs 50,000. From 1 October 2024 the rate is 2%. The threshold (Rs 50,000/month) is unchanged. New section: 393.
2. Insurance Maturity Proceeds: 2% (was 5%)
TDS on life insurance maturity, survival benefit, and bonus payments (old Section 194DA) was reduced from 5% to 2% from 1 October 2024, for amounts exceeding Rs 1,00,000. This applies to non-exempt policies, meaning those where the annual premium exceeded 10% of the sum assured. New section: 393.
3. E-Commerce Operator Payments: 0.1% (was 1%)
TDS deducted by e-commerce operators on seller payments (old Section 194O) was reduced from 1% to 0.1% from 1 October 2024, a 90% reduction. The Rs 5 lakh annual exemption for individual and HUF sellers who furnish PAN or Aadhaar is unchanged. Platform sellers on Amazon, Flipkart, and similar marketplaces benefit from improved cash flow. New section: 393. See our detailed TDS on e-commerce payments under Section 194O guide for thresholds, returns, and seller compliance.
New TDS Section: 194T on Partner Payments (FY 2025-26 Onwards)
Section 194T was introduced by the Finance Act 2024, effective April 1, 2025. It applies for FY 2026-27 as well, now consolidated within Section 393 of the Income Tax Act 2025.
Who it applies to: All partnership firms and LLPs that pay the following to partners:
- Salary or remuneration
- Bonus or commission
- Interest on capital or loan account
Rate: 10%
Threshold: Aggregate payments to a single partner exceed Rs 20,000 in the financial year
How it works: Deduct TDS at the time of credit or payment, whichever is earlier. Deposit the challan by the 7th of the following month. Report in Form 140 quarterly.
PAN requirement: If the partner does not furnish a PAN, deduct at 20% (Section 206AA equivalent).
This is the first time partners of Indian firms are brought into the TDS framework directly. Every partnership and LLP paying remuneration to partners must assess whether the Rs 20,000 annual threshold is crossed.
Section 194Q: TDS on Purchase of Goods (New Section 393)
For buyers whose previous year turnover exceeded Rs 10 crore, TDS under Section 194Q (now Section 393) applies on goods purchases from resident sellers.
| Condition | Detail |
|---|---|
| Buyer eligibility | Total sales or turnover above Rs 10 crore in the preceding year |
| Trigger threshold | Purchases from one seller above Rs 50 lakh in the year |
| Rate | 0.1% on the amount above Rs 50 lakh |
| No PAN | 5% |
| New entry under the 2025 Act | Section 393(1) Table Sl. No. 8(ii) |
Section 206C(1H) (TCS on sale of goods by the seller) was removed from April 1, 2025. Only Section 194Q (buyer-side TDS) now governs high-value goods transactions. For the complete guide, see TDS on Purchase of Goods: Section 194Q / 393 Guide.
Section 194J: Professional Fees TDS Rate FY 2026-27
Section 194J (now Section 393(1) Table Sl. No. 6(iii)) applies two distinct rates:
| Payment type | Rate | Threshold (FY 2026-27) |
|---|---|---|
| Professional services (doctor, lawyer, architect, engineer, consultant) | 10% | Above Rs 50,000 a year |
| Royalty (other than film royalty) and non-compete fees | 10% | Above Rs 50,000 a year |
| Fees for technical services (not professional services) | 2% | Above Rs 50,000 a year |
| Call centre payees and royalty for sale, distribution or exhibition of films | 2% | Above Rs 50,000 a year |
| Director's fees or commission (other than salary) | 10% | Any amount |
Common error: Classifying software development or IT support (technical services) as professional fees and applying 10% instead of 2%. If you are unsure which TDS section applies to a particular payment, map the nature of the work before you deduct: most software vendor contracts qualify as technical services (2%), not professional services (10%).
For the dedicated guide, see TDS on Professional and Technical Fees: Section 194J / 393 Guide.
Section 194C: Contractor TDS Limit and Rate FY 2026-27
Section 194C (now Section 393) applies to payments for carrying out any work, including manufacturing to specification, advertising, broadcasting, transport, catering, labour supply, and sub-contracting.
| Deductee type | Rate | Single contract threshold | Annual aggregate threshold |
|---|---|---|---|
| Individual or HUF | 1% | Above Rs 30,000 | Above Rs 1,00,000 |
| Company, firm, LLP, AOP, BOI and others | 2% | Above Rs 30,000 | Above Rs 1,00,000 |
Both thresholds are independent. If either is crossed, TDS applies to the full payment, not just the excess. If you pay Rs 35,000 for a single contract, TDS applies on the entire Rs 35,000, not just Rs 5,000.
Transport exemption: No TDS if the transporter furnishes their PAN and owns 10 or fewer goods carriages. Collect and retain the declaration each year.
For the full guide, see TDS on Contractor Payments: Section 194C / 393 Guide.
Section 194A: TDS on Interest FY 2026-27
| Source of interest | Rate | Threshold |
|---|---|---|
| Bank, co-operative bank or post office deposit scheme | 10% | Above Rs 50,000 a year (Rs 1,00,000 for senior citizens) |
| Other payers (company deposits, NBFCs, loans) | 10% | Above Rs 10,000 a year |
| Interest on securities (old 194) | 10% | Above Rs 10,000 a year |
The higher limit of Rs 1 lakh for senior citizens (age 60+) applies only to interest from banks, post offices, and co-operative banks, not from NBFCs or company fixed deposits.
Learn more: Section 194A TDS on Interest: Complete Rates & Thresholds Guide covers exemptions via Form 15G/15H, penalties for non-deduction, and practical examples for banks, companies, and other payers.
Filing Deadlines: Challans and Returns
Monthly TDS Challan Deposits
April to February
7th of Next Month
March Deduction
April 30th
Quarterly TDS Return Due Dates
| Quarter | Form 138 / 140 Due Date |
|---|---|
| Quarter 1 | July 31, 2026 |
| Quarter 2 | Oct 31, 2026 |
| Quarter 3 | Jan 31, 2027 |
| Quarter 4 | May 31, 2027 |
New form names, mandatory from Q1 FY 2026-27 (April to June 2026):
| Old form | New form (Income-tax Rules, 2026) | Purpose |
|---|---|---|
| Form 24Q | Form 138 | Salary TDS quarterly statement |
| Form 26Q | Form 140 | Non-salary TDS on residents |
| Form 27Q | Form 144 | TDS on non-residents |
| Form 27EQ | Form 143 | TCS quarterly statement |
Returns filed under old form names for periods from April 1, 2026 will be rejected.
TDS Certificates for FY 2025-26
- Form 16 (salary) for FY 2025-26 deductions under the 1961 Act: issue to employees by June 15, 2026
- Form 16A (non-salary) for FY 2025-26 deductions under the 1961 Act
- From tax year 2026-27, the certificates under the new Act are Form 130 (salary, replacing Form 16) and Form 131 (non-salary, replacing Form 16A)
Interest and Penalty for TDS Defaults
| Default | Consequence under the Income-tax Act, 2025 |
|---|---|
| Failure to deduct | Interest at 1% a month or part of a month, from the date tax was deductible to the date it is deducted (Section 398(3)) |
| Failure to deposit after deduction | Interest at 1.5% a month or part of a month, from the date of deduction to the date of payment (Section 398(3)) |
| Late TDS statement | Fee of Rs 200 a day, capped at the TDS amount (Section 427) |
| Failure to file or incorrect TDS statement | Penalty of Rs 10,000 to Rs 1,00,000; no penalty if tax, fee and interest are paid and the statement is filed within one month of the due date (Section 461) |
| Expense on which TDS was not deducted or paid | 30% of the sum disallowed (Section 35, old Section 40(a)(ia)) |
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Frequently Asked Questions
Did TDS rates change when the Income-tax Act, 2025 came into force on 1 April 2026?
Largely no. The new Act moves salary TDS into Section 392 and other TDS into a consolidated table in Section 393, but the rates and thresholds mostly carry over from FY 2025-26. Several cuts people associate with the new Act actually came earlier: rent by individuals, life insurance payouts and e-commerce TDS were reduced from 1 October 2024.
What is the TDS threshold for professional fees now?
From 1 April 2025, TDS on fees for professional or technical services applies once payments to a person exceed Rs 50,000 in the financial year, raised from Rs 30,000. The rate stays 10% for professional services and 2% for technical services, call centres and certain royalties. Director fees and remuneration have no threshold.
When does a partnership firm have to deduct TDS on partner remuneration?
From 1 April 2025, a firm or LLP must deduct 10% TDS on salary, remuneration, commission, bonus or interest paid to a partner when the total for that partner exceeds Rs 20,000 in the financial year. Drawings and capital withdrawals are not covered. The TDS is deposited by the 7th of the next month and reported in the quarterly non-salary return.
What TDS rate applies if the payee has no PAN?
If the deductee does not furnish a valid PAN, TDS is deducted at the higher of the normal rate and 20%, with some exceptions, such as 5% for purchase of goods and e-commerce payments. The higher rate for non-filers under Section 206AB was omitted from 1 April 2025, so only the no-PAN rule remains. Always collect PAN before the first payment.
Is there a higher interest TDS threshold for senior citizens?
Yes. For FY 2025-26 onward, banks, co-operative banks and post offices deduct TDS on interest only when it exceeds Rs 1 lakh a year for senior citizens (aged 60 or more) and Rs 50,000 for others. For interest from other payers, such as company deposits, the threshold is Rs 10,000. Seniors with no taxable income can also submit a declaration to avoid TDS.
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