TDS Rates Chart for FY 2026-27 (Section-wise)
- TDS rates range from 1% to 30% depending on the section — knowing the right rate prevents both under-deduction penalties and excess deductions.
- The threshold limit matters as much as the rate — no TDS is deducted until the payment crosses the specified annual or single-payment limit.
- Filing TDS returns quarterly on time avoids a ₹200/day late fee under Section 234E, which can exceed the tax itself.
If you pay salary, rent, professional fees, or interest — you are likely required to deduct TDS before making that payment. Getting the rate or threshold wrong exposes you to interest, penalty, and even prosecution. This TDS rates chart for FY 2026-27 (April 2026 – March 2027) gives you every major section-wise rate in one place, a real worked example, and the mistakes that trip up most small businesses and salaried employees.
TDS Rates Chart for FY 2026-27 (Section-wise)
The table below covers the most commonly applicable TDS sections for resident payees. Rates for non-residents differ significantly — always check Section 195 and the relevant DTAA separately.
| Section | Nature of Payment | Threshold Limit (₹) | TDS Rate (Resident) |
|---|---|---|---|
| 192 | Salary | Basic exemption limit | As per slab rates |
| 193 | Interest on securities | 10,000 | 10% |
| 194 | Dividend (other than 115-O) | 5,000 | 10% |
| 194A | Interest other than securities (banks, co-ops, post office) | 50,000 (senior citizens) / 40,000 (others) | 10% |
| 194B | Winnings from lottery / crossword | 10,000 per transaction | 30% |
| 194C | Payment to contractors | 30,000 single / 1,00,000 aggregate p.a. | 1% (individual/HUF) / 2% (others) |
| 194D | Insurance commission | 15,000 | 5% |
| 194H | Commission or brokerage | 15,000 | 5% |
| 194I(a) | Rent – plant, machinery, equipment | 2,40,000 p.a. | 2% |
| 194I(b) | Rent – land, building, furniture | 2,40,000 p.a. | 10% |
| 194IA | Transfer of immovable property (buyer deducts) | 50,00,000 | 1% |
| 194IB | Rent paid by individual/HUF (not liable to tax audit) | 50,000 per month | 5% |
| 194J | Professional / technical fees | 30,000 | 10% (professional) / 2% (technical / call centre) |
| 194M | Payment by individual/HUF to contractor or professional (above threshold) | 50,00,000 p.a. | 5% |
| 194N | Cash withdrawal from bank exceeding limit | 1,00,00,000 (if ITR filed) / 20,00,000 (if ITR not filed) | 2% / 2% or 5% |
| 194Q | Purchase of goods (buyer deducts) | 50,00,000 p.a. per seller | 0.1% |
| 194R | Benefit or perquisite to a business / profession | 20,000 p.a. | 10% |
| 194S | Payment for transfer of virtual digital assets (crypto) | 10,000 (specified persons) / 50,000 (others) | 1% |
Note: If the payee does not furnish PAN, TDS is deducted at 20% (or the applicable rate, whichever is higher) under Section 206AA. Always verify PAN on the TRACES portal before deducting.
Worked Example: TDS on Salary Under Section 192
Section 192 does not have a fixed percentage. The employer must estimate the employee's total income for the year and deduct TDS at the applicable slab rates. Let's walk through a real example.
Employee details (FY 2026-27, New Tax Regime opted):
- Basic + DA: ₹9,00,000
- HRA: ₹1,80,000
- Special allowance: ₹1,20,000
- Gross salary: ₹12,00,000
Step 1 – Standard deduction: ₹75,000 (enhanced from ₹50,000 for FY 2025-26 onwards under the new regime).
Step 2 – Net taxable income: ₹12,00,000 − ₹75,000 = ₹11,25,000
Step 3 – Apply new tax regime slabs (FY 2026-27):
- Up to ₹4,00,000 → Nil
- ₹4,00,001 to ₹8,00,000 → 5% on ₹4,00,000 = ₹20,000
- ₹8,00,001 to ₹11,25,000 → 10% on ₹3,25,000 = ₹32,500
- Total tax before cess: ₹52,500
Step 4 – Add 4% Health & Education Cess: ₹52,500 × 4% = ₹2,100
Total annual TDS: ₹54,600
Monthly TDS deduction: ₹54,600 ÷ 12 = ₹4,550 per month
The employer deposits ₹4,550 every month to the government and reflects it in Form 16 issued to the employee at year-end. If the employee's investments or deductions change mid-year, the employer must re-estimate and adjust the remaining monthly deductions accordingly.
Key TDS Due Dates for FY 2026-27
Deducting TDS is only half the job. You must also deposit it on time and file quarterly returns. Missing these dates triggers automatic penalties.
| Quarter | Period | TDS Return Filing Due Date | TDS Payment Due Date |
|---|---|---|---|
| Q1 | April – June 2026 | 31 July 2026 | 7th of following month (30 April for March deductions) |
| Q2 | July – September 2026 | 31 October 2026 | 7th of following month |
| Q3 | October – December 2026 | 31 January 2027 | 7th of following month |
| Q4 | January – March 2027 | 31 May 2027 | 30 April 2027 (for March deductions) |
TDS on property purchase under Section 194IA must be paid within 30 days from the end of the month in which deduction is made, using Form 26QB.
When TDS Is NOT Required: Section 197 & Lower Deduction
If a payee's total income is below the taxable limit, they can apply to their Assessing Officer for a nil or lower deduction certificate under Section 197. The deductor must honour a valid certificate by deducting at the rate stated on it — not the standard rate. Always keep a copy of the certificate on file in case of scrutiny. Individuals with only bank interest income can also submit Form 15G (below 60 years) or Form 15H (senior citizens) to request nil TDS from the bank directly.
Common Mistakes People Make with TDS
- Applying the wrong rate because PAN is missing. Many deductors forget to collect PAN upfront. Under Section 206AA, if a valid PAN is not provided, TDS must be deducted at 20% or the applicable rate — whichever is higher. On a ₹5,00,000 professional fee, that means ₹1,00,000 TDS instead of ₹50,000.
- Treating the threshold as a per-payment limit when it is an annual aggregate. Under Section 194C, TDS kicks in when aggregate payments to a single contractor cross ₹1,00,000 in a year, not just when a single bill crosses ₹30,000. Many businesses deduct nothing all year and then scramble in March.
- Ignoring Section 194IB for home rent above ₹50,000/month. Individuals and HUFs not subject to tax audit must still deduct 5% TDS on rent exceeding ₹50,000 per month. This is routinely skipped by salaried employees renting premium apartments.
- Forgetting to deduct TDS on GST-inclusive invoices. TDS under most sections (194C, 194J, etc.) should be deducted on the base amount excluding GST, provided GST is separately indicated in the invoice. Deducting TDS on the full GST-inclusive value is a very common error that inflates the deductee's TDS credit incorrectly.
- Late filing of TDS returns assuming it is the same as late payment. Late payment attracts interest under Section 201 (1% or 1.5% per month). But late filing of the TDS return separately attracts a mandatory fee of ₹200 per day under Section 234E, capped at the TDS amount. These are two different penalties and both can apply simultaneously.
How to File TDS Returns and Stay Compliant
TDS returns (Form 24Q for salary, Form 26Q for non-salary residents, Form 27Q for non-residents) must be filed on the TRACES/e-filing portal every quarter. The data flows directly into the payee's Form 26AS and AIS, so any mismatch causes problems during ITR filing. If you find the process complex or error-prone, our team at KyaTax handles end-to-end TDS Returns — from deduction calculation to return filing and correction statements.
Do it yourself in minutes — free to try, no login needed.
Open TDS Returns →Frequently asked questions
What is the TDS rate on professional fees in FY 2026-27?
Under Section 194J, TDS on professional fees (doctors, lawyers, consultants, etc.) is 10%. For technical services and fees paid to a call centre, the rate is 2%. TDS applies once the payment exceeds ₹30,000 in a financial year from a single payee.
Is TDS applicable on GST amount shown in an invoice?
No. TDS should be deducted only on the base value excluding GST, provided GST is separately shown in the invoice. If the invoice bundles the amount without splitting GST, TDS is deducted on the full amount. Always ask vendors for GST-compliant invoices with the tax component shown separately.
What happens if I deduct TDS but forget to deposit it to the government?
Late deposit of TDS attracts interest at 1.5% per month (or part of a month) from the date of deduction to the date of actual deposit under Section 201(1A). This interest is not tax-deductible as a business expense, making it an expensive mistake. In serious cases, the deductor can also be treated as an assessee-in-default.
Can I claim a refund if excess TDS is deducted from my salary?
Yes. Excess TDS deducted from your salary is reflected in your Form 26AS and AIS. When you file your Income Tax Return (ITR), the excess TDS is automatically adjusted against your total tax liability, and any surplus is refunded by the Income Tax Department — usually within a few weeks if the ITR is filed online with a valid bank account pre-validated for refund.
General information for FY 2026-27, not professional advice for your specific case. Rules change — verify against the latest notification or ask a KyaTax expert.
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