TDS Rate Chart FY 2026-27: Section 393 Rates, Thresholds and Every New Income Tax Act Change

TDS for FY 2026-27 runs under a new legal structure: the Income Tax Act, 2025 folds every payment-specific section (192, 194, 194A through 194T) into one Section 393 from April 1, 2026. The rates and thresholds themselves are almost entirely unchanged from FY 2025-26.

This guide covers the full section-wise chart under both old and new numbering, the two areas where most charts get it wrong (rent thresholds and NRI property sales), the TCS chart, and exactly how to pay TDS online.

What's New in TDS for FY 2026-27

Nothing changed in FY 2026-27 itself beyond the section renumbering. The rate cuts and threshold increases that actually moved the numbers all took effect a year earlier, under Budget 2025, and simply carry forward:

How the Income Tax Act 2025 Reorganizes TDS: Section 392, 393 and 394

The Income Tax Act, 2025 replaces the scattered section numbers of the 1961 Act with three consolidated sections, effective for transactions from April 1, 2026 onward. Transactions before that date are still governed by the 1961 Act's original section numbers.

This is a structural renumbering, not a substantive rewrite. TDS return filings for Q1 FY 2026-27 onward reference the new section codes; deductors still commonly refer to transactions by the old, more familiar numbers (194C, 194J, 194Q), which is why this chart lists both throughout.

How TDS Works: Threshold, Rate and the No-PAN Rule

TDS is deducted by the person making the payment, not the person receiving it. Every row in the chart below has a threshold below which no TDS applies, a rate deducted once that threshold is crossed, and a higher no-PAN rate if the payee has not furnished a valid PAN.

Section 206AA (now inside Section 393) sets that no-PAN rate at the highest of the rate specified for that payment, the rate in force under the Finance Act, or a flat 20%. Section 194Q on purchase of goods is the one common exception, capped at 5% instead of 20%.

TDS Rate Chart for FY 2026-27: Complete Section-Wise Table

The table below covers every common category of TDS for resident payees, organised by the payment type you are actually looking for. Old section numbers (still used on Form 26Q/24Q return filings and by most accounting software) are shown alongside the payment category.

Salary, Provident Fund and Interest

A fixed deposit paying close to the Rs 50,000 interest threshold is worth checking against the FD Calculator before renewal, since splitting a large deposit across two banks (each with its own independent Rs 50,000 threshold) can legally keep both below the point where TDS applies.

Dividends and Mutual Funds

Contractors, Commission and Professional Fees

Property, Rent and Compensation

Winnings, Lottery and Gaming

E-Commerce, Goods and Digital Assets

Other Common Payments

TDS on Rent for FY 2026-27: Section 194-I and 194-IB, and the Threshold Most Charts Get Wrong

The Section 194-I rent threshold is Rs 50,000 per month, not a flat Rs 50,000 for the year, a distinction several rate charts still get wrong. The comparison base since Budget 2025 is monthly rent, so the annual equivalent is written as Rs 6,00,000.

The month-by-month test means a tenant paying Rs 45,000 for eleven months and Rs 55,000 in one month crosses the threshold only for that one month, not the whole tenancy; TDS is deducted only on the month that exceeds Rs 50,000, not retroactively on prior months.

TDS on Sale of Property: Resident Sellers vs NRI Sellers

A resident seller and an NRI seller of the same property are taxed under two entirely different sections, with different thresholds, different rates, and a different calculation base. Confusing the two is the most common (and most expensive) TDS mistake in property transactions.

Section 195 has no minimum threshold, so a buyer purchasing even a modest property from an NRI seller must deduct TDS, register for a TAN, and file the applicable TDS return. A buyer of the same property from a resident seller would only face those obligations above Rs 50 lakh.

TDS Rates for Non-Residents, FY 2026-27

Section 195 governs TDS on nearly every payment made to a non-resident, at rates that differ sharply from the resident TDS chart above. There is generally no threshold: TDS applies from the first rupee unless a specific carve-out or lower-deduction certificate applies.

A lower rate under a Double Taxation Avoidance Agreement (DTAA) applies wherever it is more favourable than the flat Section 195 rate, provided the recipient furnishes a Tax Residency Certificate and Form 10F.

TCS Rate Chart for FY 2026-27

Tax Collected at Source (TCS) sits under Section 394 of the Income Tax Act, 2025 (previously Section 206C). Unlike TDS, TCS is collected by the seller from the buyer, not deducted by the payer from the payee.

The Rs 10 lakh LRS threshold is cumulative across every purpose in the year: Rs 6 lakh for education plus Rs 5 lakh for medical treatment totals Rs 11 lakh, so TCS applies on the Rs 1 lakh above the limit. It is credited against your final tax liability, not an extra cost.

How to Pay TDS Online: Challan 281, Step by Step

TDS deducted in a month must be deposited with the government by the 7th of the following month (the 30th of April for TDS deducted in March). Payment is made entirely online through the Income Tax e-filing portal.

For property transactions under Section 194-IA, the buyer files Form 26QB (a combined challan-cum-return) instead of a separate challan and quarterly return, within 30 days of the end of the month in which TDS was deducted.

Interest and Penalty for Late TDS Deduction or Payment

Late TDS carries two different interest rates depending on which step was late: deducting the tax, or depositing it after deduction. Both are calculated per calendar month or part of a month, so a delay of even one day is charged as a full month.

Beyond interest, a deductor who fails to deduct or deposit TDS can be treated as an "assessee in default" under Section 201, face a penalty under Section 271C up to the tax not deducted, and lose the expense deduction under Section 40(a)(ia) until it is deposited.

How to Check TDS Credit and Claim a Refund

Every rupee of TDS deducted against your PAN is visible in two places on the e-filing portal: Form 26AS and the Annual Information Statement (AIS). Both update automatically once the deductor files their quarterly TDS return and it processes at the TDS reconciliation system.

Run your numbers through the Income Tax Calculator to see whether the TDS already deducted leaves you with a refund or a balance still payable.

New Forms Under the Income Tax Act 2025: Form 121, 149 and 168

The Income Tax Act, 2025 renamed several TDS-related forms alongside the section renumbering. These are the three most relevant to a payer or payee working through TDS compliance.

Form 121 and Form 149 are easy to conflate but serve different purposes. Form 121 is filed by the payee to prevent deduction in the first place; Form 149 is filed by the payer afterward, to resolve a shortfall that already happened.

TDS Worked Example: A Freelancer's Invoice Under Section 194J

A company pays a freelance consultant Rs 80,000 for a project. Since this is professional services, Section 194J(b) applies at 10% once payments in the year cross Rs 50,000.

Unlike a slab-based tax, once the Rs 50,000 threshold is crossed, TDS applies to the entire payment, not just the portion above it. The consultant then claims the Rs 8,000 as tax already paid when filing their ITR.

Frequently Asked Questions: TDS Rate Chart FY 2026-27

CAs and financial advisors can generate detailed Tax Optimization Reports comparing both regimes and reconciling TDS credits for all their clients at ca.fermor.in.