Income tax compliance | India
TDS Rates in India for FY 2026-27: Sections, Thresholds and Compliance
Tax deducted at source (TDS) requires specified payers to deduct income tax when making or crediting certain payments and deposit it with the Central Government. This guide explains the principal provisions, payment categories, reporting requirements and how to verify the applicable rate.
What is tax deducted at source?
TDS is a tax collection mechanism under which a person responsible for making a specified payment deducts tax at the prescribed rate, subject to conditions and thresholds. The amount deducted is generally credited to the recipient's tax account and can be claimed against the recipient's final tax liability, subject to statutory rules.
The older Income-tax Act, 1961 assigned provisions such as section 192 (salary), section 194A (certain interest), section 194C (contract payments), section 194H (commission), section 194-I (rent), section 194J (professional and technical fees) and section 195 (certain payments to non-residents). For FY 2026-27, consult the corresponding provisions of the Income-tax Act, 2025, effective from 1 April 2026, and related notifications rather than relying only on historical section numbers.
TDS reference chart: major payment categories
The following describes commonly encountered payment categories and indicative rates under the recent pre-transition regime. It is intentionally not labelled as a verified FY 2026-27 statutory rate chart; confirm the applicable rate, threshold, exceptions and section mapping under the law effective for the transaction.
| Earlier section reference | Nature of payment | Recent reference rate | Important condition / threshold |
|---|---|---|---|
| 192 | Salary | Applicable slab-based calculation | Estimated taxable salary after eligible deductions and reliefs |
| 193 | Interest on securities | Generally 10% | Security type and statutory exemptions matter |
| 194A | Interest other than interest on securities | Generally 10% | Threshold differs for banks, other payers and senior citizens |
| 194B | Lottery and specified winnings | Generally 30% | Special rules for winnings and benefits in kind |
| 194BB | Horse-race winnings | Generally 30% | Specified monetary threshold applies |
| 194C | Contractor / subcontractor payments | Generally 1% for individual / HUF payees; 2% for others | Single-payment and annual aggregate thresholds; transport exceptions |
| 194D | Insurance commission | Rate depends on payee category | Special rates and threshold; verify current provisions |
| 194EE | National Savings Scheme withdrawals | Generally 10% | Subject to prescribed conditions and exemptions |
| 194G | Commission on lottery-ticket sales | Generally 2% | Specified annual threshold |
| 194H | Commission or brokerage | Generally 2% | Specified annual threshold and exclusions |
| 194-I | Rent of land, building, furniture or fittings | Generally 10% | Annual threshold and payer conditions |
| 194-I | Rent of plant, machinery or equipment | Generally 2% | Annual threshold and payer conditions |
| 194J | Professional services and certain royalty payments | Generally 10% | Different rates for specified technical services and other categories |
| 194J | Specified technical services and certain other payments | Generally 2% in qualifying cases | Classification of services is important |
| 194J | Director's non-salary remuneration | Generally 10% | Specific provision may apply without ordinary fee threshold |
| 194LA | Compulsory acquisition of certain immovable property | Generally 10% | Agricultural land exclusion and statutory threshold |
| 194-IA | Transfer of qualifying immovable property | Generally 1% | Specified consideration / stamp-value threshold |
| 194Q | Purchase of goods by specified buyer | Generally 0.1% | Buyer turnover and annual purchase thresholds |
| 195 | Payments to non-residents chargeable to tax | Depends on income and law / treaty | Tax treaty, surcharge, cess and documentation may apply |
Indicative recent rates are not an exhaustive legal schedule and should not be used as a final deduction instruction. Some categories may be subject to special provisions, exemptions, surcharge, cess, treaty relief, lower-deduction certificates or changed rules.
What changed from the 2011-12 and 2012-13 charts?
The original webpage listed older thresholds such as Rs. 10,000 for certain bank interest, Rs. 75,000 as an annual contractor-payment limit and Rs. 1,80,000 for rent. Those figures are historical and are not reliable current thresholds. The original chart also referred to section 194F, an older provision that should not be treated as an active general TDS category without checking current law.
Legislation over subsequent years revised many thresholds and rates, introduced categories such as property transactions and purchase of goods, and changed reporting procedures. A further legislative transition applies from 1 April 2026. The correct method is to identify the payment date, payer, payee, residence status and payment type, then check the effective legislation and current official guidance.
How to comply with TDS requirements
- Identify the payment: Determine whether the transaction is covered, whether the recipient is resident or non-resident, and whether an exemption applies.
- Check the effective law: Verify the current section, threshold, rate and time of deduction, including PAN and higher-rate provisions.
- Obtain TAN where required: Most deductors need a Tax Deduction and Collection Account Number, although certain transaction-specific regimes use PAN-based reporting.
- Deduct and deposit: Deduct at the legally prescribed point and pay within the applicable due date using the prescribed challan and portal.
- File TDS statements: Submit the appropriate periodic statement, commonly Form 24Q for salary, Form 26Q for resident non-salary payments and Form 27Q for non-resident payments under the earlier framework, subject to current form rules.
- Issue certificates and reconcile: Provide the required TDS certificate and reconcile deductions with statements, Form 26AS and other available tax records.
PAN, higher rates and lower deduction
Failure to furnish PAN may attract a higher deduction rate under the applicable statutory rule. A valid lower- or nil-deduction certificate, where legally available, may change the amount deducted. Non-resident payments can also involve a tax treaty and separate compliance procedures.
Due dates, interest and penalties
Deposit dates, statement filing dates, interest for delayed deduction or remittance, late-filing fees and penalties are governed by the applicable law and rules. Because these may vary by payer and payment type, confirm the due dates on the official income-tax and TRACES websites rather than using a generic deadline.
Official legislation and online resources
- Income Tax Department e-Filing Portal - taxpayer services, TDS information and official updates.
- Income Tax Department - tax law, circulars and notifications.
- India Code - statutory text, including applicable income-tax legislation.
- TRACES - TDS reconciliation, certificates and deductor services.
- Protean Tax Information Network - PAN/TAN and related services.
Frequently asked questions
Does every business payment attract TDS?
No. TDS applies only where a statutory provision covers the payment and the relevant conditions are met. Some transactions fall outside TDS or qualify for an exemption.
Are the FY 2011-12 rates still valid?
No. The archival chart is retained in the page filename for continuity, but its old figures should not be used for current tax compliance.
Can a taxpayer claim TDS as a credit?
Generally yes, subject to the applicable credit rules, reporting and reconciliation of tax deducted and deposited.
Last reviewed: 8 October 2026. This article provides general information and is not a transaction-specific tax opinion.