TDS Rate Chart for Tax Year 2026–27: Rates, Thresholds and New Section Codes
AuthorPriyanka Chaudhari
Reviewed ByCA Ajay Savani
- Important Notes
- Latest TDS and TCS Updates from Union Budget 2026
- Key TCS Rate Changes in Budget 2026
- Transition from the Income-tax Act, 1961 to the Income-tax Act, 2025
- Revised TDS Threshold Limits: Before vs After Budget 2025
- TDS Rate Chart: Salary and Retirement Income
- TDS Rate Chart: Interest and Dividends
- TDS Rate Chart: Lottery, Gambling and Gaming
- TDS Rate Chart: Contractors, Manpower and Commission
- TDS Rate Chart: Professional Services and Royalties
- TDS Rate Chart: Rental Transactions
- TDS Rate Chart: Insurance, Savings and Compensation
- TDS Rate Chart: Business Trust, Investment Fund and Securitisation
- TDS Rate Chart: Other Resident Transactions
- General TDS Qualifications
- Section 195—Payment of Any Other Sum to a Non-Resident
- Other Non-Resident Sections
- What is a TDS rate chart?
- What TDS rate applies to professional fees?
- How do I know whether the new TDS rate chart applies to me?
- Sources and References
Tax Deducted at Source, or TDS, is a system under which the payer deducts tax while crediting or making a specified payment and deposits it with the government on behalf of the recipient. For most non-salary payments, TDS is deducted at the time of credit or payment, whichever is earlier, although different rules apply to salary and certain specified transactions.
TDS rates and threshold limits are prescribed under the income-tax law and may be revised through the annual Finance Act.
This blog shares the key and updated TDS rate chart applicable for Tax Year 2026–27, incorporating the changes introduced through Union Budget 2026, the Finance Act, 2026 and the Income-tax Act, 2025.
Important Notes
- If the TDS deducted from your income exceeds your final tax liability, you may claim the excess amount as a refund while filing your Income Tax Return.
- Form 121, which replaces Forms 15G and 15H, can be submitted only by eligible taxpayers for specified categories of income where the estimated tax liability for the tax year is nil.
- For individuals below 60 years and other eligible persons, such as HUFs and trusts, the aggregate specified income must generally not exceed the maximum amount not chargeable to tax. Senior citizens aged 60 years or above may submit Form 121 where their estimated tax liability is nil.
- Form 121 is not a general declaration that can be used against every type of payment. A valid PAN and the other prescribed eligibility conditions must be satisfied.
- Form 168, which replaces Form 26AS, is the Annual Information Statement. It contains prescribed information relating to TDS, TCS, tax payments, specified financial transactions, demand and refund details and other tax-related information associated with the taxpayer.
- Form 130, which replaces Form 16, is issued for TDS deducted from salary paid to an employee, pension and eligible pension or interest income of a specified senior citizen.
- Where the deductee does not furnish a valid PAN, tax may have to be deducted at the higher rate prescribed under the income-tax law. Special rate caps may apply to certain transactions.
- Eligible taxpayers may also apply for a lower or nil TDS certificate where the prescribed conditions are satisfied.
Latest TDS and TCS Updates from Union Budget 2026
The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman on 1 February 2026, proposed several targeted changes to the TDS and TCS framework. These proposals were subsequently enacted through the Finance Act, 2026.
Together with the Income-tax Act, 2025, which came into force on 1 April 2026, these changes apply to transactions governed by the new tax law during Tax Year 2026–27.
Transactions relating to tax years beginning before 1 April 2026 continue to be governed by the Income-tax Act, 1961, subject to the applicable transition provisions.
Key TCS Rate Changes in Budget 2026
Budget 2026 rationalised TCS rates to 2% across several categories. Here is the before-and-after comparison:
These TCS provisions apply from 1 April 2026 under Section 394 of the Income-tax Act, 2025.
| TCS Category | Rate Before Budget 2026 | Rate From 1 April 2026 | Impact |
| Alcoholic liquor for human consumption | 1% | 2% | Increased rate for liquor sellers |
| Tendu leaves | 5% | 2% | Relief for forest-produce traders |
| Timber and specified forest produce | 2% | 2% | No change |
| Scrap | 1% | 2% | Increased rate for scrap sellers |
| Minerals—coal, lignite and iron ore | 1% | 2% | Uniform rate for mineral sellers |
| Overseas tour programme packages | 5% up to ₹10 lakh and 20% above ₹10 lakh | Flat 2% with no threshold | Reduced TCS burden for travellers |
| LRS—education and medical purposes | 5% above ₹10 lakh | 2% above ₹10 lakh | Relief for eligible remitters |
| LRS—other purposes | 20% above ₹10 lakh | 20% above ₹10 lakh | No change |
| Parking lot, toll plaza, mining and quarrying | 2% | 2% | No change |
| Sale of motor vehicle | 1% above ₹10 lakh | 1% above ₹10 lakh | No change |
Transition from the Income-tax Act, 1961 to the Income-tax Act, 2025
From Tax Year 2026–27, the TDS and TCS provisions and forms are governed by the Income-tax Act, 2025 and the Income-tax Rules, 2026.
Here is the mapping of key provisions:
| Old Act or Form | New Act or Form | Coverage |
| Sections 192 and 192A | Section 392 | Salary and provident-fund TDS |
| Sections 193, 194, 194A–194T, 195 and 196A–196D | Section 393 | Non-salary TDS payments |
| Section 206C | Section 394 | Tax Collected at Source |
| Forms 15G and 15H | Form 121 | Declaration by an eligible taxpayer for specified income without TDS |
| Form 16 | Form 130 | TDS certificate for salary, pension and specified senior-citizen income |
| Form 24Q | Form 138 | Quarterly TDS statement for salary and specified senior-citizen income |
| Form 26Q | Form 140 | Quarterly TDS statement for non-salary resident payments |
| Forms 26QB, 26QC, 26QD and 26QE | Form 141 | Challan-cum-TDS statement |
| Form 26A | Form 149 | Accountant’s certificate for relief from being treated as an assessee in default |
| Form 26AS | Form 168 | Annual Information Statement |
| Forms 3CA, 3CB and 3CD | Form 26 | Tax audit report and statement of particulars |
Important: Payroll, accounting and ERP systems should be updated to use the applicable payment codes, form structures and Section 393 table serial numbers prescribed for Tax Year 2026–27. Businesses should follow the latest return utilities and validation rules notified by the Income Tax Department.
Note: References to provisions under the Income-tax Act, 1961 are used throughout this article to help taxpayers and professionals identify the corresponding payment categories during the transition.
Revised TDS Threshold Limits: Before vs After Budget 2025
Union Budget 2025, presented on 1 February 2025, introduced significant threshold changes effective from 1 April 2025. These thresholds continue to apply for Tax Year 2026–27 because Budget 2026 did not alter them.
| Section under IT Act, 1961 | Payment Category | Before 1 April 2025 | From 1 April 2025 |
| 193 | Interest on securities | Nil | ₹10,000 |
| 194A | Interest—senior citizen, paid by bank, co-operative bank or post office | ₹50,000 | ₹1,00,000 |
| 194A | Interest—other recipients, paid by bank, co-operative bank or post office | ₹40,000 | ₹50,000 |
| 194A | Interest—other cases | ₹5,000 | ₹10,000 |
| 194 | Dividend to an eligible individual shareholder | ₹5,000 | ₹10,000 |
| 194K | Income from mutual-fund units | ₹5,000 | ₹10,000 |
| 194B | Lottery, crossword, gambling and similar winnings | ₹10,000 aggregate during the year | ₹10,000 per single transaction |
| 194BB | Horse-race winnings | ₹10,000 aggregate during the year | ₹10,000 per single transaction |
| 194D | Insurance commission | ₹15,000 | ₹20,000 |
| 194G | Commission on lottery tickets | ₹15,000 | ₹20,000 |
| 194H | Commission or brokerage | ₹15,000 | ₹20,000 |
| 194-I | Rent | ₹2,40,000 per financial year | ₹50,000 per month or part of a month |
| 194J | Fees for professional or technical services | ₹30,000 | ₹50,000 |
| 194LA | Income by way of compulsory acquisition compensation | ₹2,50,000 | ₹5,00,000 |
The ₹50,000 threshold for professional and technical services does not apply to fees, remuneration or commission paid to a company director.
TDS Rate Chart for Residents: Tax Year 2026–27
Below is the key TDS rate chart for resident payees, covering major payment categories. The payer, payee, transaction and statutory conditions must be checked before applying a rate.
TDS Rate Chart: Salary and Retirement Income
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 192 | Salary | TDS applies where estimated salary income results in a tax liability | Applicable slab rates |
| 192A | Taxable premature withdrawal from EPF | ₹50,000 | 10% |
TDS Rate Chart: Interest and Dividends
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 193 | Interest on securities | ₹10,000 | 10% |
| 194 | Dividend paid to an eligible resident individual through a mode other than cash | ₹10,000 | 10% |
| 194 | Other taxable dividend payments | No threshold | 10% |
| 194A | Interest on bank, co-operative bank or post-office deposits | ₹50,000 | 10% |
| 194A | Interest on bank, co-operative bank or post-office deposits—senior citizen | ₹1,00,000 | 10% |
| 194A | Interest in other cases | ₹10,000 | 10% |
| 194K | Income in respect of units of a mutual fund, specified company or undertaking, excluding income in the nature of capital gains | ₹10,000 | 10% |
No TDS is required under the mutual-fund-unit provision where the income is in the nature of capital gains.
TDS Rate Chart: Lottery, Gambling and Gaming
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194B | Lottery, game shows, crossword puzzles, card games and gambling winnings | ₹10,000 per single transaction | 30% |
| 194BA | Net winnings from online gaming | No monetary threshold; TDS applies to net winnings | 30% |
| 194BB | Winnings from horse races | ₹10,000 per single transaction | 30% |
TDS Rate Chart: Contractors, Manpower and Commission
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194C | Payment to contractors or subcontractors | ₹30,000 for a single payment or ₹1,00,000 aggregate during the tax year | 1% for an individual or HUF contractor; 2% for other contractors |
| 194C | Supply of manpower services, expressly included within “work” from 1 April 2026 | ₹30,000 for a single payment or ₹1,00,000 aggregate during the tax year | 1% for an individual or HUF contractor; 2% for other contractors |
| 194D | Insurance commission | ₹20,000 | 5% where the resident payee is a person other than a domestic company; 10% where the resident payee is a domestic company |
| 194G | Commission on lottery tickets | ₹20,000 | 2% |
| 194H | Commission or brokerage | ₹20,000 | 2% |
| 194M | Payment by an individual or HUF for contracts, brokerage or professional fees | ₹50,00,000 | 2% |
Note: The insurance-commission provision applies to payments made to resident payees. Payments to non-residents are governed by the relevant non-resident TDS provisions.
TDS Rate Chart: Professional Services and Royalties
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194J | Fees for technical services, royalty for the sale, distribution or exhibition of cinematographic films and payments to qualifying call centres | ₹50,000 | 2% |
| 194J | Fees for professional services and other royalties | ₹50,000 | 10% |
| 194J | Fees, remuneration or commission paid to a company director | No threshold | 10% |
TDS Rate Chart: Rental Transactions
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194-I(a) | Rent for plant, machinery or equipment paid by a specified payer | ₹50,000 per month or part of a month | 2% |
| 194-I(b) | Rent for land, building, furniture or fittings paid by a specified payer | ₹50,000 per month or part of a month | 10% |
| 194-IA | Transfer of immovable property other than agricultural land | Sale consideration or stamp-duty value, whichever is higher, of ₹50,00,000 or more | 1% of consideration or stamp-duty value, whichever is higher |
| 194-IB | Rent paid by an individual or HUF not covered under the regular rent-TDS provision | ₹50,000 per month or part of a month | 2% |
| 194-IC | Monetary consideration under a specified Joint Development Agreement | No threshold | 10% |
TDS Rate Chart: Insurance, Savings and Compensation
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194DA | Taxable payment received from a life-insurance policy | ₹1,00,000 | 2% on the income component |
| 194EE | Payment from the National Savings Scheme | ₹2,500 | 10% |
| 194LA | Compensation on compulsory acquisition of immovable property other than agricultural land | ₹5,00,000 | 10% |
| — | Interest on MACT compensation awarded to an individual | No TDS, irrespective of amount | Nil |
| — | Interest on MACT compensation awarded to a person other than an individual | ₹50,000 | TDS under the applicable interest provision; ordinarily 10% for a resident payee, subject to other conditions |
Interest on compensation awarded by a Motor Accidents Claims Tribunal to an individual or the individual’s legal heir is exempt from income tax from Tax Year 2026–27.
The exemption does not extend to non-individual recipients. For such recipients, TDS continues to apply where the interest exceeds ₹50,000 during the relevant tax year.
TDS Rate Chart: Business Trust, Investment Fund and Securitisation
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194LBA | Certain taxable income from units of a business trust paid to a resident | No threshold | 10% |
| 194LBB | Taxable income from units of an investment fund paid to a resident | No threshold | 10% |
| 194LBC | Income from investment in a securitisation trust paid to a resident | No threshold | 10% |
Applicable exemptions and pass-through conditions must be considered before deducting tax.
TDS Rate Chart: Other Resident Transactions
| Section under IT Act, 1961 | Transaction Type | Threshold Limit | TDS Rate |
| 194N | Cash withdrawal from a bank, co-operative bank or post office | ₹1,00,00,000; ₹3,00,00,000 for a co-operative society | 2% |
| 194O | Payment by an e-commerce operator to a resident individual or HUF participant who furnishes PAN or Aadhaar | ₹5,00,000 | 0.1% |
| 194O | Payment to other resident e-commerce participants | No threshold | 0.1% |
| 194P | Tax deduction by a specified bank for an eligible resident senior citizen aged 75 years or above | Based on total taxable income | Applicable slab rates |
| 194Q | Purchase of goods by an eligible buyer | TDS applies to the purchase amount exceeding ₹50,00,000 | 0.1% |
| 194R | Business or professional benefits or perquisites | ₹20,000 | 10% |
| 194S | Transfer of a virtual digital asset—payment by a person other than a specified person | ₹10,000 | 1% |
| 194S | Transfer of a virtual digital asset—payment by a specified person | ₹50,000 | 1% |
| 194T | Salary, remuneration, commission, bonus or interest paid or credited by a firm to a partner | ₹20,000 | 10% |
Important Conditions for the Purchase-of-Goods Provision
The purchase-of-goods TDS provision applies only where the buyer’s total sales, gross receipts or turnover from business exceeded ₹10 crore during the immediately preceding tax year.
TDS is deducted at 0.1% on the portion of purchases exceeding ₹50 lakh during the tax year. The provision does not apply where tax is deductible or collectible under another applicable provision, subject to the statutory rules.
Important Conditions for Specified Senior Citizens
For the specified-bank provision to apply, the taxpayer must:
- Be a resident individual aged 75 years or above at any time during the tax year.
- Receive pension income from a specified bank.
- Have no other income except interest from an account maintained with the same specified bank.
- Furnish the prescribed declaration to the bank.
The earlier higher cash-withdrawal TDS rates linked to non-filing of income-tax returns are not included in Section 393 of the Income-tax Act, 2025. The standard rate for Tax Year 2026–27 is 2% above the applicable ₹1 crore or ₹3 crore threshold.
General TDS Qualifications
The rates in the resident tables are subject to the relevant statutory conditions and exceptions.
A lower or nil deduction certificate may apply in eligible cases. No deduction may also be required where an exemption under Section 393 is available.
Where the recipient does not furnish a valid PAN, TDS may be deducted at the higher rate prescribed under the Act.
TDS Rate Chart for Non-Residents: Tax Year 2026–27
For payments made to non-residents, TDS is generally deducted at the domestic rate prescribed under the income-tax law or at the applicable Double Taxation Avoidance Agreement rate, whichever is more beneficial to the non-resident, subject to the prescribed treaty conditions.
The rates shown below are base domestic tax rates. Applicable surcharge and 4% health and education cess may increase the effective TDS rate.
There is generally no basic threshold exemption for many payments made to non-residents. However, tax is ordinarily deductible only where the payment or the relevant portion of the payment is chargeable to tax in India, unless a specific provision states otherwise.
| Section under IT Act, 1961 | Payment Type | Base TDS Rate |
| 192 | Salary payment | Applicable slab rate |
| 192A | Taxable payment of accumulated provident-fund balance | 10% |
| 194B | Lottery, crossword, card-game, gambling or betting winnings | 30% |
| 194BA | Net winnings from an online game | 30% |
| 194BB | Winnings from horse races | 30% |
| 194E | Payment to a non-resident sportsperson, sports association or entertainer | 20% |
| 194EE | Payment in respect of deposits under the National Savings Scheme | 10% |
| 194G | Commission on the sale of lottery tickets | 2% |
| 194LB | Interest paid by an infrastructure debt fund | 5% |
| 194LBA | Business-trust interest distributed by an SPV | 5% |
| 194LBA | Business-trust dividend distributed by an SPV | 10% |
| 194LBA | Taxable rental or other income distributed by a business trust | 30% for a non-company non-resident; 35% for a foreign company |
| 194LBB | Taxable investment-fund income paid to a non-resident unit holder | 30% for a non-company non-resident; 35% for a foreign company |
| 194LBC | Income from investment in a securitisation trust | 30% for a non-company non-resident; 35% for a foreign company |
| 194LC | Interest on specified foreign-currency loans, long-term bonds or rupee-denominated bonds | 5% |
| 194LC | Interest on qualifying bonds listed on an IFSC stock exchange and issued from 1 April 2020 to 30 June 2023 | 4% |
| 194LC | Interest on qualifying IFSC-listed bonds issued on or after 1 July 2023 | 9% |
| 194LD | Interest on specified rupee-denominated bonds or government securities paid to an FII or QFI | 5% |
| 194N | Cash withdrawal exceeding ₹1 crore, or ₹3 crore for a co-operative society | 2% |
| 194T | Salary, remuneration, commission, bonus or interest paid to a non-resident partner exceeding ₹20,000 | 10% |
The above rates are subject to the applicable exemptions, conditions, surcharge, cess and treaty relief.
Section 195—Payment of Any Other Sum to a Non-Resident
| Nature of Payment | Base TDS Rate |
| Investment income earned by a non-resident Indian citizen | 20% |
| Long-term capital gains covered by the special NRI provision corresponding to former Section 115E | 12.5% |
| Long-term capital gains corresponding to former Section 112(1)(c)(iii) | 12.5% |
| Long-term capital gains corresponding to former Section 112A exceeding ₹1,25,000 | 12.5% |
| Short-term capital gains corresponding to former Section 111A | 20% |
| Other long-term capital gains | 12.5% |
| Specified dividend from an International Financial Services Centre | 10% |
| Other dividend income | 20% |
| Interest on foreign-currency borrowings, excluding interest covered by special 5%, 4% or 9% provisions | 20% |
| Royalty for transfer or licensing of specified book copyrights or computer software | 20% |
| Other royalty income under an eligible government-approved agreement or industrial policy | 20% |
| Fees for technical services under an eligible government-approved agreement or industrial policy | 20% |
| Lottery, gambling and similar winnings | 30% |
| Horse-race winnings | 30% |
| Net online-gaming winnings | 30% |
| Other income paid to a non-company non-resident | 30% |
| Other income paid to a foreign company | 35% |
Important Notes for Non-Resident Payments
- The rates listed above are base domestic tax rates. Applicable surcharge and 4% health and education cess may increase the effective TDS rate.
- Tax may be deducted at the rate provided under the applicable Double Taxation Avoidance Agreement if the treaty rate is more beneficial than the domestic rate and the non-resident satisfies the prescribed conditions.
- Treaty relief generally requires a valid Tax Residency Certificate and the other prescribed information and documentation.
- TDS on a payment to a non-resident ordinarily applies only to the portion that is chargeable to tax in India. Eligible applicants may seek determination of the appropriate taxable proportion or a lower or nil deduction certificate.
- Where a non-resident does not furnish PAN, the higher-rate provisions must be checked along with any applicable relaxation provided under the rules.
Other Non-Resident Sections
| Section under IT Act, 1961 | Payment Type | Base TDS Rate |
| 196A | Income in respect of mutual-fund or specified-company units paid to a non-resident | 20% |
| 196B | Income from offshore-fund units corresponding to former Section 115AB(1)(i) | 10% |
| 196B | Long-term capital gains on transfer of offshore-fund units | 12.5% |
| 196C | Interest or dividend income from eligible bonds or Global Depository Receipts | 10% |
| 196C | Long-term capital gains from transfer of eligible bonds or Global Depository Receipts | 12.5% |
| 196D | Income of a Foreign Institutional Investor from securities, excluding dividend and capital gains | 20% |
| 196D(1A) | Specified securities income payable to an eligible specified fund | 10% |
Applicable surcharge and health and education cess must be added where required. Treaty benefits may be available subject to eligibility and documentation.
TCS Rate Chart: Tax Year 2026–27—Updated After Budget 2026
With effect from 1 April 2026, TCS provisions fall under Section 394 of the Income-tax Act, 2025, replacing Section 206C of the Income-tax Act, 1961.
Budget 2026 rationalised several TCS rates to 2%.
| Section under Old Act | Particulars | Threshold Limit | TCS Rate From 1 April 2026 |
| 206C(1) | Alcoholic liquor for human consumption | No threshold | 2%, increased from 1% |
| 206C(1) | Tendu leaves | No threshold | 2%, reduced from 5% |
| 206C(1) | Timber obtained under a forest lease or otherwise | No threshold | 2%, unchanged |
| 206C(1) | Other forest produce, excluding timber and tendu leaves, obtained under a forest lease | No threshold | 2%, unchanged |
| 206C(1) | Scrap | No threshold | 2%, increased from 1% |
| 206C(1) | Minerals—coal, lignite and iron ore | No threshold | 2%, increased from 1% |
| 206C(1C) | Use of a parking lot, toll plaza, mine or quarry for business, excluding mining and quarrying of mineral oil, petroleum and natural gas | No threshold | 2% |
| 206C(1F) | Sale of a motor vehicle | Sale consideration exceeding ₹10 lakh | 1% |
| 206C(1G) | Foreign remittance under LRS for education or medical treatment | Amount exceeding ₹10 lakh | 2%, reduced from 5% |
| 206C(1G) | Foreign remittance under LRS for other purposes | Amount exceeding ₹10 lakh | 20% |
| 206C(1G) | Overseas tour programme package | No threshold | 2%, reduced from the earlier 5% and 20% rates |
No TCS is applicable to an LRS remittance for education where the amount being remitted is financed through a qualifying loan obtained from a specified financial institution.
No TCS is applicable to the first five specified goods categories where the buyer is a resident and furnishes the prescribed declaration confirming that the goods are purchased for manufacturing, processing, production or power generation and not for trading.
The declaration must be furnished in the prescribed form and manner. The buyer must provide a valid PAN.
Higher TCS may apply where the collectee does not furnish a valid PAN, subject to the applicable statutory rate and cap.
Find Related Resources
Section 194T: TDS on Partnership Firms
FAQs on TDS Rate Chart
What is a TDS rate chart?
A TDS rate chart lists the applicable rates and threshold limits for tax deduction on different categories of payments. From Tax Year 2026–27, salary TDS is primarily governed by Section 392, while other major TDS payments are consolidated under Section 393 of the Income-tax Act, 2025.
The actual applicability of TDS depends on the payer, recipient, nature of payment, residential status, threshold, exemptions and other statutory conditions.
What TDS rate applies to professional fees?
Professional fees corresponding to former Section 194J generally attract TDS at 10%, subject to the ₹50,000 threshold. Other specified services attract 2% TDS, subject to applicable conditions.
How do I know whether the new TDS rate chart applies to me?
First identify the nature of the payment, such as salary, interest, rent, commission, professional fees, purchase of goods or contractual payments.
You must then check:
- Whether the payer is required to deduct TDS.
- Whether the recipient is a resident or non-resident.
- Whether the payment is chargeable to tax.
- Whether the applicable threshold has been crossed.
- Whether an exemption, Form 121 declaration or lower or nil deduction certificate applies.
- Whether a DTAA rate applies to a non-resident.
- Whether a valid PAN has been furnished.
A payment does not automatically become subject to TDS merely because it exceeds a threshold. All applicable legal conditions must be considered before deducting tax.
Sources and References
The TDS rates, TCS rates, thresholds, new section codes, forms and Budget changes discussed in this article are based on the following official Government of India sources.
1. Union Budget 2026–27
- Union Budget 2026–27 Speech
Supports the Budget 2026 announcements and the policy context behind the TDS and TCS changes. - Memorandum Explaining the Provisions of the Finance Bill, 2026
Supports the revised TCS rates, overseas tour package provisions, LRS changes, manpower-service clarification, MACT compensation treatment and other Budget proposals. - Finance Bill, 2026
Contains the legislative text of the direct-tax amendments proposed through Union Budget 2026.
2. Income-tax Act, 2025
- Income-tax Act, 2025, as Amended by the Finance Act, 2026
Primary statutory source for Sections 392, 393, 394 and 402, along with the resident and non-resident TDS and TCS provisions applicable from 1 April 2026. - Section 393: Non-Salary TDS Payments
Supports the rates and thresholds for interest, rent, commission, professional services, contractual payments, winnings and other non-salary payments. - Income-tax Act, 2025 Resource Centre
Provides access to the Act, section comparisons, guidance notes, forms and related statutory resources.
3. Transition from the Income-tax Act, 1961
- FAQs on Interplay and Transition to the Income-tax Act, 2025
Supports the transition rules for transactions, deductions, returns and payments occurring before and after 1 April 2026. - Income-tax Act, 2025 Comes into Force from 1 April 2026
Confirms the commencement of the new income-tax law from Tax Year 2026–27.
4. Income-tax Rules and New Forms
- Income-tax Rules, 2026
Primary source for the rules, procedures, declarations, certificates and reporting forms applicable from 1 April 2026. - FAQs and Guidance Notes on Forms under the Income-tax Rules, 2026
Supports the mapping and use of Forms 121, 130, 138, 140, 141, 149, 168 and other forms introduced under the new Rules. - Income Tax Forms, 2026
Provides access to the officially prescribed forms applicable under the Income-tax Rules, 2026. - Income Tax Forms FAQs
Supports the filing and transition guidance for forms submitted on or after 1 April 2026. - Form 121 FAQs
Supports the eligibility conditions and use of Form 121, which replaces Forms 15G and 15H under the new framework. - TDS Compliance FAQs
Supports the requirements relating to TDS statements, challan-cum-statements, certificates and Annual Information Statements.
5. Official TDS Rates and Thresholds
- Official TDS Rate Chart
Supports the resident and non-resident TDS rates, including rates for salary, interest, contracts, professional services, rent, capital gains and payments under Section 195. - FAQs on Tax Deducted at Source
Supports the general TDS mechanism, timing of deduction, PAN requirements, thresholds, certificates and deductor responsibilities. - Tax Deduction at Source Guidance
Provides payment-wise explanations of the applicable TDS rates, thresholds, deduction timing and exemptions. - Official TDS and TCS Payment Guidance
Provides guidance on depositing TDS and TCS and fulfilling related compliance requirements. - Official Threshold Limits under the Income-tax Act
Supports the monetary limits applicable to interest, rent, commission, professional fees, compulsory acquisition compensation and other payments. - Official TDS Calculator
Helps taxpayers estimate the applicable TDS on specified resident and non-resident payments.
6. Budget 2025 TDS Threshold Revisions
- Union Budget 2025–26 Documents
Provides access to the official Budget documents introducing the revised TDS thresholds effective from 1 April 2025. - Memorandum Explaining the Provisions of the Finance Bill, 2025
Supports the revised thresholds for interest, dividend, rent, insurance commission, brokerage, professional services and compulsory acquisition compensation. - Income Tax Department Brief on Budget Changes
Summarises the TDS threshold revisions introduced through Budget 2025.
7. Official TCS Rates
- Official TCS Rate Chart
Supports the TCS rates and thresholds for LRS remittances, overseas tour packages, motor vehicles and other specified transactions. - Income-tax Act, 2025—Section 394
Primary statutory source for TCS provisions applicable from 1 April 2026, including liquor, tendu leaves, timber, scrap, minerals, LRS and overseas tour programme packages.
8. Non-Resident TDS and DTAA
- Official TDS Rates for Non-Resident Payments
Supports the domestic withholding-tax rates applicable to non-resident payments, including Section 195 transactions. - Taxation of Non-Residents
Provides official guidance on taxable income, withholding obligations and return-filing requirements for non-residents. - Double Taxation Avoidance Agreements
Provides access to India’s tax treaties and resources for comparing domestic and treaty rates. - Domestic Tax Rates versus DTAA Rates
Supports the principle that an eligible non-resident may apply a beneficial treaty rate, subject to the applicable documentation and statutory conditions. - Double Taxation Relief and Tax Residency Certificate Requirements
Supports the requirement for a Tax Residency Certificate and other prescribed documentation when claiming treaty benefits.
9. Specific Transaction Guidance
- TDS on Purchase of Goods
Supports the ₹50 lakh purchase threshold, ₹10 crore buyer-turnover condition and 0.1% TDS rate corresponding to former Section 194Q. - TDS on Purchase of Immovable Property
Supports the 1% deduction requirement and ₹50 lakh consideration or stamp-duty-value condition corresponding to former Section 194-IA. - TDS on Cash Withdrawals
Last reviewed: 16 July 2026
Disclaimer: "This blog post is for informational purposes only. For specific tax advice related to your business, please consult a qualified Chartered Accountant or GST practitioner."
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