TDS Rate Chart FY 2026-27 – Latest Section-wise TDS Rates, Thresholds, Examples & Compliance Guide
Tax Deducted at Source or TDS is one of the most critical compliance areas for businesses, professionals, firms, and companies. Deducting incorrect TDS can lead to interest, penalty, disallowance of expense, and departmental notices.
This updated professional guide covers latest TDS rates for FY 2026-27, key thresholds, examples, due dates, important provisions, and a practical compliance checklist.
- What is TDS?
- TDS Rate Chart FY 2026-27
- TDS on Winnings
- TDS Due Dates
- TDS Return Due Dates
- Example 1 – Professional Fees
- Example 2 – Contractor Payment
- Example 3 – Rent Payment
- When TDS is Not Required
- Interest & Penalty
- TDS Compliance Checklist
- Common TDS Mistakes
- What You Learn from This Article
- Conclusion
What is TDS?
TDS means tax deducted at source at the time of payment or credit, as applicable, on specified transactions such as:
- Salary
- Professional fees
- Contractor payment
- Rent
- Interest
- Commission
- Purchase of goods
- Benefits or perquisites
- Virtual digital assets
The payer deducts tax and deposits it to the government within the prescribed due date.
TDS Rate Chart FY 2026-27 (Major Sections)
Salary – Section 192 / New Act Salary Withholding Provision
| Particular | TDS Rate | Threshold |
|---|---|---|
| Salary | As per slab | Basic exemption and estimated annual taxable salary |
TDS on salary is calculated on estimated annual income after considering eligible declarations and applicable tax regime.
Interest – Section 194A
| Particular | Threshold | Rate |
|---|---|---|
| Bank interest | ₹50,000 | 10% |
| Senior citizen | ₹1,00,000 | 10% |
| Other interest | ₹10,000 | 10% |
Dividend – Section 194
| Particular | Threshold | Rate |
|---|---|---|
| Dividend payment | ₹10,000 | 10% |
Contractor Payment – Section 194C
| Payee | Rate |
|---|---|
| Individual / HUF | 1% |
| Others | 2% |
Threshold:
- Single payment exceeds ₹30,000
- Aggregate annual payment exceeds ₹1,00,000
Professional Fees – Section 194J
| Type | Rate | Threshold |
|---|---|---|
| Technical services | 2% | ₹50,000 |
| Professional services | 10% | ₹50,000 |
Commission – Section 194H
| Particular | Threshold | Rate |
|---|---|---|
| Commission | ₹20,000 | 2% |
Rent – Section 194I
| Type | Threshold | Rate |
|---|---|---|
| Plant & machinery | ₹50,000 | 2% |
| Land & building | ₹50,000 | 10% |
Property Purchase – Section 194IA
| Particular | Threshold | Rate |
|---|---|---|
| Immovable property | ₹50 lakh | 1% |
Rent by Individual / HUF – Section 194IB
| Particular | Threshold | Rate |
|---|---|---|
| Rent above ₹50,000 per month | ₹50,000 per month | 2% |
Payment by Individual / HUF – Section 194M
| Particular | Threshold | Rate |
|---|---|---|
| Contract or professional payment | ₹50 lakh | 2% |
Purchase of Goods – Section 194Q
| Particular | Threshold | Rate |
|---|---|---|
| Purchase of goods | ₹50 lakh | 0.10% |
Generally applicable where buyer turnover exceeds ₹10 crore in the preceding financial year.
E-Commerce Operator – Section 194O
| Particular | Threshold | Rate |
|---|---|---|
| E-commerce participant | ₹5 lakh | 0.10% |
Benefit or Perquisite – Section 194R
| Particular | Threshold | Rate |
|---|---|---|
| Business benefit or perquisite | ₹20,000 | 10% |
Virtual Digital Asset – Section 194S
| Particular | Threshold | Rate |
|---|---|---|
| Crypto or VDA transfer | ₹10,000 | 1% |
| Specified person | ₹50,000 | 1% |
Partner Payment – Section 194T
| Particular | Threshold | Rate |
|---|---|---|
| Firm to partner payment | ₹20,000 | 10% |
TDS on Winnings
| Section | Type | Rate |
|---|---|---|
| 194B | Lottery | 30% |
| 194BA | Online gaming | 30% |
| 194BB | Horse race | 30% |
TDS Due Dates
| Month of Deduction | Due Date |
|---|---|
| April to February | 7th of next month |
| March | 30 April |
TDS Return Due Dates
| Quarter | Due Date |
|---|---|
| Q1 | 31 July |
| Q2 | 31 October |
| Q3 | 31 January |
| Q4 | 31 May |
Example 1 – Professional Fees
Professional fees = ₹1,00,000
TDS @ 10% = ₹10,000
Payment to party = ₹90,000
Example 2 – Contractor Payment
Contractor payment = ₹2,00,000
TDS @ 1% = ₹2,000
Net payment = ₹1,98,000
Example 3 – Rent Payment
Office rent = ₹60,000 per month
Annual rent = ₹7,20,000
TDS @ 10% = ₹72,000
Monthly deduction = ₹6,000
When TDS is Not Required
No TDS may be required in cases such as:
- Payment is below the applicable threshold limit
- Payment is made to government in specified situations
- Valid Form 15G or 15H is submitted, where legally permitted
- Lower or nil deduction certificate is available
- Income is exempt under the law
Interest & Penalty
| Default | Consequence |
|---|---|
| Late deduction | 1% per month or part thereof |
| Late deposit | 1.5% per month or part thereof |
| Late return filing | ₹200 per day, subject to conditions |
| Expense disallowance | 30% of expense may be disallowed in certain cases |
TDS Compliance Checklist
Before deducting TDS, check the following:
- Check the correct section
- Verify the threshold
- Check PAN details
- Apply the correct rate
- Deduct at the time of credit or payment, whichever is earlier, where applicable
- Deposit before the due date
- File TDS return on time
- Issue TDS certificate
Common TDS Mistakes
Avoid these common errors:
- Wrong section selection
- Missing threshold calculation
- Late deduction
- Not filing the return on time
- Wrong PAN of deductee
- Applying incorrect TDS rate
What You Learn from This Article
- Latest TDS rates FY 2026-27
- Section-wise TDS chart
- Threshold limits
- Practical examples
- TDS due dates
- Compliance checklist
Conclusion
TDS compliance is essential for businesses and professionals. Using an updated TDS Rate Chart for FY 2026-27 helps deduct tax correctly and reduces the risk of interest, penalty, and disallowance.
Before making any payment, always verify the correct section, threshold, due date, and rate. Where special cases apply, such as lower deduction certificate, non-resident payment, no-PAN cases, or challan-cum-statement transactions, an additional review is advisable.