TDS / TCS Rate Chart — FY 2026-27 (IT Act 2025)

The Income-tax Act, 2025 replaces the Income-tax Act, 1961 with effect from 1 April 2026 (FY 2026-27, AY 2027-28). The new Act consolidates the entire TDS chapter — old Sections 192 to 194T — into just two umbrella sections: Section 392 covers salary and EPF withdrawal, and Section 393 covers every other TDS via four sub-section Tables (resident, non-resident, lottery / horse race / online game / cash withdrawal / partner, and certain NR rentals). All TCS provisions of old Section 206C move into a single Section 394, and the no-PAN higher-rate rule of old Sections 206AA and 206CC merge into Section 397. The rates and thresholds themselves do not change — only the section numbering and structure.

Every old non-salary TDS section moves into Section 393. Section 194C (contractor) becomes Section 393(1) Sl. 6(i); Section 194J (professional / technical) becomes Section 393(1) Sl. 6(iii); Section 194Q (purchase of goods) becomes Section 393(1) Sl. 8(ii); Section 194-I (rent) becomes Section 393(1) Sl. 2; Section 194A (interest) becomes Section 393(1) Sl. 5; Section 194T (partner payments) becomes Section 393(3) Sl. 7; Section 195 (NR other) becomes Section 393(2) Sl. 17. The rate column on each row of this tool shows the new section reference next to the old number.

TDS (Tax Deducted at Source) is income tax deducted by the payer before paying the recipient — salary, contract fees, rent, interest, professional fees and similar. TCS (Tax Collected at Source) is tax collected by a seller from the buyer on specified transactions like sale of motor vehicles above ₹10 lakh, foreign remittance under LRS, scrap, liquor, tendu leaves and minerals. Both are governed by the Income Tax Act and deposited with the Government against the recipient’s PAN.

The FY 2025-26 chart (AY 2026-27) applies to payments made between 1 April 2025 and 31 March 2026, as amended by Finance Act 2025. Major changes include the new Section 194T for partnership firms, omission of Section 206AB / 206CCA and Section 206C(1H), revised thresholds for 194A senior citizens, 194-I rent, 194J professional fees and LRS TCS.

Section 194T is a new section introduced by Finance Act 2025, effective 1 April 2025. It requires partnership firms and LLPs to deduct TDS at 10% on payments to partners — salary, remuneration, bonus, commission and interest — when the aggregate exceeds ₹20,000 in a financial year. Earlier, no TDS was deducted on such partner payments.

No. Section 206C(1H) — TCS at 0.1% on sale of goods above ₹50 lakh — has been omitted with effect from 1 April 2025. For FY 2025-26 onwards, sellers are not required to collect TCS on sale of goods. The compliance is now handled entirely through buyer-side TDS u/s 194Q.

Under Section 206AA, if the payee fails to furnish PAN, TDS is deducted at the higher of: the rate specified in the relevant section, the rates in force, or 20%. For TCS, Section 206CC mirrors this rule — the higher of 2× the section rate or 5% is collected when PAN is missing.

Mostly yes, but a few sections differ. Section 194C charges 1% to individuals / HUF and 2% to other resident payees. Section 194D charges 2% to individuals and 10% to domestic companies (insurance commission). Non-resident payments under sections 195, 196B, 196C and 196D follow different rates and may be reduced by DTAA.

Yes. The threshold for TDS on interest income from banks, co-operative societies and post offices has been raised — for senior citizens from ₹50,000 to ₹1,00,000 and for others from ₹40,000 to ₹50,000. The threshold for interest from other payers has been raised from ₹5,000 to ₹10,000.

For FY 2025-26 the threshold has been raised from ₹7 lakh to ₹10 lakh per financial year. Remittances for education funded by a recognised education loan u/s 80E attract no TCS. Education / medical remittances above ₹10 lakh attract 5% TCS; any other purpose attracts 20%. Overseas tour packages attract 5% up to ₹10 lakh and 20% above.

TDS deducted in any month must be deposited by the 7th of the following month, except March — for which the due date is 30 April. For TDS u/s 194-IA, 194-IB and 194M, the deposit due date is 30 days from the end of the month in which TDS was deducted. Quarterly TDS returns (Form 24Q / 26Q / 27Q) are due by the 31st of the month following the quarter.

Yes. Under Sections 90 and 90A, the recipient may claim the lower of the section rate or the rate prescribed in the Double Taxation Avoidance Agreement (DTAA) between India and the recipient’s country, subject to furnishing a Tax Residency Certificate (TRC) and Form 10F.

Section 194Q is buyer-side TDS at 0.1% on purchase of goods above ₹50 lakh from a single seller, applicable if the buyer’s turnover exceeded ₹10 crore last year. Section 206C(1H) was seller-side TCS on the mirror transaction. From 1 April 2025, 206C(1H) is omitted — only 194Q TDS by the buyer continues. Earlier, if both applied to the same transaction, 194Q prevailed.

Yes. Section 194J applies. A client deducts 10% TDS on professional fees and 2% on technical / call-centre services once the aggregate payment in a financial year crosses ₹50,000 (raised from ₹30,000 in Budget 2025). Personal payments by individuals or HUF not under tax audit are exempt.

Under Section 194-IA, the buyer of any immovable property (other than agricultural land) above ₹50 lakh deducts 1% TDS on the total sale consideration. The TDS is deposited via Form 26QB within 30 days from the end of the month of payment, and Form 16B is issued to the seller from the TRACES portal.

If the tenant is a business under tax audit, Section 194-I applies — 10% on land/building rent, 2% on plant/machinery rent, deducted every month on rent above ₹50,000. If the tenant is an individual or HUF not under tax audit, Section 194-IB applies — 2% deducted once at year-end (or on vacating) via Form 26QC.

Log in to the income-tax portal (incometax.gov.in) with your PAN and view Form 26AS or the Annual Information Statement (AIS). Both show every TDS / TCS entry tagged to your PAN, the deductor TAN, the section, the amount and the credit quarter. Mismatches should be raised with the deductor before filing ITR.

Yes. If TDS deducted exceeds your final tax liability, the excess is refunded after filing your income tax return. The refund is credited directly to your bank account (validated on the portal). Interest u/s 244A is payable by the department on delayed refunds.

TDS still applies but with relief: under Section 194A, the interest TDS threshold is ₹1,00,000 (vs ₹50,000 for others) and senior citizens above 60 can submit Form 15H to stop TDS if total income is below the taxable limit. Specified senior citizens above 75 with only pension and interest from the same bank can use Section 194P for end-to-end relief.

Form 16 is the annual TDS certificate issued by an employer for salary deducted under Section 192. It has Part A (downloaded from TRACES, showing TDS challan details) and Part B (computation of taxable salary by employer). Employers must issue it by 15 June following the financial year.

Under Section 206AA (now Section 397(2) of IT Act 2025), TDS is deducted at the higher of: the relevant section rate, the rate in force, or 20%. For TCS without PAN, Section 206CC charges the higher of 2× the section rate or 5%. Always validate the deductee PAN on the income-tax portal before deduction.

Yes — from 1 April 2025 onward under the new Section 194T introduced by Finance Act 2025. Firms and LLPs deduct 10% TDS on salary, bonus, commission, remuneration and interest paid to partners once the aggregate exceeds ₹20,000 in a financial year. Before FY 2025-26 no TDS applied to such payments.

Section 194S (now Section 393(1) Sl. 8(vi) under IT Act 2025) charges 1% TDS on every transfer of a virtual digital asset — cryptocurrency, NFT or similar — by an Indian resident. The threshold is ₹50,000 / year for specified persons (small individuals / HUF) and ₹10,000 otherwise. Indian exchanges deduct on behalf of the buyer.

Under Section 206C(1F), sellers collect 1% TCS from the buyer when a motor vehicle is sold for more than ₹10 lakh. The TCS reflects in the buyer’s Form 26AS and is claimable against the total tax liability in the income tax return.

TDS rules apply on the underlying nature of the payment, not on the mode. A UPI or online bank transfer to a contractor still attracts Section 194C, to a professional still 194J, and to a property seller still 194-IA. Separately, Section 194N applies on cash withdrawals from banks above ₹1 crore (or ₹20 lakh for ITR non-filers).

Form 26AS is a consolidated annual tax statement on the income-tax portal showing every TDS, TCS, advance tax payment, refund and high-value transaction tagged to a PAN. Every deductor reports TDS quarterly in 24Q / 26Q / 27Q / 27EQ and the entries appear in your 26AS. Always reconcile 26AS with your records before filing ITR.