Comprehensive TDS Rate Guide for Assessment Year 2026-27

This guide consolidates the Tax Deducted at Source (TDS) rates applicable for Assessment Year 2026-27, reflecting amendments introduced by the Finance Act, 2026 to the Income Tax Act 1961. It is structured as a ready-reference for deductors, assessee and tax professionals, covering both resident and non-resident payees, as well as domestic and foreign companies.

The compilation maps out TDS rates, thresholds, and key conditions for a wide spectrum of payments such as:

  • Salary
  • Interest and dividends
  • Contracts and sub-contracts
  • Professional and technical fees
  • Rent
  • Commissions
  • Lottery and betting winnings
  • Online gaming
  • Virtual Digital Assets (VDA)
  • E-commerce transactions
  • Purchase of goods
  • Business benefits/perquisites
  • Payments to partners
  • Transfers and other sums to non-residents

It also notes important effective dates, exceptions, special provisions like Section 194T, Section 194S, Section 194Q, Section 194R, Section 194P and Section 195, and highlights surcharge and Health & Education Cess implications for non-residents and foreign entities where relevant.

Note: This is an informative reference. Users should cross-check with the latest statutory text, rules, circulars, and notifications for compliance purposes.

1. TDS Rates for Persons Other Than Companies

1.1 Individual / HUF / Firm / Other Non-Company Cases – Resident Payees

Below are the rates for deduction of tax at source where the payee is resident in India and payer is a person other than a company, for AY 2026-27:

Salary and Provident Fund

  • Section 192: Salary payments

    • TDS shall be deducted as per normal slab rates applicable to the assessee.

  • Section 192A: Taxable accumulated balance of recognised provident fund paid to an employee

    • TDS Rate: 10%

Interest and Dividend Income

  • Section 193 – Interest on securities

    1. Interest on debentures or securities issued by/for any local authority or statutory corporation (established by Central/State/Provincial Act) – 10%
    2. Interest on listed debentures issued by a company in accordance with the Securities Contracts (Regulation) Act, 1956 – 10%
    3. Interest on Central or State Government securities (including 8% Savings (Taxable) Bonds, 2003; 7.75% Savings (Taxable) Bonds, 2018; Floating Rate Savings Bonds, 2020 (Taxable); and other notified securities) – 10%
    4. Interest on any other security – 10%

  • Section 194: Dividend income – 10%

  • Section 194A: Interest other than “interest on securities” – 10%

Winnings from Lottery, Games, Betting and Online Gaming

  • Section 194B: Winnings from lotteries, crossword puzzles, card games, other games, gambling or betting – 30%

  • Section 194BA: Winnings from any online game – 30%

  • Section 194BB: Winnings from horse races – 30%

Contract Payments and Professional Services

  • Section 194C: Payments to contractors / sub-contractors

    1. Where payee is an Individual or HUF – 1%
    2. Any other category of payee – 2%

  • Section 194J: Fees for professional or technical services, royalty, etc.

    1. Fees for technical services – 2%
    2. Royalty for sale, distribution, or exhibition of cinematographic films – 2%
    3. Any other sum under this section – 10%

    From 01-06-2017, where the payee is engaged in call centre operations, the TDS rate is 2%.

Insurance, Commission, Rent, and Similar Payments

  • Section 194D: Insurance commission – 5%

  • Section 194DA: Payment under life insurance policy (for taxable portion in pay-out) – 2%

  • Section 194EE: Payment in respect of deposit under National Savings Scheme – 10%

  • Section 194F: Payment on repurchase of units by Mutual Fund or Unit Trust of India – 20%

    This section ceases to apply from 01-10-2024.

  • Section 194G: Commission or other payments for sale of lottery tickets – 2%

  • Section 194H: Commission or brokerage – 2%

  • Section 194-I: Rent

    1. For plant and machinery – 2%
    2. For land, building, furniture, or fittings – 10%

  • Section 194-IA: TDS on transfer of certain immovable property (other than agricultural land) – 1%

  • Section 194-IB: Rent paid by Individual/HUF not liable to tax audit – 2%

  • Section 194-IC: Monetary consideration under Joint Development Agreements – 10%

Income from Units, Compensation and Business Trusts

  • Section 194K: Income in respect of units payable to a resident – 10%

  • Section 194LA: Compensation on acquisition of certain immovable property – 10%

  • Section 194LBA(1): TDS by business trust on:

    • Interest from SPV, or
    • Rental income from real estate assets held directly by it, distributed to unit holders – 10%

  • Section 194LBB: Income (not exempt under Section 10(23FBB)) distributed by investment fund to unit holder – 10%

  • Section 194LBC: Income from investments in a securitisation trust (as per Explanation to Section 115TCA) – 10%

Payments by Individuals/HUF Not Otherwise Liable to Deduct TDS

  • Section 194M: TDS on commission (other than insurance commission), brokerage, contractual fee, professional fee paid by individual or HUF not otherwise covered under Section 194C, Section 194H, or Section 194J.
    • Applicable when aggregate payment during a financial year exceeds Rs. 50 lakh.
    • TDS Rate: 2%

Cash Withdrawals from Banks, Co-operative Banks, and Post Offices

  • Section 194N: TDS on cash withdrawals from one or more accounts with a banking company, co-operative bank, or post office:

    1. For regular filers

      • When cash withdrawals exceed Rs. 1 crore during the previous year – 2%

    2. For persons who have not filed ITR for preceding 3 assessment years (and due dates under Section 139(1) have expired):

      • If aggregate withdrawals exceed Rs. 20 lakhs during the year – TDS @ 2% on the withdrawal amount
      • If aggregate withdrawals exceed Rs. 1 crore – TDS @ 5%

    For co-operative societies, the basic threshold of Rs. 1 crore in respect of certain withdrawals is **increased to Rs.