TDS Rate Chart 2026-27 — All Sections, Thresholds & Rates Under Income-tax Act, 2025

Quick Answer

For the tax year 2026-27 (1 April 2026 to 31 March 2027), TDS is governed by the Income-tax Act, 2025 (30 of 2025) — the first tax year under the new Act. Key headline rates are: salary at slab rates (Sec 192), interest on securities 10%, dividend 10%, non-bank interest 2% (rationalised), contractor 1%/2%, rent 2%/10%, commission 2% (rationalised), professional fees 10%, technical fees 2%, purchase of goods 0.1%, VDA 1%, payments to partners 10% (new Sec 194T), and non-filers/non-PAN at higher of twice the normal rate or 5%.

Last Updated: 15 April 2026 | Applicable From: Tax Year 2026-27 (1 April 2026 onwards) | Reference: Income-tax Act, 2025 (30 of 2025), as amended by Finance Act, 2026

This guide is the single reference for every deductor — corporate CFOs, SME owners, startup founders, HR payroll teams, CA firms and finance controllers — who must deduct Tax Deducted at Source (TDS) correctly during the tax year 2026-27. The tax year 2026-27 is historic: it is the first full tax year under the Income-tax Act, 2025, which received Presidential assent on 21 August 2025 and commenced on 1 April 2026 as a single unconditional commencement (there are no chapter-wise appointed dates). While the 2025 Act carries forward the TDS architecture of the repealed Income-tax Act, 1961, several rates have been rationalised downwards — the non-bank interest rate, the commission/brokerage rate, the Sec 194IB low-audit rent rate and the Sec 194J technical fee rate are all lower than before — and a new Sec 194T has been introduced to bring partner payments by firms and LLPs within the TDS net. This article sets out the complete rate chart with thresholds, the higher non-filer mechanism, Form 15G/15H relief, TDS return due dates, Form 16/16A issuance, interest on late deposit, correction statement procedures and TRACES workflow.

Definition — Tax Deducted at Source (TDS): TDS is the mechanism under Chapter XIX of the Income-tax Act, 2025 by which any person responsible for making a specified payment to a resident or non-resident deducts a prescribed percentage of tax at the time of credit or payment (whichever is earlier) and deposits it with the Central Government on the deductee’s behalf. The deductee is then entitled to claim credit for the TDS against their final tax liability while filing the return of income.

Featured Answer — What are the TDS rates for the first tax year under the Income-tax Act, 2025?

For the tax year 2026-27 (1 April 2026 to 31 March 2027), the Income-tax Act, 2025 (30 of 2025) applies for the first time. The Act retains the section-numbering map that every practitioner is familiar with from the 1961 Act but rationalises several rates. Salary is deducted at slab rates under Sec 192. Interest on securities (Sec 193) is 10%. Dividend (Sec 194) is 10% above ₹10,000 annual aggregate. Non-bank interest (Sec 194A) has been rationalised to 2%, while bank interest remains at 10%. Contractor payments (Sec 194C) are 1%/2%. Commission (Sec 194H) is rationalised to 2%. Rent (Sec 194I) is 2%/10%, and the individual-payer rent section (Sec 194IB) is rationalised to 2%. Professional fees (Sec 194J) remain at 10% but technical fees drop to 2%. Purchase of goods (Sec 194Q) is 0.1%; benefits/perquisites (Sec 194R) is 10%; VDA transfers (Sec 194S) is 1%; and the new Sec 194T captures payments by firms/LLPs to partners at 10%. Non-filers and non-PAN deductees pay the higher of twice the prescribed rate or 5%.

Commencement and applicability of the new TDS framework
Complete TDS rate chart for tax year 2026-27
Rationalised rates — what has changed
New Sec 194T — TDS on partner payments
Higher rate for non-filers and non-PAN deductees
Form 15G/15H — nil-deduction declarations
TDS return forms and quarterly due dates
Form 16 and Form 16A — issuance and timelines
Interest on late deduction and late deposit
Correction statements and TRACES workflow
Worked examples
Expert Insight
Key Takeaways
Frequently Asked Questions

1. Commencement and applicability of the new TDS framework

The Income-tax Act, 2025 (30 of 2025) was passed by Parliament and received Presidential assent on 21 August 2025. Section 1(3) of the Act fixes a single, unconditional commencement date: 1 April 2026. There are no chapter-wise appointed dates, no staggered rollout and no notifications required for any chapter to take effect. This is an important point because some commentators had expected a phased commencement similar to the Companies Act, 2013 — that did not happen. Every chapter, including Chapter XIX on Collection and Recovery of Tax (which houses the TDS, TCS and advance tax provisions), comes alive on 1 April 2026.

The practical consequence for deductors is clean: every payment on or after 1 April 2026 that falls within the scope of a TDS section must be processed under the Income-tax Act, 2025 rate chart. Payments made on or before 31 March 2026 continue to be governed by the repealed Income-tax Act, 1961. Where a payment straddles the commencement date — for example, a contractor’s bill raised in March 2026 but paid in April 2026 — the TDS rate applicable is the rate at the time of credit or payment, whichever is earlier. In most accrual-accounted businesses, the credit has already happened before 1 April 2026, so the old Act rate applies; in cash-accounted small businesses, the 2025 Act rate applies. Payroll deductors (Sec 192) transition cleanly: the first salary processed under the 2025 Act is the April 2026 salary.

The 2025 Act also replaces the dual concept of “previous year” and “assessment year” with a single concept of “tax year”. A tax year runs from 1 April to 31 March. The first tax year under the 2025 Act is the tax year 2026-27 (1 April 2026 to 31 March 2027). In old terminology, this corresponds to previous year 2026-27 and assessment year 2027-28, but all statutory references, forms and notices should now use “tax year”.

2. Complete TDS rate chart for tax year 2026-27

The following is the authoritative rate chart for all major TDS sections in the Income-tax Act, 2025 as amended by Finance Act, 2026. The section numbers shown are the equivalents of the familiar 1961 Act numbering — the 2025 Act reorganises TDS into Chapter XIX with a continuous section range in the 380–410 zone, but the numbers 192, 194A, 194C, 194J etc. are still widely used as practitioner shorthand.

Section	Nature of Payment	Threshold (₹)	Rate (Resident)
192	Salary	Basic exemption	Slab rates (average rate)
192A	Premature EPF withdrawal	50,000	10% (20% without PAN)
193	Interest on securities	10,000	10%
194	Dividend (Indian company)	10,000 p.a.	10%
194A	Interest other than securities — Bank	50,000 (1,00,000 senior)	10%
194A	Interest other than securities — Non-bank	10,000	2% (rationalised from 10%)
194B	Winnings from lottery, puzzle, card games	10,000 per payment	30%
194BA	Winnings from online games	Nil (net winnings)	30%
194BB	Winnings from horse races	10,000 per payment	30%
194C	Contractor/sub-contractor — Individual/HUF	30,000 single / 1,00,000 annual	1%
194C	Contractor — Others	30,000 single / 1,00,000 annual	2%
194D	Insurance commission	20,000	2%
194DA	Life insurance maturity (taxable)	1,00,000	2% on income element
194EE	Payment from NSS deposits	2,500	10%
194G	Lottery commission	20,000	2%
194H	Commission / brokerage	20,000	2% (rationalised from 5%)
194I	Rent — plant/machinery/equipment	2,40,000 p.a.	2%
194I	Rent — land, building, furniture	2,40,000 p.a.	10%
194IA	Purchase of immovable property	50,00,000	1%
194IB	Rent paid by individual/HUF (non-audit)	50,000 per month	2% (rationalised from 5%)
194IC	Joint development agreement — cash component	Nil	10%
194J	Fees for technical services / call centres	30,000	2% (rationalised from 10%)
194J	Fees for professional services / royalty / director’s fee	30,000	10%
194K	Income from mutual fund units	10,000	10%
194M	Payments by individual/HUF to contractor/professional	50,00,000	2%
194N	Cash withdrawal from bank account	1 crore (20 lakh for non-filers)	2% / 5%
194O	E-commerce operator to seller	5,00,000 (individual/HUF)	0.1%
194Q	Purchase of goods (buyer turnover > 10 cr)	50,00,000	0.1%
194R	Benefit or perquisite — business/profession	20,000	10%
194S	Transfer of virtual digital asset (VDA)	50,000 / 10,000	1%
194T	Payments by firm/LLP to partner	20,000 p.a.	10% (new)
195	Payment to non-resident (other than salary)	Nil	As per Act or DTAA rate

Surcharge and 4% Health & Education Cess apply on payments to non-residents under Sec 195 and on Sec 192 salary (the average-rate computation already incorporates them). Payments to residents under other sections do not attract surcharge or cess — the rate shown in the table is the final rate to be applied.

3. Rationalised rates — what has changed

Four rate rationalisations carried into the 2025 Act deserve special attention because many in-house payroll teams and ERP master data tables still carry the old rate:

Sec 194A (non-bank interest): down from 10% to 2%. This applies to inter-corporate deposits, NBFC deposits and debenture interest paid by non-banking payers. Banking company interest continues at 10%.
Sec 194H (commission and brokerage): down from 5% to 2%. This affects almost every distribution business — FMCG, pharma, insurance intermediation (separate Sec 194D), travel agents and real estate brokers.
Sec 194IB (rent by individuals not under audit): down from 5% to 2%. This particularly eases the compliance pain on salaried taxpayers living in high-rent cities — the flat 2% is deducted in the last month of the tenancy or in March, whichever is earlier.
Sec 194J (fees for technical services): down from 10% to 2%. Professional services under the same section (legal, accountancy, architecture, engineering, consultancy etc.) remain at 10%. The practical difficulty continues to be the classification — technical versus professional — but the rate differential is now much wider than before.

No threshold reductions have been introduced, and no section has moved in the other direction. The direction of travel is clearly towards lower headline TDS rates with unchanged or higher thresholds — the aim is to reduce refund claims and cash-flow drag for honest taxpayers while leaving the audit trail intact via TRACES and Form 26AS/AIS.

4. New Sec 194T — TDS on partner payments

Sec 194T is the most important new addition to the TDS chapter. Until 31 March 2026, a firm or LLP making any payment to a partner — whether salary, remuneration, commission, bonus or interest on capital — was not obliged to deduct TDS, on the view that a partner is not a third party vis-à-vis the firm. Sec 194T reverses this. From 1 April 2026, every firm and LLP must deduct TDS at 10% on the aggregate of such payments to a partner during the tax year, if the aggregate exceeds ₹20,000.

Three implementation points matter for practice:

Timing: TDS is deducted at the time of credit to the partner’s capital/current account or at the time of payment, whichever is earlier. For most firms that credit monthly remuneration, this means monthly TDS.
TAN: Firms and LLPs that previously relied only on Sec 194C/194J would have already had a TAN. Small professional LLPs that made no other payments requiring TDS must now apply for a TAN via Form 49B before the first qualifying credit to a partner.
Interaction with firm taxation: The partner’s remuneration is already allowable as a deduction in the firm’s income under the Sec 40(b) equivalent (now in Chapter IV of the 2025 Act). Sec 194T does not change that — it only adds a withholding obligation. The partner claims the TDS credit in his individual return.

5. Higher rate for non-filers and non-PAN deductees

The dual-mechanism of the old Sec 206AA (non-PAN) and Sec 206AB (non-filer) is preserved in the 2025 Act through a consolidated provision. The higher rate applies where either condition is met:

No PAN: the deductee has not furnished a valid PAN to the deductor; or
Specified non-filer: the deductee has not filed a return of income for the tax year immediately preceding the tax year in which TDS is to be deducted, and the aggregate TDS/TCS in that preceding year was ₹50,000 or more.

In either case the rate is the higher of (a) twice the rate specified in the relevant section or (b) 5%. For Sec 192 (salary) the non-PAN rate is the maximum marginal rate (effectively 30% + surcharge + cess). The non-filer status is verified on the e-filing portal’s “Compliance Check” utility, which returns a binary flag; deductors are expected to run the check at the start of the tax year and refresh periodically.

6. Form 15G/15H — nil-deduction declarations

Form 15G and 15H remain the only mechanisms by which a resident payee can receive certain incomes — principally bank interest (Sec 194A) and EPF withdrawal (Sec 192A) — without any TDS. Form 15G is for residents below 60 years whose estimated total income for the tax year is below the basic exemption limit; Form 15H is for senior citizens aged 60 and above. Under the Income-tax Act, 2025, the basic exemption limit under the default new regime is ₹4,00,000, and the rebate under the Sec 87A equivalent makes tax nil up to ₹12,00,000 of total income. This significantly expands the population eligible to file Form 15G.

Form 15G/15H are filed with the deductor (not the Department). The deductor uploads the details to TRACES on a quarterly basis using Form 26QAA. Misuse of 15G/15H — i.e. filing a false declaration — attracts prosecution under the Chapter XXII offences provisions, with imprisonment up to seven years in aggravated cases.

7. TDS return forms and quarterly due dates

TDS returns continue to be filed on a quarterly basis using the same four forms:

Form	Who files	Nature
24Q	Every salary deductor	Sec 192 TDS — quarterly salary statement
26Q	Every resident non-salary deductor	All non-Sec 192 TDS on residents
27Q	Every non-resident deductor	Sec 195 TDS on non-residents
27EQ	Every TCS collector	TCS quarterly statement (not a TDS form but filed together)

The quarterly due dates for tax year 2026-27 are:

Q1 (1 April 2026 – 30 June 2026): 31 July 2026
Q2 (1 July 2026 – 30 September 2026): 31 October 2026
Q3 (1 October 2026 – 31 December 2026): 31 January 2027
Q4 (1 January 2027 – 31 March 2027): 31 May 2027

Late filing attracts a fee of ₹200 per day under Sec 234E equivalent, capped at the TDS amount in the statement. Non-filing beyond one year triggers a penalty of ₹10,000 to ₹1,00,000 under the Chapter XXI penalty provisions.

8. Form 16 and Form 16A — issuance and timelines

Form 16 is the annual salary TDS certificate issued by the employer, containing Part A (TRACES-generated summary with challan and TDS details) and Part B (salary break-up, deductions claimed and tax computation). For tax year 2026-27, Form 16 must be issued to employees by 15 June 2027. Form 16A is the quarterly non-salary TDS certificate, issued within 15 days of the quarterly return due date — so for Q1 of the tax year 2026-27, Form 16A must be downloaded from TRACES and issued by 15 August 2026; Q2 by 15 November 2026; Q3 by 15 February 2027; and Q4 by 15 June 2027.

Form 16B (Sec 194IA — immovable property), Form 16C (Sec 194IB — rent by individual) and Form 16D (Sec 194M — payments by individual to contractor) continue in their existing form, generated automatically on TRACES against the Form 26QB/26QC/26QD challan-cum-statement.

9. Interest on late deduction and late deposit

Two distinct interest provisions apply where the TDS obligation is not discharged cleanly:

Failure to deduct at all: interest at 1% per month or part of a month from the date on which TDS was deductible till the date of actual deduction.
Deduction made but late deposit: interest at 1.5% per month or part of a month from the date of deduction till the date of deposit.

Part of a month is treated as a full month — a one-day delay in deposit triggers 1.5% interest for that month. If the delay straddles two calendar months, the interest runs for two months. This is harsher than the ordinary commercial interest calculation and is a common source of notices, especially for month-end salary processing that spills into the 8th of the following month.

10. Correction statements and TRACES workflow

The TRACES portal (Tax Deduction Reconciliation, Accounting & Correction Enabling System) remains the deductor’s interface for: (a) downloading Form 16/16A/16B/16C/16D, (b) filing correction statements against original TDS returns, (c) validating PAN of deductees before filing, (d) receiving Justification Reports for defaults, (e) requesting refunds of excess TDS deposits, and (f) reconciling challans consumed. A correction statement can be filed any time within 6 years from the end of the tax year in which the original statement was filed. Typical corrections include adding a missing deductee, modifying a PAN/rate/amount, or replacing a challan. Each correction requires a TDS RPU (Return Preparation Utility) file and an updated File Validation Utility (FVU) run before upload.

11. Worked examples

Example 1 — Contractor payment with non-filer status: A private limited company raises a purchase order of ₹8,00,000 on 15 April 2026 for civil works to an individual contractor, ABC Constructions, whose PAN is available but who did not file an income tax return for tax year 2025-26 though his TDS was ₹65,000. Sec 194C rate for individual is 1%. Because ABC is a specified non-filer, the applicable rate is the higher of (a) 2 × 1% = 2% or (b) 5% → 5%. TDS to be deducted at credit = ₹8,00,000 × 5% = ₹40,000. The deductor must verify status through the Compliance Check utility at the time of credit.

Example 2 — Technical vs professional fee classification: An IT company engages a consultant in May 2026 for two separate assignments: (i) software customisation — ₹2,00,000, and (ii) tax advisory on ESOPs — ₹1,50,000. The software customisation is “fees for technical services” → 2% → TDS ₹4,000. The tax advisory is “fees for professional services” → 10% → TDS ₹15,000. Total TDS ₹19,000. Under the 1961 Act, both would have attracted 10% — so the technical portion saves ₹16,000 in cash-flow drag.

Example 3 — New Sec 194T partner TDS: A two-partner LLP with monthly partner remuneration of ₹2,00,000 to each partner. First credit on 30 April 2026. Aggregate exceeds ₹20,000 from the first month. TDS at 10% = ₹20,000 per partner per month, depositable by 7 May 2026. Annual TDS per partner = ₹2,40,000. The partners claim the credit in their individual returns filed by 31 July 2027 (non-audit cases) or 31 October 2027 (audit cases).

Example 4 — Late deposit interest: A company deducts ₹3,00,000 TDS on salary of April 2026 on 30 April 2026 but deposits it on 10 May 2026 (due date 7 May 2026). Three calendar days late, but straddling the month-end of April (date of deduction) to May (date of deposit) → two months of interest. Interest = ₹3,00,000 × 1.5% × 2 = ₹9,000.

Expert Insight

CA V. Viswanathan: Having led TDS compliance for dozens of mid-market companies through the 2012–2024 rate changes, I can say the 2025 Act rationalisation is the cleanest I have seen in a decade. The single-digit rates on commission, non-bank interest, individual rent and technical fees remove the lobbying pressure that had built up around sections where small service providers were effectively pre-paying tax through TDS and then waiting for refunds. The real trap in the first tax year is not the rate change — it is the ERP master data. I have already seen three instances where a company’s SAP or Tally TDS master still carries the old 5% rate for Sec 194H, resulting in over-deduction, an irate distributor, a correction statement, and a delayed refund. My advice to finance teams is: print out the rate chart above, walk to the IT/ERP team on 1 April 2026, sit with them till the master data is updated, and test two live vendor payments before the evening. The second trap is Sec 194T — many LLPs and professional firms did not historically think of partner payments as TDS events. They must now apply for a TAN if they do not already have one, set up a new GL mapping for “TDS on partner remuneration”, and ensure the partners understand their remuneration will arrive net of tax. Finally, run the non-filer Compliance Check at the start of every quarter — the ₹50,000 non-filer threshold is easy to breach for vendors who deal with multiple GST-registered buyers, and the higher rate kicks in automatically whether or not you choose to apply it.

Key Takeaways

The Income-tax Act, 2025 received Presidential assent on 21 August 2025 and commences on 1 April 2026 as a single unconditional commencement — no chapter-wise appointed dates.
Tax year 2026-27 (1 April 2026 – 31 March 2027) is the first tax year under the new Act. The term “tax year” replaces the old PY/AY distinction.
Rates rationalised: Sec 194A non-bank → 2%; Sec 194H → 2%; Sec 194IB → 2%; Sec 194J technical → 2%. Sec 194J professional stays at 10%.
New Sec 194T: firms/LLPs must deduct 10% TDS on aggregate partner payments over ₹20,000.
Non-filer and non-PAN rate: higher of twice the prescribed rate or 5%.
Quarterly return due dates: Q1 — 31 July; Q2 — 31 October; Q3 — 31 January; Q4 — 31 May. Forms: 24Q (salary), 26Q (resident non-salary), 27Q (non-resident), 27EQ (TCS).
Form 16 due by 15 June 2027; Form 16A within 15 days of each quarterly due date.
Interest: 1% per month for failure to deduct, 1.5% per month for late deposit, part-month counted as full month.
TRACES is the single operational portal for returns, corrections, certificates, Justification Reports and refunds.
Update ERP master data and run non-filer Compliance Check at the start of the tax year and each quarter.

Frequently Asked Questions

From when do the new TDS rates under the Income-tax Act, 2025 apply?

The Income-tax Act, 2025 (30 of 2025) received Presidential assent on 21 August 2025 and commences on 1 April 2026 as a single unconditional commencement date. The TDS rate chart in this article therefore applies to all payments made on or after 1 April 2026, i.e. the tax year 2026-27 (1 April 2026 to 31 March 2027). Payments made before 1 April 2026 continue to be governed by the TDS rates under the repealed Income-tax Act, 1961.

What is the TDS rate on interest other than interest on securities for tax year 2026-27?

Under the Income-tax Act, 2025, the TDS rate on interest other than securities (the Sec 194A equivalent) has been rationalised. Banking company interest continues at 10%. Non-bank interest (company deposits, inter-corporate deposits, NBFC deposits) is rationalised from 10% down to 2%. The threshold for banks is ₹50,000 per year (₹1,00,000 for senior citizens) and ₹10,000 for non-bank payers. Form 15G/15H can be filed by eligible resident payees to receive interest without TDS.

What is the higher TDS rate for non-filers under the 2025 Act?

The higher-rate mechanism of the old Sec 206AA and Sec 206AB has been carried into the Income-tax Act, 2025. Where the deductee has not furnished a PAN, or has not filed returns for the preceding tax year despite having aggregate TDS/TCS of ₹50,000 or more, the deductor must apply TDS at the higher of (a) twice the rate specified in the relevant section or (b) 5%. For Sec 192 salary cases, the non-PAN rate is the maximum marginal rate.

What is Section 194T and whom does it affect?

Section 194T is a new TDS section introduced under the Income-tax Act, 2025 (carrying forward the Finance Act, 2024 amendment). A firm or LLP making any payment to a partner by way of salary, remuneration, commission, bonus or interest must deduct TDS at 10% if the aggregate of such payments to the partner in the tax year exceeds ₹20,000. Before this section, no TDS was required on payments by firms to their partners.

What are the TDS return due dates for tax year 2026-27?

TDS returns are filed quarterly. For tax year 2026-27, the due dates are: Q1 (Apr-Jun 2026) — 31 July 2026; Q2 (Jul-Sep 2026) — 31 October 2026; Q3 (Oct-Dec 2026) — 31 January 2027; Q4 (Jan-Mar 2027) — 31 May 2027. Salary deductors file Form 24Q; non-salary resident deductors file Form 26Q; non-resident deductors file Form 27Q; and TCS collectors file Form 27EQ.

When must Form 16 and Form 16A be issued for tax year 2026-27?

Form 16 (annual salary TDS certificate) must be issued to employees by 15 June 2027 for the tax year ending 31 March 2027. Form 16A (non-salary TDS certificate) must be issued within 15 days of the due date of filing the relevant quarterly return — so Q1 certificates by 15 August 2026, Q2 by 15 November 2026, Q3 by 15 February 2027, and Q4 by 15 June 2027. Both certificates are downloaded from the TRACES portal.

What is the interest on late deposit of TDS?

Where TDS is deducted but deposited late, interest is payable at 1.5% per month or part of a month from the date of deduction till the date of deposit. Where TDS ought to have been deducted but was not deducted at all, interest is payable at 1% per month or part of a month from the date on which TDS was deductible till the date on which it is actually deducted. Part of a month is treated as a full month.

What is the threshold for TDS under Sec 194Q on purchase of goods?

TDS under Sec 194Q (equivalent) applies to a buyer whose turnover in the immediately preceding tax year exceeded ₹10 crore. Such a buyer must deduct TDS at 0.1% on the value of goods purchased from any resident seller in excess of ₹50 lakh in the tax year. If Sec 194Q applies, the seller does not need to collect TCS under Sec 206C(1H) on the same transaction — the buyer’s TDS obligation prevails.

How is TDS on dividends calculated for tax year 2026-27?

TDS on dividends is deducted by the Indian company paying the dividend at 10% under the Sec 194 equivalent, on the entire dividend amount if the aggregate dividend paid to a resident shareholder in the tax year exceeds ₹10,000. Non-resident shareholders are subject to TDS at 20% plus surcharge and cess under the Sec 195 equivalent, subject to any lower rate available under the applicable DTAA.

What is TDS on rent under the 2025 Act?

Rent TDS under the Sec 194I equivalent applies where aggregate rent in the tax year exceeds ₹2,40,000 per payee. The rate is 2% for rent on plant, machinery or equipment and 10% for rent on land, building or furniture. Individuals and HUFs not subject to audit must use Sec 194IB (equivalent), which applies when monthly rent exceeds ₹50,000 and now carries a rationalised 2% rate (down from 5%).

What is the rate of TDS on professional and technical services?

Under the Sec 194J equivalent, fees for technical services attract TDS at 2% (rationalised from 10%) while fees for professional services continue at 10%. Royalty, non-compete fees and director’s remuneration (other than salary) also attract 10%. The threshold is ₹30,000 per category per payee in the tax year. Call centre operators enjoy a concessional 2% rate.

What are the correct procedural steps if excess TDS has been deducted?

If excess TDS has been deposited, the deductor can claim a refund by filing a correction statement against the original TDS return on TRACES, reducing the deductee’s tax credit, and then applying under Rule 31A or through the CPC-TDS refund channel. The deductee cannot directly claim the refund — the correction must flow through the deductor. If Form 16/16A has already been issued, a revised certificate must be downloaded from TRACES after the correction is accepted.

Who needs to obtain a TAN for tax year 2026-27?

Every person responsible for deducting TDS or collecting TCS must obtain a Tax Deduction and Collection Account Number (TAN) by filing Form 49B. Individuals and HUFs not subject to tax audit are exempt for Sec 194IA, 194IB and 194M deductions — these can be paid using PAN via Form 26QB/26QC/26QD without a TAN. Non-quoting of TAN on challans and returns attracts a penalty of ₹10,000.

What is the TDS rate on virtual digital assets (VDA) for tax year 2026-27?

Under the Sec 194S equivalent, TDS of 1% is deducted on the transfer of any virtual digital asset (cryptocurrency, NFT, notified digital asset) by any buyer from any resident seller, on the consideration paid. The threshold is ₹50,000 per tax year for specified persons (small individuals/HUFs) and ₹10,000 for other deductors. Exchanges and intermediaries are required to deduct and report the TDS through Form 26QE.

What is TDS on benefits or perquisites arising from business or profession?

Under the Sec 194R equivalent, any person providing a benefit or perquisite (whether convertible into money or not) arising from the recipient’s business or profession must deduct TDS at 10% on the fair value of the benefit, if the aggregate value exceeds ₹20,000 in the tax year. Examples include free foreign trips, sample products given to influencers and doctors, and gifts given by companies to distributors.

Where can I find the authoritative TDS rate chart for tax year 2026-27?

The complete TDS rate chart applicable for tax year 2026-27 under the Income-tax Act, 2025 is set out in the main table in Section 2 of this article. It reflects the rates as they stand after the Income-tax Act, 2025 (30 of 2025) as amended by Finance Act, 2026, covering every section from salary (Sec 192) through non-resident payments (Sec 195), including the new Sec 194T for payments to partners.

Need hands-on TDS compliance support? Virtual Auditor’s team runs the full quarterly TDS cycle — challan deposit, Form 24Q/26Q/27Q filing, TRACES corrections, Form 16/16A issuance and non-filer monitoring — for companies, LLPs and individuals across India. Call +91 99622 60333 or email support@virtualauditor.in.