If you are looking for the latest TDS rate chart for Tax Year (FY) 2026-27, this detailed guide brings together the latest section-wise rates, threshold limits, important TDS forms, and practical compliance points in one place. For official reference, the Income Tax Department currently publishes these rates for Tax Year (FY) 2026-27, and taxpayers should always cross-check the legal position from the government portal before filing or deducting tax.
If you handle salary payments, contractor bills, professional fees, rent, commission, property transactions, purchase of goods, e-commerce settlements, partner payments, business perquisites or VDA transfers, this page is designed to be a practical reference. I have also added transition notes so readers do not get confused between old names and new-rule terminology.
Also Read-New Income Tax Rules 2026: Old vs. New Form Names and Numbers – Comparison Table
Important Note on Terminology for FY 2026-27
The official Income Tax Department pages still use the term Assessment Year 2026-27 on the TDS rates and threshold limit documents. So, for legal and compliance accuracy, it is safer to mention the official term at least once in your article, even if you use “FY 2026-27” or “Tax Year 2026-27” for easier reading in the rest of the content.
Official proof: Income Tax Department – TDS Rates
What Is New in TDS for FY 2026-27?
As per the official Income Tax Department TDS rates page updated after the Finance Act, 2025, the section-wise TDS rate structure for many common payments continues broadly on familiar lines, but taxpayers must pay attention to updated provisions such as Section 194T for payments to partners and the continuing applicability of modern provisions like Sections 194O, 194Q, 194R and 194S.
- Section 194T applies to payment of salary, remuneration, commission, bonus or interest to a partner of a firm, effective from 01-04-2025.
- No deduction under Section 194T if the aggregate amount does not exceed Rs. 20,000 during the financial year.
- Section 194O continues for e-commerce operator payments to e-commerce participants at 0.1%.
- Section 194Q continues for purchase of goods above the prescribed threshold.
- Section 194R applies to business or profession benefits or perquisites when the aggregate value exceeds Rs. 20,000.
- Section 194S continues for transfer of Virtual Digital Assets, subject to threshold conditions.
Source: Income Tax Department – TDS Rates
Old terms vs new terms
| Old Terms | New Terms as per New Rule | Remark |
|---|---|---|
| FY 2026-27 | Tax Year 2026-27 | Changes as per New Income Tax Rule |
| AY 2027-28 | Tax Year 2026-27 for income earned from 1 April 2026 onward | This reduces confusion during the transition to the new framework. |
| Form 16 | Form 130 | The salary TDS certificate has been renumbered under the new rules. |
| Form 16A | Form 131 | The non-salary TDS certificate has been renumbered under the new rules. |
| 24Q | Form 138 | The quarterly salary TDS statement now uses a new form number. |
| 26Q | Form 140 | The quarterly non-salary TDS statement now uses a new form number. |
Latest TDS rate chart for FY 2026-27
| Section (familiar label) | Nature of payment | TDS rate | Remarks |
|---|---|---|---|
| 192 | Salary | Normal slab rate | Employer deducts tax on estimated salary income at the applicable average rate. |
| 192A | Taxable withdrawal from accumulated provident fund balance | 10% | Applies where the accumulated PF balance becomes taxable in the employee’s hands. |
| 193 | Interest on securities | 10% | General rate shown in the department rate chart for covered resident cases. |
| 194 | Dividend | 10% | Common resident dividend deduction rate. |
| 194A | Interest other than interest on securities | 10% | Threshold and exemption conditions vary by category, so the specific provision should still be checked before deduction. |
| 194B | Winnings from lotteries, crossword puzzles, games, gambling or betting | 30% | High-rate TDS category. |
| 194BA | Winnings from online games | 30% | Separate section for online game winnings. |
| 194BB | Winnings from horse races | 30% | Specified winnings category. |
| 194C | Payment to contractor or sub-contractor | 1% for individual/HUF payee; 2% for other payees | One of the most used TDS sections in day-to-day business payments. |
| 194D | Insurance commission | 5% / 10% | The department rate chart distinguishes between non-company and domestic company categories. |
| 194DA | Payment in respect of life insurance policy | 2% | Applies on the income component as per the provision. |
| 194EE | Payment in respect of deposit under National Savings Scheme | 10% | Specified savings-related payout. |
| 194G | Commission on sale of lottery tickets | 2% | Applies to specified lottery ticket commission. |
| 194H | Commission or brokerage | 2% | A widely used section for commission payments. |
| 194I | Rent | 2% for plant and machinery; 10% for land, building, furniture or fittings | Use the correct asset category before deduction. |
| 194IA | Transfer of immovable property other than agricultural land | 1% | Applies to eligible property purchase transactions from a resident seller. |
| 194IB | Rent paid by individual or HUF not liable to tax audit | 2% | Applies to specified rent cases covered under this section. |
| 194IC | Monetary consideration under joint development agreement | 10% | Relevant in JDA transactions. |
| 194J | Professional fees, technical fees and royalty | 2% for fees for technical services, call centre cases and specified film royalty cases; 10% in other covered cases | Always identify the payment type properly before applying the rate. |
| 194K | Income in respect of units payable to resident | 10% | Applies to covered unit income payments. |
| 194LA | Compensation on acquisition of certain immovable property | 10% | Specified acquisition compensation category. |
| 194M | Specified payments by individual/HUF not otherwise liable under 194C, 194H or 194J | 2% | Deduction applies where aggregate payment exceeds Rs. 50 lakh during the financial year. |
| 194N | Cash withdrawal | 2%; or 2% / 5% for specified non-filers | General trigger is withdrawal above Rs. 1 crore. For specified non-filers, 2% applies above Rs. 20 lakh and 5% applies above Rs. 1 crore. For co-operative societies, the threshold noted by the department is Rs. 3 crore. |
| 194O | E-commerce operator payment or credit to e-commerce participant | 0.1% | Applies to eligible e-commerce transactions. |
| 194P | Specified senior citizen case handled by specified bank | Tax on total income as per rate in force | This is not a flat percentage section. |
| 194Q | Purchase of goods | 0.1% | Deduct on the amount exceeding Rs. 50 lakh. |
| 194R | Benefit or perquisite arising from business or profession | 10% | Applies where aggregate value of benefit or perquisite exceeds Rs. 20,000. |
| 194S | Transfer of virtual digital asset | 1% | No deduction where consideration does not exceed Rs. 10,000 in general cases or Rs. 50,000 for specified persons.(“Note that under the 2025 Act, VDA losses cannot be carried forward to future years—a strict continuation from the previous regime.”) |
| 194T | Salary, remuneration, commission, bonus or interest paid to partner of firm | 10% | Effective from 1 April 2025. No deduction where aggregate amount does not exceed Rs. 20,000 during the financial year. |
Important note: the official department rate page also contains several special rates for non-residents, foreign companies, investment income, business trusts, securitisation trusts, IFSC-linked cases and capital gains categories. If the payment is cross-border, treaty-driven or structured differently, always verify the exact provision before deduction.
Official source: Income Tax Department – TDS Rates
Payroll updates:
Marginal relief note: Under the current 2026 tax framework, relief is available around the rebate threshold so that a small increase in income above the rebate limit does not create a disproportionate tax jump. This is useful to mention in salary explainers because many employees wrongly assume that crossing the rebate line automatically creates a sharp tax cliff.
HRA update: In the 2026 framework, the higher 50% HRA exemption limit for metro cities is no longer limited to Delhi, Mumbai, Kolkata and Chennai. Reported 2026 changes expand this higher-limit list to Bengaluru, Hyderabad, Pune and Ahmedabad as well.
Important non-resident and special-rate references
| Section | Payment type | Rate | Quick note |
|---|---|---|---|
| 194LB | Interest on infrastructure debt fund to non-resident | 5% | Special non-resident category. |
| 194LC | Specified foreign currency borrowing or long-term bond interest | 5% / 4% / 9% | The rate depends on the qualifying instrument and IFSC-related conditions noted in the department material. |
| 194LD | Interest on rupee denominated bond or government securities to FII/QFI | 5% | Special investment-category rate. |
| 195 | Specified payments to non-resident | 10%, 12.5%, 20%, 30% or 35% depending on income type and recipient category | Several non-resident payments, capital gains items and special categories fall here, so the exact nature of income must be checked before deduction. |
| 196A / 196B / 196C / 196D | Units, bonds, GDR and FII-related income | 10%, 12.5% or 20% depending on the provision | Use the exact sub-clause before deduction, especially in investment-related payments. |
Important for NRI property deals: If the seller is a non-resident, the transaction is generally not handled like a normal section 194IA case. Reported 2026 procedural changes indicate a relaxation for certain resident buyers, allowing tax deposit through a PAN-based challan instead of taking a separate TAN for that transaction, while the TDS obligation itself continues under the non-resident payment framework.
New TDS forms under Income-tax Rules, 2026
| Old form number | New form number | Use |
|---|---|---|
| 15G / 15H | Form 121 | Declaration for receipt of certain incomes without deduction of tax. |
| 12B / 12BAA | Form 122 | Details of income for salary deduction purposes. |
| 12BA | Form 123 | Statement of perquisites, fringe benefits or profits in lieu of salary. |
| 12BB | Form 124 | Employee declaration for deduction claims. |
| 12BBA | Form 125 | Declaration by specified senior citizen for deduction under the relevant provision. |
| 15C / 15D | Form 126 | Application for certificate for receipt of certain sums without deduction of tax. |
| 13 | Form 128 | Application for lower or nil TDS certificate, and lower TCS certificate. |
| 15E | Form 129 | Application for determination of appropriate proportion of sum payable to non-resident that is chargeable to tax. |
| 16 | Form 130 | TDS certificate for salary; also used for pension or interest income of specified senior citizen as covered in the new rules. |
| 16A | Form 131 | TDS certificate for payments other than salary. |
| 16B / 16C / 16D / 16E | Form 132 | Certificate under the new rule framework for specified TDS cases. |
| 27D | Form 133 | TCS certificate. |
| 24Q | Form 138 | Quarterly TDS statement for salary and specified senior citizen income cases. |
| 26Q | Form 140 | Quarterly TDS statement for payments other than salary. |
| 26QB / 26QC / 26QD / 26QE | Form 141 | Challan-cum-statement for specified TDS transactions. |
| 26QF | Form 142 | Quarterly statement for tax deposited in relation to VDA transfer by an exchange. |
| 27EQ | Form 143 | Quarterly TCS statement. |
| 27Q | Form 144 | Quarterly TDS statement for non-salary payments to non-residents. |
| 15CA | Form 145 | Information for payments to non-resident not being a company, or to a foreign company. |
| 15CB | Form 146 | Accountant certificate for non-resident or foreign company payments. |
| 15CC | Form 147 | Quarterly statement by authorised dealer for remittances. |
| 15CD | Form 148 | Quarterly statement by IFSC unit for remittances. |
| 26AS | Form 168 | Annual Information Statement under the renumbered form system. (Form 168 now includes real-time GST-reconciled turnover data, so ensure your vendor payments (194Q/194C) match your GSTR-2B before filing.) |
| 3CA / 3CB / 3CD | Form 26 | Tax audit report and statement of particulars under the new form structure. |
Salary TDS and Basic Exemption Limits
For salary, TDS under Section 192 is deducted at the normal slab rate. This means employers must estimate the employee’s taxable income and deduct tax according to the applicable slab after considering eligible exemptions, deductions and regime choice.
As per the official threshold page for AY 2026-27, the basic exemption limits are:
- Rs. 2,50,000 for individual, HUF, AOP, BOI and artificial juridical person under the normal framework.
- Rs. 3,00,000 for resident senior citizen.
- Rs. 5,00,000 for resident super senior citizen.
- Rs. 4,00,000 for persons opting for Section 115BAC.
- Standard deduction for salaried taxpayers or pensioners is up to Rs. 50,000 in the normal tax regime and up to Rs. 75,000 in the new tax regime under Section 115BAC.
Official source: Income Tax Department – Threshold Limits under Income-tax Act
Interesting TDS Facts for Readers
- Section 194O changed TDS compliance for online sellers because marketplaces now have a direct deduction role.
- Section 194R became highly relevant after businesses started giving dealers, influencers and professionals gifts, foreign trips, gadgets and incentive benefits.
- Section 194S brought crypto and other Virtual Digital Assets into routine TDS compliance.
- Section 194T is one of the important recent additions because firms now need to track partner-related payments more carefully from a TDS perspective.
- Many taxpayers focus only on the rate, but in real assessments, late deduction, wrong section mapping and non-filing of TDS returns usually create bigger problems than the rate itself.
Important TDS Forms for FY 2026-27
A good TDS article is incomplete without forms. In practice, deduction is only one part of compliance. Deposit, return filing, certificate issuance and declaration handling are equally important.
| Purpose of the Form | New Form (2026 Rules) | Old Form (1962 Rules) | Category / Used By |
| Salary TDS Certificate | Form 130 | Form 16 | Employers to Employees |
| Non-Salary TDS Certificate | Form 131 | Form 16A | Banks/Firms to Deductees |
| Consolidated TDS Certificate | Form 132 | 16B / 16C / 16D | Property/Rent/Prof. Fees |
| TCS Certificate | Form 133 | Form 27D | Tax Collectors to Collectees |
| Salary TDS Return (Quarterly) | Form 138 | Form 24Q | Resident Salary Filings |
| Non-Salary TDS Return (Quarterly) | Form 140 | Form 26Q | Resident Non-Salary Filings |
| Challan-cum-Statement | Form 141 | 26QB / 26QC / 26QD | Consolidated! |
| Quarterly TCS Statement | Form 143 | Form 27EQ | All TCS Collections |
| Non-Resident TDS Return | Form 144 | Form 27Q | Payments to NRIs/Foreign Co. |
| Foreign Remittance Info | Form 145 | Form 15CA | Remitter (Sender) |
| Chartered Accountant Certificate | Form 146 | Form 15CB | CA (Remittance Audit) |
| Unified TDS Declaration | Form 121 | 15G / 15H | Unified! All age groups |
| Annual Information Statement | Form 168 | 26AS / AIS | “Financial Diary” |
| Consolidated Tax Audit Report | Form 26 | 3CA / 3CB / 3CD | Consolidated Audit |
| PAN Application (Indian) | Form 93 / 94 | Form 49A | Indian Citizens/Entities |
| PAN Application (Foreign) | Form 95 / 96 | Form 49AA | Foreign Citizens/Entities |
| TAN Application (Allotment) | Form 134 / 135 | Form 49B | Govt & Other Deductors |
| Investment Declaration (Employee) | Form 124 | Form 12BB | Employee to HR |
| Perquisites Statement | Form 123 | Form 12BA | Details of Fringe Benefits |
| Relief Claim (Arrears) | Form 39 | Form 10E | For Salary u/s 89 |
| DTAA Self-Declaration | Form 41 | Form 10F | NRI Tax Treaty Claims |
For the section-wise TDS framework, refer to: Income Tax Department – TDS Rates
Common Sections Businesses Use Most
For most businesses, freelancers, agencies and MSMEs, the most commonly used TDS sections in everyday accounting are usually Sections 192, 194A, 194C, 194H, 194I, 194J, 194M, 194Q and 194R. If your books are not checked section-wise before payment posting, errors can easily creep in during quarterly return filing.
- 194C is common for contractor and job work payments.
- 194H is common for commission and brokerage.
- 194I is common for office, warehouse and equipment rent.
- 194J is common for professional and technical payments.
- 194Q matters for bigger businesses purchasing goods above the prescribed limit.
- 194R has become important where benefits or incentives are given in kind or partly in cash.
Official Disclaimer You Should Keep in Mind
The Income Tax Department itself states on its official pages that the material is for information purposes and viewers should verify the content from the Government Acts, Rules and Notifications. So while this chart is made for quick understanding, businesses should still verify unusual or high-value transactions from the bare law or a professional adviser.
Final Thought
The latest TDS rate chart for FY 2026-27 is essential for every employer, accountant, tax consultant, business owner and professional dealing with salary, interest, contract payments, rent, commission, technical fees, e-commerce transactions, benefits, goods purchases and digital asset transfers. For practical compliance, the safest approach is to combine the correct section, correct threshold, correct rate, correct form and timely filing.
Official references: Income Tax Department – TDS Rates | Income Tax Department – Threshold Limits under Income-tax Act
Master Resource TY 2026-27
TDS & Tax Migration 2026: FAQs
Answering the most critical compliance questions for the Income-tax Act, 2025.
Q1: What are the new 2026 TDS rates for Contractors (194C) and Commission (194H)?
For contractors, rates remain 1%/2%. However, Section 194H (Commission/Brokerage) has been slashed to **2%** from 5%. This helps improve cash flow for intermediaries.
Q2: How do I declare non-deduction of tax using Form 121?
The old 15G and 15H are gone. Form 121 (Unified Declaration) is the new digital-first standard for all age groups to prevent TDS on bank interest and dividends.
Q3: How is Marginal Relief calculated for the ₹12 Lakh threshold?
If your income is ₹12,05,000, your tax is capped at exactly **₹5,000** (the excess income). This prevents a massive tax jump due to crossing the rebate threshold.
Q4: Which form replaces Form 16 and 16A?
For Tax Year 2026, Salary certificates are **Form 130** and Non-salary certificates are **Form 131**. Software systems must be updated to reflect these renumbered forms.
Q5: What is the significance of Form 168 (Financial Diary)?
It is the successor to 26AS/AIS. It is a live, real-time ledger that matches your TDS, TCS, and GST data automatically, reducing notice risks.
Q6: Is ITR-1 allowed for owners of two house properties?
Yes. The 2026 Rules allow individuals owning up to **two house properties** to use the simplified ITR-1, provided other income criteria are met.
Q7: What is the new Section 194T TDS on Partners?
Firms must now deduct **10% TDS** on salary, interest, or bonus paid to partners if the total amount exceeds ₹20,000 in a year.
Q8: What are the renumbered TDS return forms (24Q/26Q)?
For Tax Year 2026 filings:
• Salary TDS (old 24Q) → **Form 138**
• Non-salary TDS (old 26Q) → **Form 140**
Q9: Why use ‘Tax Year’ instead of ‘Assessment Year’?
The Income-tax Act, 2025 has retired the term ‘AY’. For income earned in FY 2026-27, all filings will legally refer to **Tax Year 2026-27**.
Q10: Can Crypto (VDA) losses be carried forward?
No. Under the current framework, VDA losses are ring-fenced. They **cannot be set off** and strictly cannot be carried forward.
Disclaimer: The information, TDS rates, thresholds and examples given in this article for Tax Year 2026–27 are for general guidance only and are based on publicly available guidance from the Income Tax Department, CBDT notifications and professional TDS‑rate‑chart documents. The Income Tax Act, 2025, may contain additional conditions, exceptions and amendments not fully reflected here. Before acting on any TDS decision, readers are advised to verify the latest official circulars, notifications and forms from the Income Tax Department website and, where necessary, consult a qualified tax professional or chartered accountant.
Source links
- Income Tax Department – TDS Rates
- Income Tax Department – FAQs and Guidance Notes on Forms as per Income-tax Rules, 2026
- Income Tax Department – FAQs on Interplay and Transition
- Income Tax Department – Press Release on Income-tax Act, 2025 coming into force from 1 April 2026
- Income Tax Department – Income-tax Act, 2025
- The Economic Times – Marginal Relief above Rs. 12 lakh
- Policybazaar – Marginal Relief in Income Tax
- The Economic Times – NRI property sale TDS relief for resident buyers
- Hindustan Times – 50% HRA relief extended to more cities
- Angel One – Draft Income-tax Rules 2026 HRA city expansion update
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