TDS Rate Chart FY 2026-27: Complete Guide to Latest TDS Rates and Threshold Limits
The Income Tax Department has introduced updated Tax Deducted at Source (TDS) provisions for Financial Year 2026-27 (Assessment Year 2027-28). The revised TDS rate chart reflects the new section numbers under the Income-tax Act, 2025, while specifying applicable TDS rates and threshold limits for commonly used transactions.
Whether you are a salaried employee, pensioner, business owner, contractor, landlord, or investor, understanding these TDS provisions is essential for proper tax compliance and financial planning.
This guide explains the latest TDS Rate Chart FY 2026-27 in simple language.
What is TDS?
Tax Deducted at Source (TDS) is a mechanism through which tax is deducted by the payer before making certain payments to the recipient.
The deducted tax is deposited with the Government and adjusted against the recipient’s final income tax liability.
Common examples include:
- Salary
- Bank Interest
- Rent
- Professional Fees
- Contractor Payments
- Dividends
- Commission
- Purchase of Property
TDS Rate Chart FY 2026-27
| Payment | New Section | TDS Rate | Threshold Limit |
| Salary (Government Employees) | 392 | As per Income Tax Slab | As applicable |
| Salary (Other Employees) | 392 | As per Income Tax Slab | As applicable |
| Insurance Commission | 393(1) | 2% / 10% | ₹20,000 |
| Commission / Brokerage | 393(1) | 2% | ₹20,000 |
| Rent – Plant & Machinery | 393(1) | 2% | Rent exceeds ₹50,000 per month |
| Rent – Land & Building | 393(1) | 10% | Rent exceeds ₹50,000 per month |
| Interest on Securities | 393(1) | 10% | As applicable |
| Bank Interest – Senior Citizens | 393(1) | 10% | ₹1,00,000 |
| Bank Interest – Others | 393(1) | 10% | ₹50,000 |
| Contractor (Individual/HUF) | 393(1) | 1% | ₹30,000 per bill or ₹1,00,000 annually |
| Contractor (Others) | 393(1) | 2% | ₹30,000 per bill or ₹1,00,000 annually |
| Technical Fees / Royalty | 393(1) | 2% | ₹50,000 |
| Professional Fees | 393(1) | 10% | ₹50,000 |
| Director’s Remuneration | 393(1) | 10% | ₹50,000 |
| Dividend | 393(1) | 10% | ₹10,000 |
| E-Commerce Transactions | 393(1) | 0.10% | ₹5,00,000 |
| Purchase of Goods | 393(1) | 0.10% | ₹50,00,000 |
| Benefit / Perquisite | 393(1) | 10% | ₹20,000 |
| Partner Remuneration / Interest | 393(3) | 10% | ₹20,000 |
| Purchase of Immovable Property | 393(1) | 1% | ₹50,00,000 |
| Rent by Individual/HUF (No Tax Audit) | 393(1) | 2% | ₹50,000 per month |
| Payment by Individual/HUF to Contractor or Professional | 393(1) | 2% | ₹50,00,000 |
| Cash Withdrawal | 393(3) | As Applicable | ₹20 lakh / ₹1 crore (as applicable) |
Major Highlights of the New TDS Chart
1. New Income Tax Sections Introduced
The TDS provisions now refer to new section numbers under the Income-tax Act, 2025.
For example:
- Old Section 192 → New Section 392
- Old Section 194A → New Section 393(1)
- Old Section 194C → New Section 393(1)
- Old Section 194J → New Section 393(1)
Although section numbers have changed, taxpayers should verify whether the applicable rates or conditions have been modified through official notifications.
2. Salary TDS
TDS on salary continues to be deducted according to the employee’s applicable Income Tax Slab.
This applies to:
- Government employees
- Private sector employees
3. Higher Threshold for Senior Citizens
Senior citizens receive a higher exemption limit for bank interest.
| Category | Threshold |
| Senior Citizens | ₹1,00,000 |
| Others | ₹50,000 |
This provides significant relief to pensioners and retired individuals earning interest income.
4. Rent Payments
TDS applies where monthly rent exceeds ₹50,000.
Applicable rates:
- Plant & Machinery – 2%
- Land & Building – 10%
5. Contractor Payments
Contractor payments continue to attract:
- 1% for Individual/HUF contractors
- 2% for others
Threshold:
- ₹30,000 per bill
- ₹1,00,000 aggregate during the financial year
6. Professional and Technical Services
Professional services such as:
- Chartered Accountants
- Lawyers
- Consultants
- Architects
- Doctors
generally attract 10% TDS, while certain technical fees and royalties may attract 2%, subject to applicable provisions.
7. Dividend Income
Companies are required to deduct 10% TDS when dividend payments exceed ₹10,000.
8. Purchase of Property
Purchase of immovable property valued above ₹50 lakh continues to attract 1% TDS.
9. Cash Withdrawal
TDS on cash withdrawals continues according to prescribed limits.
Applicable thresholds include:
- ₹20 lakh
- ₹1 crore
depending on the taxpayer category and filing status.
Why This TDS Chart is Important
The updated chart helps:
- Salaried employees
- Pensioners
- Senior citizens
- Businesses
- Contractors
- Professionals
- Banks
- Companies
- Deductors
- Chartered Accountants
- Tax consultants
to ensure timely compliance with TDS provisions and avoid penalties.
Important Points to Remember
- Check whether your payment exceeds the prescribed threshold.
- Verify the applicable TDS rate before making payment.
- Ensure that TDS is deposited within the prescribed time.
- Issue TDS certificates (Form 16/Form 16A, as applicable).
- Reconcile deductions through your Annual Information Statement (AIS) and Form 26AS.
Frequently Asked Questions (FAQs)
Is TDS deducted from salary?
Yes. Salary TDS is deducted according to the applicable income tax slab.
What is the TDS limit on bank interest for senior citizens?
The threshold limit is ₹1,00,000 during FY 2026-27.
What is the TDS rate on professional fees?
Professional fees generally attract 10% TDS, subject to the applicable provisions.
Is TDS applicable on property purchase?
Yes. A 1% TDS applies on the purchase of immovable property valued above ₹50 lakh.
Has the Income-tax Act changed the TDS section numbers?
Yes. Under the Income-tax Act, 2025, several TDS provisions have been renumbered (for example, Section 192 has become Section 392, and many former Section 194-series provisions are now covered under Section 393).
Conclusion
The TDS Rate Chart for FY 2026-27 provides a clear reference for the latest TDS rates, revised section numbers, and threshold limits applicable to common financial transactions. Taxpayers, employers, businesses, and financial institutions should familiarize themselves with these changes to ensure accurate tax deduction and compliance.
Disclaimer: The above information is based on the TDS Rate Chart shared for FY 2026-27. Taxpayers should refer to the latest provisions of the Income-tax Act, 2025, relevant CBDT notifications, or consult a qualified tax professional for transaction-specific advice.