TDS Rate Chart FY 2026–27 with New Sections, Threshold Limits & TCS Rates
Overview of TDS & TCS for FY 2026–27
The tds rate chart fy 2026-27 is essential for understanding how tax is deducted or collected at source under the Income Tax Act. TDS (Tax Deducted at Source) is deducted when payments like salary, rent, or professional fees are made, while TCS (Tax Collected at Source) is collected by sellers on specified transactions.
For businesses, professionals, and taxpayers, these tds and tcs rates 2026-27 directly affect cash flow, compliance, and reporting. Incorrect deduction or delayed filing can lead to penalties and interest. (Check TDS on interest rates)
Updated for FY 2026–27 / AY 2027–28: This guide includes the latest TDS and TCS rates, threshold limits, old section references, new Income Tax Act, 2025 section mapping, and a downloadable PDF chart.
Download TDS & TCS Rate Chart FY 2026–27 PDF
Get a printable chart with TDS rates, TCS rates, threshold limits, old sections, new sections, and challan/reporting references. TDS rates for fy 2026-27 pdf download
TDS Rate Chart for FY 2026–27 (AY 2027–28)
TDS Rates for Residents
Below is a simplified tds chart 2026-27 covering key sections:
Key Highlights & Notes
- Section 192: TDS on salary is deducted based on the employee's estimated taxable income and applicable income tax slab rates.
- Section 194C: TDS on contractor payments is deducted at 1% for payments to individuals/HUFs and 2% for payments to other entities, subject to prescribed threshold limits.
- Section 194H: The threshold limit for commission or brokerage has been revised from ₹15,000 to ₹20,000, with a TDS rate of 2%.
- Section 194I: TDS on rent applies to payments for the use of land, buildings, furniture, fittings, plant, or machinery. The section is now shown separately for plant & machinery (2%) and land/building/furniture & fittings (10%).
- Section 194J: TDS on professional fees applies to payments made to professionals such as freelancers, consultants, lawyers, doctors, architects, and other specified professionals. The section is now split into categories attracting 2% TDS for technical services, call centre services, and specified royalty payments, and 10% TDS for other professional services, with a ₹50,000 threshold.
- Section 194D: Insurance commission has been added to the chart, with a threshold limit of ₹20,000 and rates varying based on the payee category.
- Section 194S: The provision for Virtual Digital Assets (VDAs) now clearly distinguishes between specified persons (₹50,000 threshold) and other taxpayers (₹10,000 threshold) while maintaining a 1% TDS rate.
- Section 194T: Payments to partners, including salary, remuneration, commission, bonus, and interest, have been added as a separate category for FY 2026–27 reference.
Practical Example: If a business pays ₹60,000 as professional fees to a consultant covered under Section 194J and the applicable TDS rate is 10%, it must deduct ₹6,000 as TDS and pay ₹54,000 to the consultant.
Also check - TDS on cash withdrawal under Section 194N
TDS Rates for Non-Residents
TDS for non-residents under section 195 is generally higher and depends on the nature of income.
Key points:
- Rates vary (10%–30% or more)
- Surcharge and cess may apply
- DTAA (Double Taxation Avoidance Agreement) can reduce rates
Example: If an Indian company pays royalty to a foreign entity, TDS is deducted as per applicable DTAA rate, which may be lower than standard rates.
Example: TDS on Rent FY 2026–27
If a business pays office rent above the applicable threshold, TDS should be deducted under the rent-related TDS provision. Rent for plant and machinery is generally treated differently from rent for land, building, furniture, or fittings.
Example: TDS on Professional Fees FY 2026–27
If a business pays ₹80,000 to a consultant, check whether the payment falls under technical fees or professional services, then apply the correct 194J category and rate.
TCS Rate Chart for FY 2026–27
Key TCS Sections and Rates
The tcs rate chart fy 2026-27 includes the following major provisions:
Key Areas Explained
- section 206c tcs rates apply to sellers of specific goods
- tcs on foreign remittance lrs 2026 depends on purpose and amount
- Overseas travel packages attract TCS even for individuals
Practical example: If a person sends ₹10 lakh abroad under LRS, TCS applies on ₹3 lakh (amount exceeding ₹7 lakh).
Example: TCS on Scrap Sale FY 2026–27
A seller dealing in scrap should check the applicable TCS provision and collect tax at the applicable rate when the transaction falls under the specified TCS category.
Key Changes in TDS & TCS for FY 2026–27
The income tax tds rates 2026-27 reflect ongoing refinements rather than drastic shifts.
Important updates:
- Continued applicability of section 194Q purchase of goods tds
- Strengthened compliance for section 194o ecommerce tds
- Focus on digital tracking of transactions
- Higher scrutiny on tds on virtual digital assets 194s
Compliance Updates:
- Mandatory PAN linking to avoid higher TDS
- Automated reconciliation with AIS/Form 26AS
- Increased notices for mismatches
These updates aim to improve tax transparency and reporting accuracy.
Checkout - GST Rules From 1 January 2026
TDS Rate Chart FY 2026–27 with New Sections Under Income Tax Act, 2025
From FY 2026–27, TDS provisions are mapped under the Income Tax Act, 2025. While the commonly used old sections such as 194C, 194H, 194I, 194J, 194Q, 194S and 194T are still useful for reference, deductors should also check the tds rate chart fy 26-27 with new section /table reference while reporting TDS.
Old TDS Sections vs New TDS Sections for FY 2026–27
The official Income Tax Department guidance says transactions entered into on or after 1 April 2026 should quote the relevant table item of Section 393 for TDS or Section 394 for TCS, not old section numbers like 194C, 194J, or 194H.
Impact of TDS & TCS on Businesses & Taxpayers
Cash Flow Impact
- TDS reduces immediate cash availability
- TCS increases upfront cost for buyers
- Refund dependency increases
Compliance Burden
Businesses must:
- Track multiple sections
- Apply correct thresholds
- File returns regularly
Risk of Penalties
Non-compliance can result in:
- Interest (1%–1.5% per month)
- Late filing fees
- Disallowance of expenses
Real-Life Example
A small agency paying freelancers:
- Must deduct TDS under 194J
- Deposit within due date
- File quarterly returns
Failure at any step leads to penalties.
Explore - TDS vs TCS and Lasted GST Rates in India for 2026
TDS & TCS Compliance Checklist FY 2026–27
Follow this structured tds and tcs compliance guide for businesses:
- Deduct tax at correct rate
- Verify PAN of payee
- Deposit TDS/TCS within due dates
- File quarterly returns (24Q, 26Q, etc.)
- Issue TDS certificates (Form 16/16A)
- Reconcile with Form 26AS
- Maintain proper documentation
Step-by-step approach:
- Identify applicable section
- Check threshold limit
- Deduct correct amount
- Deposit tax
- File return
Common Mistakes to Avoid
Avoid these frequent errors in tds deduction rules 2026-27:
- Applying wrong TDS rate
- Ignoring threshold limits
- Late deduction or payment
- Not collecting PAN (higher TDS applies)
- Misclassifying transactions
These mistakes often trigger tax notices.
Read - How to deduct TDS on GST bill
Simplify TDS & TCS Compliance with GimBooks
Handling tds rates for residents fy 2026-27 and multiple compliance rules manually can be time-consuming. GimBooks offers a practical solution for small businesses and professionals.
With GimBooks, you can:
- Manage GST + TDS billing in one GST billing software platform
- Track expenses and transactions automatically
- Generate financial reports for better decisions
- Stay updated with compliance requirements
- Generate e-invoices with e-invoice software
The platform reduces manual work and helps maintain accurate records aligned with latest tds and tcs rates in india 2026.
Start managing your taxes effortlessly with GimBooks and reduce compliance risks in daily operations.
Latest - GST New Rules from 1 April 2026: Guide for Indian Small Businesses
Conclusion
The tds rate chart ay 2027-28 provides a structured view of tax deductions and collections applicable for FY 2026–27. While the rates remain largely stable, compliance expectations are increasing.
Key takeaways:
- Understand applicable sections and thresholds
- Deduct and deposit taxes on time
- Maintain accurate records
- Reconcile regularly with tax statements
For businesses and taxpayers, staying informed about tds and tcs rates 2026-27 is essential for avoiding penalties and managing finances efficiently.
A disciplined compliance approach ensures smooth operations and better financial planning in the long term.
Also check -
TDS return due dates FY 2026-27
TDS rates for MSMEs and TDS on GST rules
FAQs on TDS & TCS Rate Chart FY 2026–27
1. What is the TDS rate chart for FY 2026–27?
The TDS rate chart for FY 2026–27 is a section-wise summary of tax deduction rates, threshold limits, nature of payments, old TDS sections, and new Income Tax Act, 2025 references applicable for AY 2027–28. It helps businesses, deductors, accountants, and MSMEs check when TDS is applicable and at what rate.
2. Where can I download the TDS rate chart FY 2026–27 PDF?
You can download the TDS rate chart FY 2026–27 PDF from this page using the “Download TDS & TCS Rate Chart FY 2026–27 PDF” button. The printable PDF includes TDS rates, TCS rates, threshold limits, old sections, new section references, and challan/reporting notes.
3. What are the new TDS sections from 1 April 2026?
From 1 April 2026, TDS provisions are mapped under the Income Tax Act, 2025. Salary TDS is mainly covered under Section 392, while most non-salary TDS provisions such as contractor payments, commission, rent, professional fees, purchase of goods, VDA payments, and partner payments are consolidated under Section 393 in a simplified table format.
4. Which TDS section should be used in challans after 1 April 2026?
For transactions where the payment or credit happens on or after 1 April 2026, deductors should use the relevant new Income Tax Act, 2025 section or table reference while reporting TDS. Old sections such as 194C, 194H, 194I, and 194J may still be useful for reference, but the new section/table reference should be checked while filing or reporting.
5. What is the TDS on rent limit for FY 2026–27?
For FY 2026–27, TDS on rent generally applies when rent exceeds ₹50,000 per month. The TDS rate is 2% for rent paid for plant, machinery, or equipment and 10% for rent paid for land, building, furniture, or fittings, subject to applicable conditions.
6. What is the TDS on professional fees limit for FY 2026–27?
For FY 2026–27, the threshold limit for TDS on professional fees is ₹50,000. TDS is generally deducted at 10% for professional services and other specified services. For technical services, call centre services, and certain specified royalty payments, the applicable TDS rate is generally 2%.
7. What is the TDS rate on commission or brokerage for FY 2026–27?
For FY 2026–27, TDS on commission or brokerage under the old Section 194H reference applies when the payment exceeds ₹20,000. The applicable TDS rate is 2%, subject to the recipient’s PAN and other applicable provisions.
8. What is the TCS rate on scrap sale for FY 2026–27?
For FY 2026–27, the TCS rate on sale of scrap is generally 2%. Under the Income Tax Act, 2025 framework, TCS provisions are mapped under Section 394, while old Section 206C references may still be used for understanding the nature of transaction.
9. What is the TCS rate on foreign remittance under LRS for FY 2026–27?
For FY 2026–27, foreign remittance under LRS for education or medical treatment generally attracts 2% TCS on the amount exceeding ₹10 lakh. For LRS remittances for other purposes, the TCS rate is generally 20% on the amount exceeding ₹10 lakh. Overseas tour packages are generally covered separately and may attract 2% TCS without a threshold.
10. Are old TDS section numbers like 194C, 194H, and 194J still useful?
Yes, old TDS section numbers such as 194C, 194H, 194I, and 194J are still useful for understanding and comparing TDS provisions. However, for transactions from 1 April 2026 onward, deductors should also check the corresponding new Income Tax Act, 2025 section or table reference before reporting TDS.
11. What happens if the wrong TDS section is quoted after 1 April 2026?
If the wrong TDS section is quoted for a transaction after 1 April 2026, it may lead to processing errors while filing the TDS return. In such cases, the deductor may need to file a correction statement to fix the section or table reference.
12. Are TDS rates and thresholds changed under the Income Tax Act, 2025?
No major change has been made only because of the Income Tax Act, 2025 transition. The Income Tax Department has clarified that TDS rates and monetary thresholds are largely retained, while the provisions are reorganized into a simplified tabular format under the new Act.