TDS rate chart FY 2026-27: from 1 April 2026, TDS on almost every payment other than salary sits in one section: section 393 of the Income-tax Act, 2025. It replaces the 1961 Act's sections 193 to 194T (194A, 194C, 194H, 194-I, 194J and the rest). TDS on salary moves to section 392. The chart below gives each payment's threshold and rate with the old 1961 section beside it, so you can rebuild your withholding categories in your ERP and tell your team where "194C" went.
I lead ERPNext and Frappe programmes at MithTech, a team of Frappe specialists in Bengaluru. This chart is the map from the old sections to the new ones, with the ERP steps at the end. Your CA has the last word on any row.
What changed on 1 April 2026?
The Income-tax Act, 2025 (Act 30 of 2025) received the President's assent on 21 August 2025 and came into force on 1 April 2026. It replaced the Income-tax Act, 1961. The TDS provisions were rewritten rather than renumbered one by one. Most non-salary payments that used to have a section each now sit in the tables of section 393, and salary has its own section, 392.
Which Act applies to a payment that straddles the change depends on when the amount is credited or paid, whichever is earlier. An invoice for March work credited in March 2026 stays under the 1961 Act. The same invoice credited in April falls under the new one.
For your books this means three practical changes:
- Section labels. Reports, ledgers and vendor master data that say "194C" or "194J" need a new reference.
- Effective dates. Every withholding category or TDS nature of payment needs a row starting 1 April 2026.
- Returns and challans. Quarterly statements moved to new forms, and each payment is reported under a code for its table entry rather than the old section number.
TDS rate chart FY 2026-27: payments to residents (section 393(1) and 393(3))
Rates are for a payee with a valid PAN. "Ind/HUF" means the payee is an individual or HUF. The entry column gives the sub-section and the table serial number in section 393.
26 rows · click a column to sort
| Nature of payment | Threshold | Rate | ||
|---|---|---|---|---|
| Interest on securities | 193 | 393(1) 5(i) | ₹10,000 | 10% |
| Dividend | 194 | 393(1) 7 | ₹10,000 a year (individual, paid other than in cash) | 10% |
| Interest from a bank, co-operative bank or post office | 194A | 393(1) 5(ii) | ₹50,000 a year (₹1,00,000 for senior citizens) | 10% |
| Other interest | 194A | 393(1) 5(iii) | ₹10,000 a year | 10% |
| Payment to a contractor | 194C | 393(1) 6(i) | ₹30,000 a payment or ₹1,00,000 a year | 1% Ind/HUF · 2% others |
| Insurance commission | 194D | 393(1) 1(i) | ₹20,000 a year | 2% (non-company) · 10% (company) |
| Life insurance payout (income part) | 194DA | 393(1) 8(i) | ₹1,00,000 | 2% |
| Commission on lottery tickets | 194G | 393(3) 4 | ₹20,000 a year | 2% |
| Commission or brokerage | 194H | 393(1) 1(ii) | ₹20,000 a year | 2% |
| Rent: plant, machinery or equipment | 194-I | 393(1) 2(ii) | ₹50,000 a month or part of a month | 2% |
| Rent: land, building or furniture | 194-I | 393(1) 2(ii) | ₹50,000 a month or part of a month | 10% |
| Transfer of immovable property (not agricultural land) | 194-IA | 393(1) 3(i) | ₹50 lakh (consideration or stamp duty value) | 1% of the higher of the two |
| Rent paid by individuals or HUFs not under audit | 194-IB | 393(1) 2(i) | ₹50,000 a month or part of a month | 2% |
| Joint development agreement payment | 194-IC | 393(1) 3(ii) | none | 10% |
| Fees for technical services, call centre, film royalty | 194J | 393(1) 6(iii) | ₹50,000 a year | 2% |
| Fees for professional services, other royalty | 194J | 393(1) 6(iii) | ₹50,000 a year | 10% |
| Director's remuneration (not salary) | 194J | 393(1) 6(iii) | none | 10% |
| Income from mutual fund units | 194K | 393(1) 4(i) | ₹10,000 a year | 10% |
| Compensation on compulsory acquisition | 194LA | 393(1) 3(iii) | ₹5,00,000 | 10% |
| Contract or professional payments by individuals or HUFs not under audit | 194M | 393(1) 6(ii) | ₹50 lakh a year | 2% |
| Cash withdrawals from a bank, co-operative bank or post office | 194N | 393(3) 5 | ₹1 crore a year (₹3 crore for a co-operative society) | 2% |
| E-commerce operator paying a participant | 194-O | 393(1) 8(v) | ₹5 lakh a year (Ind/HUF participant with PAN or Aadhaar) | 0.1% |
| Purchase of goods (buyer's turnover over ₹10 crore) | 194Q | 393(1) 8(ii) | ₹50 lakh a year from one seller | 0.1% |
| Benefit or perquisite of a business | 194R | 393(1) 8(iv) | ₹20,000 a year | 10% |
| Transfer of a virtual digital asset | 194S | 393(1) 8(vi) | ₹50,000 a year (₹10,000 for some payers) | 1% |
| Salary, interest, commission or bonus to a partner | 194T | 393(3) 7 | ₹20,000 a year | 10% |
How is TDS on payments to non-residents handled (section 393(2))?
Payments to non-residents, which used to sit mainly in section 195 and a few others, are in section 393(2). The rate depends on the nature of income. Where India has a tax treaty with the payee's country and the payee gives you a tax residency certificate and the prescribed details, the treaty rate can apply if it is lower. Payments abroad are where most TDS disputes start, so get your CA's written view on each new kind of payment before the first one goes out.
What about winnings, cash withdrawals and other payments to any person (section 393(3))?
Section 393(3) covers payments to any person, resident or not: lottery, crossword and card-game winnings, online-game winnings, horse-race winnings, commission on lottery tickets, cash withdrawals from a bank or post office, and a firm's payments to its partners. Winnings from lotteries, crosswords and horse races are taxed at source at 30% above ₹10,000 a transaction. Online-game winnings carry 30% TDS on the net winnings, at withdrawal and at the end of the tax year. Cash withdrawals carry 2% above ₹1 crore a year, or ₹3 crore for a co-operative society.
What if the payee has no PAN or a lower-deduction certificate?
- No PAN: if the payee gives no valid PAN, TDS is at the higher of the table rate and 20% (5% instead of 20% for purchase of goods and e-commerce payments).
- No-PAN rate narrowed from 1 October 2026: the higher rate no longer applies to TDS on property purchases (393(1) 3(i)), rent paid by individuals and HUFs not under audit (2(i)), contract or professional fees paid by individuals and HUFs (6(ii)) and some virtual digital asset payments (8(vi)), under the Finance Act 2026.
- Lower or nil deduction certificate: a payee can apply for a certificate under section 395, and you deduct at the certificate's rate within its limit and dates. Record the certificate number and validity in your ERP.
- Non-filers: the Finance Act 2025 removed the extra rate for payees who hadn't filed returns (old section 206AB).
Which returns, certificates and challans apply under the new Act?
The quarterly TDS statements have new form numbers under the Income-tax Rules, 2026: Form 138 for salary (was 24Q) and Form 140 for other payments to residents (was 26Q). The PAN-based challan-cum-statements for property, rent by individuals and payments under 194M and 194S (26QB to 26QE) became Form 141. Each payment is reported under a code for its table entry (Form 140 calls it the section code), not under the old section. Due dates follow the new rules. If your software still prints "194C" on a challan or statement, it is out of date.
How do you update your ERP for the new sections?
The work is the same in any accounting system:
- Create new categories or natures of payment, effective 1 April 2026, one for each table entry you actually use. Don't overwrite the old ones. Invoices before 1 April still need them.
- Carry the rate and threshold across from the confirmed chart, and name each category by its new entry with the old section in brackets, so your team can still search "194C".
- Map payment codes for challans and statements.
- Test one invoice per category dated after 1 April before the first payment run.
How that looks in each system:
- ERPNext: a new
Tax Withholding Raterow per category from 1 April 2026, and an India Compliance update. If invoices fail with "No Tax Withholding data found", the fix is in ERPNext v16 TDS and the Income-tax Act 2025. - TallyPrime: TDS Nature of Payment masters, updated in the release Tally ships for the new Act.
- Zoho Books: TDS rates and sections under the tax settings, updated by Zoho for Indian organisations.
- SAP Business One: withholding tax codes in the India localisation, usually maintained by your SAP partner.
- Odoo: TDS tax records in the Indian localisation, updated with the localisation module.
For TCS on the sales side, the same date logic applies. See TCS 206C(1H) and the 194Q boundary.
Frequently asked questions
+Is section 194C still valid from 1 April 2026?
Not for payments credited or paid from 1 April 2026. Contractor payments are now entry 6(i) in the section 393(1) table of the Income-tax Act, 2025. The rate and threshold are the same as under 194C: 1% for individuals and HUFs, 2% for others, above ₹30,000 a payment or ₹1,00,000 a year. Payments before 1 April 2026 stay under 194C.
+What is the TDS rate on rent for FY 2026-27?
10% on rent for land, buildings or furniture and 2% on rent for plant, machinery or equipment, above ₹50,000 a month or part of a month. Individuals and HUFs not under audit deduct 2% on rent above ₹50,000 a month.
+Did the Finance Act 2026 change TDS rates?
Not the rates. The Finance Bill 2026 kept the Finance Act 2025's TDS rates for FY 2026-27. Its changes to section 393 were a cross-reference and two cases with no TDS: interest paid to co-operative banks, and Motor Accidents Claims Tribunal interest paid to individuals.
+How do I map old sections to the new ones in my returns?
Use the code for each table entry. Forms 138 and 140 ask for the code, not the old section. Keep the old section in your category names so people can still find them.
What is the bottom line?
The rates you know mostly still apply. The labels, forms and codes around them changed. Rebuild your withholding categories from 1 April 2026, keep the old ones for older invoices, and have your CA confirm the chart once a year.
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Manoj · Published on 29 October 2026
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