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For businessesRates reviewed September 2026

TDS Calculator FY 2026-27: Section-wise Rate Chart

This TDS calculator and rate chart covers the sections that most payments in an Indian business actually hit: salary, interest, contractor payments, commission, rent, professional and technical fees, payments to partners, purchase of goods and payments to non-residents. Rates and thresholds are stated for FY 2026-27 (AY 2027-28). Returns being filed in the current season relate to FY 2025-26 (AY 2026-27), where most of the same thresholds already applied following the Finance Act, 2025 revisions.

From 1 April 2026 the Income-tax Act, 2025 replaced the Income-tax Act, 1961 and folded the whole 194 series into two provisions: section 392 for salary and section 393 for every other payment, with tax collection at source in section 394. Deduction is now identified by a payment code inside the section 393 table rather than by a separate section number, so quarterly statements no longer carry 194C or 194J. The rate chart below gives both the new provision and the familiar 1961 Act number, because that is what people still search and what older contracts still quote.

Two cross-cutting rules apply to every line. Deduction is triggered at credit to the payee's account or at payment, whichever is earlier, and a credit to a suspense account counts. And where the payee has not furnished a PAN, section 397(2) of the 2025 Act, which merges the earlier sections 206AA and 206CC, requires deduction at the highest of the rate specified for that payment, the rates in force, or 20%, with purchase of goods carved out at 5%.

TDS Calculator

₹
Payee has furnished a PAN

Without a PAN the rate is the highest of the specified rate, the rates in force, or 20%.

Whichever is earlier. It fixes the challan due date.

TDS to deduct

₹20,000

10% on ₹2,00,000

SectionIncome-tax Act, 2025 provision and the 1961 Act number
393 / 194J
ThresholdFor the financial year, per payee
₹50,000
Threshold crossed₹2,00,000 is above ₹50,000
Yes
Amount liable to deductionThe whole amount once the threshold is crossed
₹2,00,000
Rate appliedPayee PAN furnished
10%
TDS to deduct
₹20,000
Net amount payable to the payee₹2,00,000 less ₹20,000
₹1,80,000
Challan due dateThe 7th of the month following the deduction
7 Sept 2026
  • Deduction is triggered at credit to the payee's account or at payment, whichever is earlier. A credit to a suspense account counts as a credit to the payee.
  • Late deposit carries interest at 1.5% for every month or part of a month under section 398, earlier 201(1A).
  • File the quarterly statement by 31 July, 31 October, 31 January and 31 May, on Form 138 for salary and Form 140 for other payments from FY 2026-27.

The formula

TDS = Amount paid or credited × Rate for that payment (applied once the annual threshold is crossed)

Amount paid or credited
The gross sum before any deduction, taken at credit or payment, whichever is earlier.
Threshold
The limit below which no deduction is required. For most payments it applies for the financial year taken as a whole, per payee.
Rate
The rate in the section 393 payment table for that nature of payment, or the slab based average rate in the case of salary under section 392.
Non-PAN rate
Higher of the specified rate, the rates in force, or 20% under section 397(2), earlier section 206AA. Purchase of goods is 5%.

Once a threshold is crossed, most sections require deduction on the whole amount for the year rather than only the excess; purchase of goods is the main exception.

How to calculate it

  1. 1

    Classify the payment

    Decide what the payment actually is: a works contract, a professional fee, rent, commission or a purchase of goods. Classification drives both the rate and the threshold, and a single vendor can fall under different heads for different invoices.

  2. 2

    Check the threshold for the year

    Add up everything paid or credited to that payee under that head so far in the financial year. Thresholds are annual and per payee unless the chart says otherwise, and contractor payments carry both a single payment limit and an annual limit.

  3. 3

    Confirm the payee status and PAN

    Individual or HUF payees attract a lower rate on works contracts. Verify the PAN before payment, because a missing PAN pushes the rate to the highest of the specified rate, the rates in force or 20%, and for purchase of goods to 5%.

  4. 4

    Apply the rate on the gross amount

    Deduct on the sum paid or credited. Where the invoice separately shows GST and the deduction is made at the time of credit, the GST component is generally excluded for most service payments.

  5. 5

    Deposit by the due date

    Pay by the 7th of the following month for April to February deductions and by 30 April for March. Late deposit carries interest at 1.5% for every month or part of a month under section 398, earlier 201(1A).

  6. 6

    File the quarterly statement and issue certificates

    File by 31 July, 31 October, 31 January and 31 May for the four quarters, using Form 138 for salary and Form 140 for other payments from FY 2026-27. Issue the deduction certificate to the payee after filing so it matches the annual tax statement.

Section-wise TDS rates and thresholds for FY 2026-27 (AY 2027-28)

Section-wise TDS rates and thresholds for FY 2026-27 (AY 2027-28)
Nature of paymentSection (2025 Act / 1961 Act)ThresholdRate for a resident with PAN
Salary392 / 192Basic exemption limitAverage rate on estimated salary income
Interest on a bank or post office deposit393 / 194A₹50,000 a year, ₹1,00,000 for a senior citizen10%
Interest other than from a bank or post office393 / 194A₹10,000 a year10%
Interest on securities393 / 193₹10,000 a year10%
Dividend from a domestic company393 / 194₹10,000 a year for an individual shareholder10%
Winnings from a lottery, crossword puzzle or card game393 / 194B₹10,000 in a single transaction30%
Contractor and sub-contractor payments393 / 194C₹30,000 in a single payment or ₹1,00,000 in the year1% for an individual or HUF, 2% for others
Commission or brokerage393 / 194H₹20,000 a year2%
Rent of plant, machinery or equipment393 / 194I₹50,000 a month2%
Rent of land, building or furniture393 / 194I₹50,000 a month10%
Rent paid by an individual or HUF not liable to tax audit393 / 194IB₹50,000 a month2%
Transfer of immovable property other than agricultural land393 / 194IA₹50,00,000 consideration or stamp duty value1%
Fees for professional services393 / 194J₹50,000 a year10%
Fees for technical services, call centre operations and royalty for cinematograph films393 / 194J₹50,000 a year2%
Remuneration or fees to a director393 / 194JNo threshold10%
Payment by an e-commerce operator to a seller393 / 194O₹5,00,000 a year for an individual or HUF seller0.1%
Benefit or perquisite arising from business or profession393 / 194R₹20,000 a year10%
Purchase of goods by a buyer with turnover above ₹10 crore393 / 194Q₹50,00,000 a year per seller0.1% on the amount above the threshold
Salary, remuneration, commission, bonus or interest paid by a firm to a partner393 / 194T₹20,000 a year10%
Payment to a non-resident393 / 195No thresholdRates in force for the income, or the treaty rate if lower
Payee has not furnished a PAN397(2) / 206AAAs applicable to the paymentHigher of the specified rate, the rates in force or 20%, and 5% for purchase of goods

Worked example

Payment
Professional fee to a consultant
Amount for FY 2026-27
₹2,00,000
PAN furnished
Yes
Date of credit
18 August 2026
  • Threshold for professional fees is ₹50,000 a year, and ₹2,00,000 crosses it
  • Deduction applies to the whole ₹2,00,000, not only the excess
  • TDS = ₹2,00,000 × 10% = ₹20,000
  • Challan due by 7 September 2026, reported in the Q2 statement due 31 October 2026
  • Had the PAN not been furnished, the rate would be 20% and the deduction ₹40,000

TDS payable = ₹20,000, and the consultant is paid ₹1,80,000.

Frequently asked questions

The common resident rates are 10% on interest, dividends and professional fees, 2% on technical fees, commission and plant or machinery rent, 10% on rent of land and buildings, 1% or 2% on contractor payments depending on whether the payee is an individual, 0.1% on purchase of goods above ₹50 lakh and 10% on payments by a firm to its partners. Salary is deducted at the average rate on estimated income. Every rate is subject to the threshold for that payment.
From 1 April 2026 the 194 series is consolidated into section 392 for salary and section 393 for all other payments, with tax collection at source in section 394. Each nature of payment now appears as an entry with its own payment code inside the section 393 table. The rates and thresholds carried over largely unchanged, so the practical effect is on reporting rather than on liability.
Section 397(2) of the Income-tax Act, 2025, which merges the earlier sections 206AA and 206CC, requires deduction at the highest of the rate specified for that payment, the rates in force, or 20%. Purchase of goods is carved out at 5%. The higher rate applies from the first rupee, and the deductor cannot rely on a declaration in place of a PAN.
By the 7th of the month following the month of deduction for April to February, and by 30 April for tax deducted in March. The obligation is on the date of deduction, so a payment made on the last day of a month is still due on the 7th of the next. Late deposit carries interest at 1.5% for every month or part of a month.
31 July for the April to June quarter, 31 October for July to September, 31 January for October to December, and 31 May for January to March. From FY 2026-27 the statements are furnished on Form 138 for salary, replacing Form 24Q, and Form 140 for other payments, replacing Form 26Q. A late statement attracts a fee of ₹200 a day under section 427, earlier section 234E.
The deductor is treated as an assessee in default under section 398 of the Income-tax Act, 2025, earlier section 201, and pays interest at 1.5% for every month or part of a month from the date of deduction to the date of payment. The expenditure on which the tax was deductible can also be disallowed in part while computing business income. Recovery proceedings and prosecution are available in serious cases.
Only for periods up to 31 March 2026. Form 26Q remains the correct form for a belated or revised statement covering FY 2025-26 or an earlier year. For deductions from 1 April 2026 onwards the statements are Form 138 for salary and Form 140 for other resident payments under the Income-tax Rules, 2026.

Sources

Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it.

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