TDS Rate Chart 2026-27: Compare the Income-tax Acts of 1961 and 2025

This TDS rate chart 2026-27 compares the old and new section codes in simple terms, so students and businesses can find the provision relevant to each payment.

From 1 April 2026, TDS provisions are governed by the Income-tax Act, 2025. Many separate sections from the Income-tax Act, 1961 are presented in tables under the new Act. This guide helps you find the corresponding provision and understand the basic rate.

First, what is TDS?

TDS means Tax Deducted at Source. In certain cases, the person making a payment deducts tax before paying the recipient and deposits that tax with the Government.

For example, a business may need to deduct TDS when it pays a contractor, professional, landlord or commission agent. Whether TDS is required depends on the payment, the amount, the payer and other conditions.

Which Income-tax Act applies?

• If the relevant payment or credit happened on or before 31 March 2026, use the applicable provisions of the Income-tax Act, 1961.

• If it happened on or after 1 April 2026, use the applicable provisions of the Income-tax Act, 2025.

For many payments, TDS is considered at the earlier of credit or payment. For example, if a contractor’s bill was credited in the books in March 2026 and paid in April 2026, the March credit generally determines which Act applies.

The Income Tax Department’s transition guidance also says that TDS already deducted on credit should not be deducted again when the same amount is paid.

How do I read a new TDS code?

Take a contractor payment as an example:

Old Act: Section 194C

New Act: Section 393(1), Table serial number 6(i)

TDS Rate Chart 2026-27: Salary and Payments to Residents

The rates below are basic rates. Read them with the threshold, exemption and special rules applicable to the payment.

Payment	1961 Act	2025 Act	Basic rate
Salary	192	392	Average rate based on estimated taxable salary
Taxable recognised provident fund withdrawal	192A	392(7)	10%
Interest on securities	193	393(1), Table 5(i)	Generally 10%
Dividend	194	393(1), Table 7	10%
Other interest, such as eligible deposit interest	194A	393(1), Table 5(ii)–(iii)	Generally 10%
Contractor payment	194C	393(1), Table 6(i)	1% for individual/HUF contractor; 2% for others
Insurance commission	194D	393(1), Table 1(i)	Applicable rate depends on payee
Taxable income in life insurance payout	194DA	393(1), Table 8(i)	2% of income component
Commission or brokerage	194H	393(1), Table 1(ii)	2%
Rent for plant, machinery or equipment	194-I	393(1), Table 2(ii)	2%
Rent for land, building, furniture or fittings	194-I	393(1), Table 2(ii)	10%
Rent paid by a specified individual/HUF	194-IB	393(1), Table 2(i)	2%
Purchase of immovable property	194-IA	393(1), Table 3(i)	1%
Monetary payment under a specified joint development agreement	194-IC	393(1), Table 3(ii)	10%
Professional fees, non-salary director payments and most royalty	194J	393(1), Table 6(iii)	10%
Technical services and specified film royalty	194J	393(1), Table 6(iii)	2%
Income from specified mutual fund units	194K	393(1), Table 4(i)	10%
Compensation on compulsory acquisition of specified property	194LA	393(1), Table 3(iii)	10%
Business trust distribution to resident unitholder	194LBA	393(1), Table 4(ii)	10%
Investment fund distribution to resident unitholder	194LBB	393(1), Table 4(iii)	10%
Securitisation trust income to resident investor	194LBC	393(1), Table 4(iv)	10%
Specified contractor, commission or professional payment by individual/HUF	194M	393(1), Table 6(ii)	2%
Payment facilitated by e-commerce operator	194-O	393(1), Table 8(v)	0.1%
Tax deduction by specified bank for eligible senior citizen	194P	393(1), Table 8(iii)	Based on calculated tax
Purchase of goods above the specified limit	194Q	393(1), Table 8(ii)	0.1% on amount exceeding ₹50 lakh
Business or professional benefit/perquisite	194R	393(1), Table 8(iv)	10%
Transfer of virtual digital asset	194S	393(1), Table 8(vi)	1%

The section references and basic rates above follow the resident-payment and salary provisions of the Income-tax Act, 2025, as amended by the Finance Act, 2026.

A few everyday examples

• Paying a contractor: A business paying a contractor would previously look at section 194C. Under the 2025 Act, it looks at section 393(1), Table 6(i). The basic rate depends on whether the contractor is an individual/HUF or another type of person.

• Paying office rent: Rent for a building is generally shown at 10% in the chart. Rent for machinery is generally shown at 2%. Both are covered by old section 194-I and new section 393(1), Table 2(ii).

• Paying a professional: Professional fees generally attract a 10% basic rate. Some technical service payments attract 2%. Both require you to check the precise nature of the payment under old section 194J or new section 393(1), Table 6(iii).

  
  

These examples explain the section mapping. You must still check the relevant threshold and conditions before deducting tax.

Other TDS payments: winnings, withdrawals and partner payments

Payment	1961 Act	2025 Act	Basic rate
Lottery and other specified winnings	194B	393(3), Table 1	Generally 30%
Net winnings from online games	194BA	393(3), Table 2	Generally 30%
Horse-race winnings	194BB	393(3), Table 3	Generally 30%
Commission or prize on lottery tickets	194G	393(3), Table 4	2%
Cash withdrawal above the applicable limit	194N	393(3), Table 5	Generally 2%; special rules apply
Payment from National Savings Scheme deposit	194EE	393(3), Table 6	10%
Remuneration, commission, bonus or interest paid to a firm’s partner	194T	393(3), Table 7	10%

Note for partnership firms: The correct new reference for payments covered by old section 194T is section 393(3), Table 7. The ₹20,000 threshold and other conditions should be checked before deduction.

Payments to non-residents

Payments to non-residents need extra care. The withholding rate may depend on the recipient’s status, the type of income, a tax treaty and the required documents.

Payment	1961 Act	Corresponding 2025 Act entry	Rate shown in new Act
Payment to non-resident sportsperson, entertainer or sports association	194E	393(2), Table 1	20%
Specified foreign borrowing or bond interest	194LC	393(2), Table 2–4	4%, 5% or 9%, as applicable
Interest paid by infrastructure debt fund	194LB	393(2), Table 5	5%
Business trust distribution to non-resident unitholder	194LBA	393(2), Table 6–7	Depends on income type
Investment fund distribution to non-resident unitholder	194LBB	393(2), Table 8	Rates in force
Securitisation trust income to non-resident investor	194LBC	393(2), Table 9	Rates in force
Income from specified units paid to non-resident	196A	393(2), Table 10	Generally 20%, subject to eligible treaty rate
Specified offshore fund unit income or gains	196B	393(2), Table 11–12	10% or 12.5%
Income or gains from specified bonds/GDRs	196C	393(2), Table 13–14	10% or 12.5%
Specified securities income of FII or specified fund	196D	393(2), Table 15–16	Generally 20% or 10%, as applicable
Other chargeable sums paid to non-resident or foreign company	195	393(2), Table 17	Rates in force

Section 194LD covered specified interest paid to an FII/QFI under the old Act. Check the particular instrument and the applicable period before assigning a new table entry or rate; it should not be treated as a general rate for all FII interest. The official 2025 Act sets out non-resident categories in section 393(2).

Does the rate chart tell me whether to deduct TDS?

No. A rate is only one part of the check. Before deducting TDS, ask:

1. What exactly is being paid?

2. Is the recipient a resident or non-resident?

3. Has the applicable payment threshold been crossed?

4. Does an exemption or lower/nil deduction certificate apply?

5. Is the recipient’s PAN available?

6. Which Act applies on the date of credit or payment?

For example, the basic rate for a contractor may be 1% or 2%, but the contractor-payment threshold also matters. Under the 2025 Act, the table specifies ₹30,000 for an individual payment and ₹1,00,000 for aggregate payments.

Frequently asked questions:

Have all TDS rates changed under the 2025 Act?

No. The major change for someone reading this chart is how many provisions are organised and quoted. Always check the rate and conditions for the relevant tax year rather than assuming a new section number means a new rate.

Should I enter section 194C for a contractor payment made after 1 April 2026?

For a transaction governed by the 2025 Act, use section 393(1), Table 6(i) in the applicable filing. The Income Tax Department specifically uses contractor payments to explain this change.

Is old section 194F included?

Section 194F, concerning repurchase of certain mutual fund/UTI units, ceased to apply from 1 October 2024. It therefore has no current TDS rate in this chart.

When you see a new TDS code, start with the type of payment. Find its old section in the chart, then locate the corresponding 2025 Act section and table item. Finally, check the threshold and conditions before making a deduction.

Disclaimer: For learning and reference only. TDS rates may vary by transaction and change with the law. Check current provisions or consult your tax advisor before professional use.