What is TDS?
TDS (Tax Deducted at Source) is a system where tax is deducted at the time of making a payment, instead of waiting till the end of the year.
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In simple terms, if someone is paying you income like salary, interest, rent, or professional fees they deduct a small percentage as tax and deposit it with the government on your behalf.
For example, if your employer pays you ₹50,000 as salary, a portion of it is deducted as TDS and the rest is credited to your account. That deducted amount is already counted as tax paid when you file your return.
The main idea behind TDS is to collect tax in advance and reduce the chances of tax evasion. It also spreads your tax liability throughout the year, so you don’t have to pay a big amount at once.
In short, TDS = tax paid little by little, as you earn.
This guide covers the latest TDS rate chart for FY 2026-27, presented in a clear and practical format to help you apply it correctly.
TDS Rates For Residents FY 2026-27
Section | Nature of payment | Threshold limit | TDS Rate(%) |
192 | Salary | Basic exemption limit | Slab Rate |
192A | EPF Withdrawal (Premature) | Rs. 50,000 | 10% |
193 | Interest on Securities | Rs. 10,000 | 10% |
194 | Dividends | Rs. 10,000 | 10% |
194A | Interest (Bank/Post office) | Rs. 50,000 | 10% |
194A | Interest (Senior citizens) | Rs. 100,000 | 10% |
194A | Interest (Others) | Rs. 10,000 | 10% |
194B | Lottery & Gambling winnings | Rs. 10,000 | 30% |
194BA | Online gamings winnings | No Limit | 30% |
194BB | Horse Race winnings | Rs. 10,000 ( aggregate winnings during a Financial year) | 30% |
194C | Payment to Contractors or Sub contractors | Rs. 30,000 (Single Transaction) Rs 100,000 (in a FY) | Individual/HUf-1% Others-2% |
194D | Insurance Commision | Rs. 20,000 | Individual/HUf-2% Others-10% |
194DA | Life Insurance Payout | Rs. 1,00,000 | 2% |
194EE | National Saving Scheme (NSS) Withdrawal | Rs. 2,500 | 10% |
194G | Lottery Commission | Rs. 20,000 | 2% |
194H | Commission/Brokerage | Rs. 20,000 | 2% |
194J(a) | Fees for Technical services/Royalty | Rs.50,000 | 2% |
194J(b) | Fees for Professional services | Rs.50,000 | 10% |
194I(a) | Rent (Plant & Machinery) | Rs. 50,000 | 2% |
194I(b) | Rent (Land, Building & Furniture) | Rs. 50,000 | 10% |
194IA | Transfer of immovable Property | Rs. 50 lakhs | 1% |
194IB | Rent payment by individual / HUF not covered u/s 194I | Rs. 50,000/month | 2% |
194IC | Joint development Agreement | No limit | 10% |
194K | Mutual Fund income | Rs. 10,000 | 10% |
194LA | Compensation on Transfer of immovable property other than agricultural land | Rs. 5,00,000 | 10% |
194LBA | Business Trust income | No limit | 10% |
194LBB | Investment Fund income | No limit | 10% |
194LBC | Securitisation Trust income | No limit | 10% |
194M | High Value Payments by individual/HUF | Rs. 50 lakh | 2% |
194N | Cash withdrawal ( >Rs 1 crore) | Rs. 1 crore | 2% |
194N | Cash withdrawal ( no ITR filed) | Rs. 20 lakh to Rs.1 crore More than Rs. 1 crore | 2% 5% |
194O | E commerce transactions | Rs. 5 lakh | 0.10% |
194P | Senior citizens (>75 years) having salary & interest | No limit | Slab Rates |
194Q | Purchase of Goods | Rs. 50 lakh | 0.10% |
194R | Benefits or perquisites from Business and profession | Rs. 20,000 | 10% |
194S | Consideration on transfer of Virtual Digital Assets( VDA) by person other than specified person | Rs. 10,000 | 1% |
194S | Consideration on transfer of Virtual Digital Assets( VDA) by specified person | Rs.50,000 | 1% |
194T | Payment by partnership firms to Partners | Rs.20,000 | 10% |
TDS Rates For Non Residents FY 2026-27
Section | Nature of Payment | TDS Rate (%) |
192 | Salary | Slab Rates |
192A | EPF Withdrawal | 10% |
194B | Winnings from Lottery/Gambling | 30% |
194BA | Winnings from Online Gaming | 30% |
194BB | Winnings from Horse Racing | 30% |
194E | Payment to Non Resident Sportsperson / Sports Association | 20% |
194EE | NSS payments | 10% |
194F | Repurchase of Mutual Fund | 20% |
194G | Commission on sale of lottery tickets | 2% |
194LB | Infrastructure Debt Interest | 5% |
194LBA | Business Trust Income | 5% / 10% / 30% |
194LBB | Investment Fund paying an Income to a unit holder | 30% |
194LBC | Income in respect of investment made in a securitisation Trust | 30% |
194LC | Foreign Currency Borrowings: | |
Long term bonds (IFSC listed) | 4% | |
Bonds issued after 1-04-2023 | 9% | |
194LD | Interest on bonds / Govt securities | 5% |
194N | Cash withdrawal in excess of ₹1 crore | 2% |
If ITR not filed for preceding 3 years: | ||
| 2% 5% | |
194T | Payment in nature of salary, commission, bonus, interest to a partner of the firm from 1-04-2025 when payment exceeds Rs.20,000 | 10% |
195 | Investment income (NRI) | 20% |
195 | Long term capital gain (115E) | 20% |
195 | Long term capital gain (112A) in excess of Rs. 1.25 lakh | 12.50% |
195 | Short term capital gain (111A) | 12.50% |
195 | Other long term capital gains | 20% |
195 | Dividend income other than IFSC | 10% |
195 | Dividend (IFSC units) | 12.50% |
195 | Interest on foreign borrowings | 20% |
195 | Royalty (book/software) Sec 115A cases | 20% |
195 | Royalty (other cases) Approved agreements | 20% |
195 | Fees for technical services Govt/approved agreements | 20% |
195 | Any other income (Residual) | 20% |
196A | Income from Mutual fund units (NR) | 30% |
196B | Units income (Sec115AB(1)(i)) | 20% |
196B | LTCG on units (Sec 115 AB) | 12.50% |
196C | Income from bonds / GDR (Sec 115AC) | 12.50% |
196C | LTCG on transfer of bonds / GDR (Sec 115AC) | 12.50% |
196D | FII income (non-capital gains) | 20% |
196D(1A) | Specified fund income Sec 115AD(1)(a) | 10% |
TCS Rates FY 2026-27
What is TCS?
Tax Collected at Source (TCS) is a system where the seller collects tax from the buyer at the time of sale and deposits it with the government. It applies to specific transactions like sale of goods, motor vehicles, foreign remittances, and certain commodities.
In simple terms, TCS is collected while receiving payment, unlike TDS which is deducted while making payment.
The purpose of TCS is to ensure better tax compliance and track high-value transactions. The amount collected can later be claimed by the buyer while filing their income tax return.
In short, TCS = tax collected by the seller at the time of sale.
Section | Nature of Transaction | Threshold Limit | TCS Rate |
206C(1) | Alcoholic liquor for human consumption | No limit | 2% |
206C(1) | Tendu leaves | No limit | 2% |
206C(1) | Timber (forest lease or other mode) | No limit | 2% |
206C(1) | Scrap | No limit | 2% |
206C(1) | Minerals (coal, lignite, iron ore) | No limit | 2% |
206C(1C) | Parking lot,Toll plaza, Mining & quarrying | No limit | 2% |
206C(1F) | Sale of motor vehicle | Rs.10 lakh (per vehicle) | 1% |
206C(1G) | Foreign remittance (LRS – education/medical) | Rs.10 lakh | 2% |
206C(1G) | Foreign remittance (LRS – other purposes) | Rs.10 lakh | 20% |
206C(1G) | Overseas tour package | No limit | 2% |
206C(1H) | Sale of goods | ₹50 lakh (per buyer per year) | 0.10% |
Conclusion
Understanding the TDS & TCS rate chart for FY 2026–27 is essential for accurate tax compliance and avoiding penalties. With different sections, rates, and thresholds applicable to various transactions, applying the correct provision at the right time makes all the difference.
This guide gives you a quick and reliable reference to handle TDS and TCS efficiently in day-to-day transactions. Stay updated with the latest rates, check applicability carefully, and ensure proper deduction or collection.
In short, correct TDS/TCS application = better compliance, fewer errors, and smoother tax filing.
