TDS Rates Chart 2026-27 — All Sections, Thresholds & Rates at a Glance
By Parul Singh, GST Practitioner · TDS · Updated June 2026
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TDS Rates Chart FY 2026-27
In my 15+ years as a tax practitioner in Karol Bagh, I have handled TDS compliance for hundreds of businesses across Delhi -- from small shops in Chandni Chowk to large companies in Connaught Place. TDS is one area where even a small mistake can result in disallowance and interest. Here is the complete TDS rates chart for FY 2026-27.
Official Reference: Sections 192 to 206AA of the Income Tax Act 1961 prescribe the TDS rates. Section 206AA mandates 20% TDS if PAN is not provided.
| Section | Nature of Payment | Threshold | TDS Rate |
|---|---|---|---|
| 192 | Salary | Basic exemption | As per slab |
| 194A | Interest (other) | ₹5,000 | 10% |
| 194C | Contractor | ₹30,000/1L annual | 1%/2% |
| 194H | Commission | ₹15,000 | 5% |
| 194I | Rent (building) | ₹2,40,000 | 10% |
| 194I | Rent (machinery) | ₹2,40,000 | 2% |
| 194-IB | Rent by individual | ₹50,000/month | 5% |
| 194J | Professional fees | ₹30,000 | 10% |
| 194Q | Purchase of goods | ₹50 lakh | 0.1% |
| 194O | E-commerce TDS | No threshold | 1% |
📍 Real Example -- Kirti Nagar Furniture Business
A furniture manufacturer in Kirti Nagar pays ₹4.5 lakh monthly rent for his showroom. TDS under Section 194I at 10% = ₹45,000 per month. He must deposit this TDS by the 7th of the next month. If he misses even one TDS payment, the entire ₹4.5 lakh rent is disallowed as a business expense under Section 40(a)(ia) -- that means additional tax of ₹13.5 lakh at 30% slab!
TDS on Salary -- Section 192
TDS on salary is different from other TDS. Your employer calculates your estimated annual income, applies the relevant tax regime, deducts available deductions, and then deducts TDS every month proportionately.
💡 Pro Tip from Parul: If you have multiple employers in a year, each will deduct TDS based on their salary. This often leads to under-deduction because neither employer accounts for the other salary. Submit Form 12BB to your current employer declaring previous employment income to ensure correct TDS.
TDS on Rent -- Sections 194I and 194-IB
| Feature | Section 194I | Section 194-IB |
|---|---|---|
| Who deducts? | Any person (except individual/HUF not under audit) | Individual or HUF (no business income) |
| Threshold | ₹2,40,000/year | ₹50,000/month |
| Rate (building) | 10% | 5% |
| TAN required? | Yes | No |
📍 Real Example -- Individual Tenant in South Extension
Rahul, an individual living in South Extension, pays ₹60,000/month rent for his apartment. Since his annual rent exceeds ₹50,000/month, he must deduct TDS under Section 194-IB at 5% = ₹3,000/month. He does not need a TAN -- he can deposit TDS using his PAN.
TDS on Professional Fees -- Section 194J
Section 194J requires TDS at 10% on professional fees above ₹30,000. This applies to fees paid to lawyers, doctors, CAs, architects, interior designers, technical consultants, and freelancers.
⚠️ Common Mistake: A common mistake I see in Delhi is businesses deducting 2% TDS on professional fees treating them as contractor payments under Section 194C. The correct section for professional services is 194J at 10%. The difference between 2% and 10% is significant -- if the department reclassifies during assessment, you will pay the shortfall plus interest and penalty.
TDS Return Filing and Due Dates
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | Apr-Jun | 31 July 2026 |
| Q2 | Jul-Sep | 31 October 2026 |
| Q3 | Oct-Dec | 31 January 2027 |
| Q4 | Jan-Mar | 31 May 2027 |
💡 Pro Tip from Parul: Need help with TDS compliance? I handle quarterly TDS return filing starting at ₹2,499/quarter. WhatsApp me at +91 95401 04776.
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Frequently Asked Questions
What is the TDS rate if PAN is not provided?
Under Section 206AA, TDS at 20% or the prescribed rate, whichever is higher, applies if PAN is not provided.
Is TDS applicable on rent paid by individuals?
Yes, under Section 194-IB, if an individual pays rent exceeding ₹50,000 per month, TDS at 5% must be deducted. No TAN is required.
What is the penalty for not deducting TDS?
Under Section 271C, penalty equals the TDS amount not deducted. Plus the expense is disallowed under Section 40(a)(ia).
When is TDS on salary deducted?
TDS on salary is deducted monthly by the employer. The employer calculates your estimated annual income and deducts proportionate TDS each month.
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