TDS Rate Chart FY 2025-26 (AY 2026-27) | Comprehensive Guide for Business Owners

TDS Rate Chart FY 2025-26 (AY 2026-27) | Comprehensive Guide for Business Owners

Deducting on a payment made on or after 1 April 2026? The Income-tax Act 2025 is in force for tax year 2026-27. The rates and thresholds below are unchanged, but the section numbers, payment codes and return forms are not — see the TDS rate chart for FY 2026-27 under Section 393. This page remains the reference for FY 2025-26 (quarters up to March 2026).

Introduction

As we enter the Financial Year 2025-26, the government has introduced significant relief measures and new compliance requirements in the TDS landscape. For business owners and finance teams, staying updated is not just about compliance—it’s about cash flow management.

This guide provides a consolidated view of the TDS Rates for FY 2025-26, incorporating all amendments from Budget 2025.

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🚨 Key Changes in Budget 2025 (Must Read)

Before you refer to the rate chart, please note these critical updates that will impact your accounting entries starting April 1, 2025:

1. Huge Relief on Rent (Sec 194I): The TDS threshold for rent on land, building, and furniture has been increased from ₹2.4 Lakhs to ₹6 Lakhs per annum. You no longer need to deduct TDS for smaller rental agreements.
2. New TDS on Partners (Sec 194T): A new section has been inserted. Partnership firms must now deduct 10% TDS on salary, remuneration, commission, or interest paid to partners if it exceeds ₹20,000 in a financial year.
3. Higher Thresholds for Professionals: The limit for deducting TDS on Professional Fees (194J) and Commission (194H) has been raised, reducing the compliance burden for small transactions.
4. No More “206AB” Check: The requirement to check if a vendor has filed their ITR (Section 206AB) has been removed for this financial year, simplifying the vendor onboarding process.
5. Lower rates carried in from the 2024 amendments: insurance commission to non-companies (194D), rent paid by non-audited individuals (194-IB), and commission (194H) are all now at 2%.
6. TCS on sale of goods withdrawn: Section 206C(1H) ceased to apply from 1 April 2025. Buyers above ₹10 crore deduct under 194Q; sellers no longer collect TCS on goods, and the buyer-seller overlap declarations are no longer needed.

The rates are the easy part. Deducting at credit rather than payment, depositing before the 7th, and filing 26Q on time is where businesses actually default — and a missed deduction disallows 30% of the expense in your own return. Our outsourced accounting retainer computes TDS as transactions post and deposits the challan every month; automated compliance puts every due date on a monitored calendar. Buying property above ₹50 lakh? See Form 26QB filing.

TDS Rate Reference Table (FY 2025-26)

Section	Nature of Payment	Threshold Limit (FY 25-26)	TDS Rate (Individual/HUF)	TDS Rate (Others)
192	Salary	Basic Exemption Limit	Slab Rate	Slab Rate
192A	EPF Premature Withdrawal	₹50,000	10%	10%
194	Dividend Income	₹10,000 (Increased)	10%	10%
194A	Interest (Bank/Post Office)	₹50k (Others) / ₹1L (Sr. Citizen)	10%	10%
194A	Interest (Unsecured Loans)	₹10,000	10%	10%
194C	Contractor (Single Bill)	₹30,000	1%	2%
194C	Contractor (Aggregate FY)	₹1,00,000	1%	2%
194D	Insurance Commission	₹20,000 (Increased)	2%	10%
194H	Commission / Brokerage	₹20,000 (Increased)	2%	2%
194I	Rent (Plant & Machinery)	₹6,00,000 p.a. (₹50k/month)	2%	2%
194I	Rent (Land/Building/Furniture)	₹6,00,000 p.a. (₹50k/month)	10%	10%
194IA	Purchase of Immovable Prop.	₹50 Lakhs	1%	1%
194IB	Rent by Individual/HUF (Non-Audit)	₹50,000 p.m.	2%	NA
194J	Professional Fees	₹50,000 (Increased)	10%	10%
194J	Tech Services / Royalty	₹50,000 (Increased)	2%	2%
194Q	Purchase of Goods (>10Cr T/O)	₹50 Lakhs	0.1%	0.1%
194R	Business Perquisites	₹20,000	10%	10%
194T	Partners’ Remuneration/Int.	₹20,000 (NEW)	10%	NA

(Note: If a valid PAN is not furnished, TDS is generally deducted at 20% or the applicable rate, whichever is higher.)

Section-wise guides

The chart gives the number. These guides give the rule behind it — who must deduct, what the threshold actually tests, when to deduct and deposit, and what a miss costs.

• TDS on Contractors — Section 194C: the ₹30,000 and ₹1 lakh limits, 1% and 2%, transporter exemption
• TDS on Rent — Section 194I: the new ₹50,000-a-month limit, 2% and 10%, and 194-IB for individual tenants
• TDS on Commission & Brokerage — Section 194H: ₹20,000 limit, 2%, and the discount-vs-commission line
• TDS on Professional & Technical Fees — Section 194J: ₹50,000 limit, 10% and 2%, and the 194C/194J line
• TDS on Purchase of Goods — Section 194Q: buyers above ₹10 crore, ₹50 lakh per seller, 0.1% on the excess — and the withdrawal of TCS on sales
• TDS on Partners — Section 194T: the new 10% on remuneration and interest, at credit, from 1 April 2025

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COMMON QUERIES

Frequently Asked Questions

Clear answers to help you decide. No jargon, just facts

Has the TDS rate for Contractors (194C) changed?

No, the rates remain 1% for Individual/HUF contractors and 2% for Others. However, the aggregate limit is ₹1 Lakh per annum.

Is TDS applicable on Partner’s Remuneration?

Yes, effective FY 2025-26, under the new Section 194T, firms must deduct 10% TDS if the payment to a partner exceeds ₹20,000.

Do I still need to check if my vendor has filed ITR (Sec 206AB)?

No. The Finance Act 2025 has omitted the compliance burden of Section 206AB for normal transactions. You only need to verify their PAN.

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Avoid Late Fees and Interest Penalties

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