TDS Rate Chart AY 2026-27: Quick Guide

2025-10-16

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Key Takeaways

TDS is applicable when income is paid and exceeds specified thresholds.
Rates and limits differ based on transaction type and recipient status.
Salaried individuals are taxed based on the old or new income tax regime.
Investing in life insurance plans like annuities can help reduce TDS and grow tax-free income.

Tax Deduction at Source (TDS) is an important tax compliance. TDS applies to any payment that is changing hands as income for the receiving party. The payor must deduct TDS from any such payment if it exceeds the threshold limit specified for that kind of transaction.

CBDT and the Ministry of Finance have specified the rates for such TDS deductions. The rates and threshold limits vary based on the purpose of the transaction or type of income.

Also, any TDS deductions must be submitted to the central government account.

A taxpayer (deductor) who makes a payment of a specified nature to the deductee is responsible for deducting tax at source and submitting the same into the account of the Central Government.

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Here is the TDS rate chart for a person other than a company AY 2026-27, i.e., FY 2025-26:

Section & Transaction	Threshold Limit (₹)	TDS Rates (%)		TDS Rates (May 14, 2020, to March 2021) (%)
		Resident	Non-resident		Non-resident
(192) Salaries	-	Normal slab rate	Normal slab rate		Normal slab rate
(192A) Premature withdrawal from EPF	50,000	With PAN: 10 Without PAN: 20	10 *The threshold limit is 30,000		10
(193) Interest on securities - 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year	10,000	10	-		-
(193) Interest on securities - Debentures	5,000	10	-		-
(193) Interest on securities - Other securities
(194) Dividends	10 ,000	10	-		-
(194A) Interest other than interest from securities (from deposits with banks, co-operative society engaged in banking, post office)	Senior citizens - 1 lakh	10	-		-
(194A) Interest other than interest from securities (from deposits with banks, a co-operative society engaged in banking, a post office)
(194B) Income from lottery winnings, card gams, crossword puzzles, and others	(For other gaming - Refer 194BA)	30	30		30
(194BA) Income from online games
(194BB) Income from winning a Horse race	10,000 (annual aggregate)	30	30		30
(194C) Contractor-Single transaction	30,000
Individual/HUF		1	-		-
-Others		2	-		-
(194C) Contractor – Consolidated Payment During the F.Y.	1,00,000
- Individual/HUF		1	-		-
- Others		2	-		-
(194D) Insurance commission	20 ,000	2
- Other than Company		5	-	3.75	-
- Company		10	-	10	-
(194DA) Maturity of a Life insurance policy	1,00,000	2	-		-
(194E) Non-resident sportsmen (including athletes) or entertainers (not a citizen of India) or non-resident sports associations	-	-	20		20
(194EE) NSS	2,500	10	10		10
(194F) Repurchase units by MFs or the Unit Trust of India(UTI)	-	20	20		20
(194G) Payments, Commission-Lottery	20 ,000	2	2		5
(194H) Commission/Brokerage	20 ,000	2	-		-
(194I) Rent of Plant/Machinery	50,000 per month or part of the month	2	-		-
- Land and Building/Furniture & Fixture		10	-		-
(194IA) Transfer of certain immovable property other than agricultural land	50 Lakh	1	-		-
(194IB) Rent by Individual/HUF not covered under u/s 194-I	50,000 per month	2	-		-
(194IC) Payment under Joint Development Agreements to Individual/HUF	-	10	-		-
(194J) Professional Fees	30,000	10	-		-
(194J) Payment for not carrying out any activity concerning any business
(194J) Payment for not sharing any know-how, copyright, patent and other
(194J) Technical Fees	30,000	2	-		-
(194J) Payment of royalty towards the distribution, sale or exhibition of cinematographic films
(194J) Payment to call centre operator	30,000	2	-		-
(194J) Director's fees/remuneration/commission	30,000	10	-		-
(194K) Payment of any income for a mutual fund, such as dividends	10 ,000	10	-		-
(194LA) Compensation on the transfer of certain immovable property	5,0 0,000	10	-		-
	-	-	2		5

					5
					10
(194LBA1) Income distributed by a business trust to the unit holder
(194LBA2) Interest income of the business trust from SPV distribution to its unit holders
(194LBA2) Dividend income of the business trust from SPV, in which it holds the entire share capital except government-held shares is exempt

					30
					40
(194LBA3) Rental income payment of assets owned by a business trust to unitholders of such business trust
(194LBB) Income in respect of units of investment fund		10	30
					30
					40
(194LBC) Income in respect of investment in securitization fund	-	10	30
					30
					40
					30
(194LC) Income by way of interest by an Indian specified company to a non-resident/foreign company on a foreign currency approved loan / long-term infrastructure bonds from outside India	-	-	5		5
(194LC) Income by way of interest by an Indian specified company on a rupee-denominated bond / any long-term bonds from outside India, which is listed only on a recognised stock exchange located in any International Financial Services Centre	-	-	4		4
(194LD) Interest on certain bonds (rupee-dominated) from Govt. securities to foreign institutional investors or qualified foreign investors	-	-	5		5
(194M) Certain payments by Individual/HUF are not liable for deduction under Section 194C, 194H and 194J	50 lakh	2	-		-
(194N) Cash withdrawal exceeding a specific amount	Others - 1 Crore	2	2		2
(194N) Cash withdrawal if person does not file ITR for the last three years and the original ITR filing due date has expired
- Amount is more than ₹ 20 lakh but up to ₹ 1 crore		2	N.A		2
- Amount exceeds ₹ 1 crore		5	N.A.		5
(194 O) Applicable for e-commerce operators for the sale of goods or provision of services facilitated by them through their digital or electronic facility or platform	5,00, 000	0.10	-		-
(194P) Payment of interest or pension to specific senior citizens aged 75 years or more
(194Q) Payment for a good purchase
(194R) Perquisite or benefit to profession or business
(194S) TDS on transfer of Virtual Digital Assets
(194S) Specified persons: An Individual or a HUF not having income from business or profession OR
(194T) Partner’s Remuneration
(195) Income of Investment made by an NRI	-	-	20		20
(195) Long-term capital gain as referred to in Section 11E in the case of NRI	-		12.5
Long-term capital gain as referred in Section - 12(1)(c)(iii)		-	12.5		10
Long-term capital gain as referred to in Section 112A
Long-term capital gain as referred to in a ny Other Gains		-	12.5		20
(195) Short-term capital gain - 111A	-	-	20		15
(195) Royalty	-	-	2 0		10
(195) Fees for technical services	-	-	2 0		10
(195) Interest income payable by Govt./Indian concern in foreign currency	-	-	20		20
(195) Any Other Income	-	-	30		30
- Company		-	40	-	40
(196A) Income in respect of: - Units of a Mutual Fund specified under clause (23D) of section 10; or - From the specified company referred to in the Explanation to clause (35) of section 10	-	-	20	-	20
(196B) Income from units to an offshore fund	-	-	10		10
(19B) LTCG on transfer of units of an offshore fund
(196C) Income from foreign currency bonds or GDR of an Indian company (including LTCG)	-	-	12.5		10
(196D) Income of foreign Institutional Investors from securities (not being dividend or capital gain)	-	-	20		20

Did You Know?

More than 93% of income tax returns were filed online in FY 2023–24 using e filing 2.0.

Source: The Economic Times.

TDS Slab Rates for Salaried Professionals

TDS deduction for you will happen at the slab rates if you are salaried. Starting FY 202-2, you have the option of sticking with the old income tax slabs or for the New Tax Regime.

Here are the TDS slab rates for salaried under the new regime:

Income Tax Slab	TDS Slab Rates FY 20250-26	Max. Tax in ₹
₹ 0.0 – 4 Lakhs	NIL	0
₹ 4,00,001 - 8 Lakhs	5%	2500
₹ 8,00,001 – 12 Lakhs	10 %	12,500
₹ 12,00,001 - 16 Lakhs	15 %	37,500
₹ 16,00,001 – 20 Lakhs	20 %	75,000
₹ 20,00,001 - 24 Lakhs	25 %	1,25,000
₹ 24,00,001 and above	30 %	1,87,500
> ₹ 15 Lakhs	30%	1,87,500 + 30% of income over Rs 15 lakhs

However, under the new tax regime section 87A is the only tax rebate available. All other modes of tax saving and set-off and carry forward of losses will not apply from the old regime. The tax rebate has been hiked to Rupees 60,000 and is applicable for taxable incomes of up to

Detailed Explanations of Changes to TDS in Budget for AY 2026-27

The changes in the TDS rules in the Budget for AY 2026-27 are explained below:

i. Section 206AB has been eliminated. It added compliance for TDS deductions

ii. For Section 194LBC, the TDS rate has been reduced to 10 percent. It refers to the income received from investment in scrutiny trusts for resident.

Tips to Save Tax

The only way to save tax is to increase your tax-free income. You can do so by investing your savings into life insurance plans, which give you both investment growth and tax saving.

Given below are two such tax-saving plans from Canara HSBC Life Insurance:

A. Guaranteed Income4Life Plan

If you are 40 years or above, you can start investing in annuity plans. Annuity plans help you to preserve your hard-earned wealth against inflation and taxes. After you retire these plans will help you turn your wealth into a stream of regular income.

Guaranteed Income4Life is one such plan from Canara HSBC Life Insurance:

i. Choose a plan option depending on your needs. The three options are:

Guaranteed income for a short to medium term of up to 10 years
Guaranteed long-term income of 15 or 20 years
Guaranteed retirement income for lifetime, i.e., up to 99 years

ii. Regular income payouts with flexibility to choose the period as per your needs

iii. Assured loyalty additions of up to 900% of annualised premiums

iv. Tax benefits according to applicable laws

v. Presence of death benefit/accident total and permanent disability benefit

vi. Loan facility

B. Invest 4G

This is a smart tax saving plan with several features to help you grow, preserve and distribute your money. With this plan you can:

i. Flexibility to opt for the Life, Care or Century Option

ii. Invest in a mix of equity and debt funds

iii. Use simple strategies to automatically manage your risky investment

iv. Use systematic or milestone

v. Premium funding benefits

vi. Return of Mortality Charges (ROMC)

vii. Fund additions to leverage maximum benefits, such as loyalty additions and wealth boosters

viii. Tax benefits on premiums and received benefits

So, these are some of the tax-saving retirement planning steps that can help you increase your savings for retirement.

Conclusion

Understanding the applicable TDS rates and thresholds is vital for tax compliance and financial planning. Whether you're a salaried employee or a business making payments, knowing the correct deductions helps avoid penalties. Strategic investments in tax-saving instruments can significantly lower your taxable income and enhance long-term savings.

Glossary

e filing 2.0: The advanced income tax filing platform by the government of India for simpler and quicker ITR filing.
Income Tax Slab: The structure of tax rates against various ranges of income under the New and Old tax regimes.
Section 80C: A provision of the Income Tax Act for deduction up to ₹1.5 lakh for particular investments.
ULIP: Unit Linked Insurance Plan brings insurance together with equity/debt investment.
Section 10(10D): Tax-free maturity benefits from life insurance policies, subject to specific conditions.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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Tax Savings - Top Selling Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.