TDS Provisions for Tax Year 2026-27

TDS laws are covered under section 393 of Income Tax Act 2025. Rates are given in below table:

 

S.No. Head (Nature of Payment) Rate of TDS Cut Off Amount
1. Salary Average Rate No TDS if amount paid does not exceed taxable income (after taking into consideration other incomes, losses and deduction under chapter VIA (80Cto 80U) and rebates as per details furnished by employee.)
2. Interest on securities 10% Rs. 10000
3. Income by way of dividend 10% Nil
4. Interest other than interest on securities 10% a) Rs. 50000/- If interest on Time Deposit paid by bank, co-operative society, or on a post office deposit.

b) If payee is senior citizen, then limit would be Rs. 100000-/.

c) Rs. 10000 in any other case
5. Contractors/Sub Contractors 1% if paid to Individual/HUF 2% if paid to person other than individual/HUF a) Rs.30000/- in single transaction.
OR
b) Rs.100000/- during the tax year.
6. Commission /Brokerage 2% Rs.20,000 /-
7. Rent 2% for use of Plant / Machinery/Equipment
10% for use of any Land/Building/Furniture /Fitting		 Rs. 50000/- for a month or part of a month
8. Transfer of Immovable property other than Agriculture Land 1% Rs.50 lacs/-(limit is property -wise and not transferee- wise)
9. Professional Fees/Technical Services 2% for Technical Services, and 10% for professional services a) Rs. 50000/- in case of Professional Fees, Royalty, Technical Fees, Non-compete fees
b) No limit for Director’s fees.
10. Payment for purchase of goods of the aggregate value exceeding Rs. 50 lakhs

 

 0.1% TDS is deductible on sum exceeding Rs. 50 lakhs only if Gross Turnover of Buyer exceeds Rs. 10 crores during tax year.

 

Other points to consider

  1.  If a person is employed with more than two employers during the tax year, he may furnish the particulars of income and TDS to the employer of his choice.
  2. In case of salary TDS will be deducted at time of payment but in other cases TDS will be deducted at the time of credit or payment whichever is earlier.
  3. No requirement of TAN for buyer u/s 194IA.He will deposit TDS through form 26 QB i.e. challan-cum- statement electronically within 30th day from the end of month in which TDS is deducted.
    Buyer will issue TDS certificate 16B to the seller within 15 days from the due date of deposit of TDS i.e. 15th day of month.
  4. Individual and HUF will be liable to deduct TDS u/s 194A/194C/194H/194I/194J only when they have turnover from business of more than Rs. 1 Crore or gross receipts from profession of more than Rs. 50 Lakhs in the year immediately preceding financial year.
  5.  In all above cases if deductee does not provide PAN to the deductor TDS has to be deducted @ 20% or rate in force whichever is high.
  6. TDS will not be deducted in case of a transport contractor (who is under the business of plying, hiring, or leasing goods carriages) where such contractor owns ten or less goods carriages at any time during the tax year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum.
  7.  U/s 194C & 194I TDS is deductible on gross consideration i.e. excluding GST.
  8. TDS certificate should be issued within 15 days from the last date of filing of TDS return. In case of Form 16, the TDS Certificate should be issued by 31st May.

Applicability of Surcharge/ Cess on TDS

Type of Deductee Amount (Rs.) Old Tax Regime New Tax Regime
Non Corporate Up to Rs. 50 Lakhs Nil Nil
above Rs. 50 Lakhs – Up to Rs. 1 crore 10% 10%
above Rs. 1 crore– Up to Rs. 2 crore 15% 15%
above Rs. 2 crore– Up to Rs. 5 crore 25% 25%
above Rs. 5 crore 37% 25%
  Corporate Up to 1 crore Nil
above Rs. 1 crore– Up to Rs. 10 crore 7%
above Rs. 10 crore 12%
  • For limit of Surcharge on net income (Taxable Income after taking deductions) to be check.
  • Health and Education cess @ 4% shall also be paid on the amount of income tax plus surcharge (if any).

Time limit for filing TDS returns and issuance of Form 16/16A:

 Quarter  Quarter ended  Due date for filing of TDS return Due date for issuance of Form 16A
 I  30 June  31 July  15 August
 II  30 September  31 October  15 November
 III  31 December  31 January  15 February
 IV  31 March  31 May  15 June