TDS and TCS Rate Chart for Tax Year 2026-2027

TDS and TCS Rate Chart for Tax Year 2026-2027

The tax authority has released a Tax Deducted at Source (TDS) and Tax Collection at Source (TCS) rate chart for the Financial Year 2026-27, effective from April 1, 2026. This chart includes distinct tax deduction and collection rates applied to different categories.

Salary payments will normally be taxed as per the income tax rates. On the other hand, 10% TDS will apply to premature EPF withdrawals. Generally, 10% TDS rate is applied to interest, dividends and professional fees. TDS at a rate of 1% to 2% will be charged on contractor payments and insurance commissions.

An increased rate of 30% TDS will be applicable on income earned from lottery, online gaming and horse racing. Special TDS rates and limits have been decided for property transactions, rent, and purchase of goods, such as 1% TDS on property purchases above Rs 50 lakh. Cash withdrawals, e-commerce, virtual digital assets and non-resident payments are covered under separate provisions. Under TCS provisions, 2% TCS will be applicable on specified goods and 1% TCS on luxury goods (worth above Rs 10 lakh). Rates on foreign remittances and tour packages have been rationalised.

TDS Rate Chart

Codes to be used  in return	Old Section	Nature of Payment	TDC Section (IT ACT 2025)	Rates	threshold
1004	192	Payment of the outstanding amount deposited by the employee	392(7)	–
1005	194D	Insurance-related commission or brokerage	393(1)	Rates in force	20000
1006	194H	Other types of commission or brokerage	393(1)	2%	20,000
1008	194I(a)	Rent of machinery, etc. (paid to the prescribed person)	393(1)	2%	50,000 per month
1009	194I(b)	Rent of property other than machinery (paid to a prescribed person)	393(1)	10%	50,000 per month
1011	194IC	Cash payment as per agreement under section 67(14)	393(1)	10%	–
1012	194IA	Payment of compensation on the acquisition of certain immovable property	393(1)	1%	50 Lakh
1013	194K	Income received by a resident from units of specified mutual funds	393(1)	10%	10,000
1014	194LBA	Interest received by resident unit holders from business trust units	393(1)	10%	–
1015	194LBA	Dividend received by resident unit holders from units of a business trust	393(1)	10%	–
1017	194LBB	Income (other than exempt income) from units of investment fund (section 224)	393(1)	10%	–
1018	194LBC	Income to the investor from investment in a securitisation trust (section 221)	393(1)	10%	–
1019	193	Income in the form of interest received on securities	393(1)	Rates in force	10,000
1020	194A	Interest income other than securities, when the recipient is a senior citizen	393(1)	Rates in force	100,000
1021	194A	Interest income other than securities, when the recipient is not a senior citizen	393(1)	Rates in force	50,000
1022	194A	Interest of any kind other than securities	393(1)	Rates in force	10,000
1023	194C	Payment for the execution of any work (including supply of labour) in accordance with the contract, when the contractor is an individual or a Hindu undivided family	393(1)	1%	30,000
1024	194C	Payment for the execution of any work (including supply of labour) in accordance with the contract, when the contractor is other than an individual or a Hindu Undivided Family	393(1)	2%	100,000
1026	194J(a)	The following types of payments: (a) Fees for technical services (other than professional services), (b) Royalties relating to the sale, distribution or exhibition of cinematographic films (c) Payment to a payee engaged only in the business of call centre operations	393(1)	2%	50000
1027	194J(b)	Following types of payments: (a) Fees for professional services, (b) The amount referred to in section 26(2)(h)	393(1)	10%	50,000
1028	194J(b)	Remuneration, fees or commission paid to a director of a company (other than tax deducted under section 392)	393(1)	10%	–
1029	194	Dividend declared to resident unit holders (including preference shares)	393(1)	10%	–
1030	194DA	Amount received under a life insurance policy, including bonuses (except amounts not included in total income under Schedule II)	393(1)	2%	100,000
1031	194Q	Any amount paid in respect of the purchase of goods	393(1)	0.10%	in excess of 50 lakh
1033	194R	Any profits or facilities derived from a resident’s business or profession, whether or not convertible into cash	393(1)	10%	20,000
1034	194R	Benefits of business or profession, paid wholly in kind or partly in cash, which are not sufficient to meet the tax liability, and tax is deposited before the benefits are paid	393(1)	10%	20,000
1035	194O	Any amount paid by an e-commerce operator to an e-commerce participant in exchange for the sale of goods or services provided through its digital platform	393(1)	0.10%	–
1037	194S	Any consideration paid for the transfer of a virtual digital asset, where the payer is other than an individual or a Hindu Undivided Family (HUF)	393(1)	1%	–
1038	194SP	Any payment given in cash, kind, or a combination of the two in exchange for the transfer of a virtual digital asset	393(1)	1%	–
1058	194B	Income from winnings from lotteries, crosswords, card games, any other game, gambling or betting (except as specified)	393(3)	Rates in force	Rs. 10000 in case of a single transactions
1059	194B	Winnings from the above games or betting where payment is in kind or cash is not sufficient, and tax is paid before the winnings are awarded	393(3)	Rates in force	Rs. 10000 in case of a single transactions
1060	194BA	Income from any kind of winnings received from online games	393(3)	Rates in force	on net winnings in the user A/c of the payee at the end of the tax year
1061	194BA	Income from winnings received from online games, where the payment in kind or in cash is not sufficient to satisfy the tax liability, and the tax is paid before the winnings are released	393(3)	Rates in force	Rs. 10000 in case of a single transactions
1062	194BB	Any income by way of winnings from any horse race	393(3)	Rates in force	Rs. 10000 in case of a single transactions
1063	194G	Any income paid or accrued by way of commission, remuneration or prize (by whatever name called) on those tickets to a person connected with the stock, distribution, purchase or sale of lottery tickets	393(3)	2%	20,000
1064	194N	Any amount of specified payment made in cash to a co-operative society by a bank, post office or co-operative society	393(3)	2%	3 Crore
1065	194N	Any amount of specified payment made in cash by a bank, post office or co-operative society to a person other than the co-operative society	393(3)	2%	1 Crore
1066	194EE	Any amount referred to in section 80CCA(2)(a) of the Income Tax Act, 1961	393(3)	10%	2500
1067	194T	Any sum paid by the firm to its partner or credited to his account (including capital account) by way of salary, remuneration, commission, bonus or interest	393(3)	10%	20,000

Note: The list given above includes most of the sections applicable to domestic transactions.

Section 397(2) [Earlier Section 206CC]: 

According to this provision, every person who receives or pays any amount on which TDS (tax deducted at source) or TCS (tax collected at source) applies is required to provide their PAN (Permanent Account Number) to the individual responsible for deducting or collecting tax.

Situation of not providing PAN:

If PAN is not provided by the person concerned, tax will be deducted at source at the higher rates:

• (A) at the rate specified in the relevant provision of this Act; or
• (B) at the rate or rates in force; or
• (C) at the rate of 5% where tax is required to be deducted under section 393(1) [Table: Sl. No. 8(ii) or 8(v)]; or
  20% in any other case;

TDS Rate Chart for Foreign

Codes to be used  in return	Old Section	Nature of Payment	TDC Section (IT ACT 2025	Rates
1004	192A	Payment of the outstanding amount deposited by the employee	392(7)	10%
1039	194E	Any type of income mentioned in section 211	393(2)	20%
1040	194LC	Interest income payable relating to foreign currency loans or long-term infrastructure bonds taken between July 1, 2012 and June 30, 2023	393(2)	5%
1041	194LD	Interest income payable on amounts borrowed from abroad through rupee-denominated bonds issued before July 1, 2023	393(2)	5%
1042	194LC	Interest income payable on long-term or rupee-denominated bonds issued between April 1, 2020 and June 30, 2023, which are listed only on a recognised stock exchange of an International Financial Services Centre	393(2)	4%
1043	194LC	Interest income payable on long-term or rupee denominated bonds issued on or after July 1, 2023, which are listed only on a recognised stock exchange of an International Financial Services Centre	393(2)	9%
1044	194LB	Interest income payable to non-residents from infrastructure debt funds	393(2)	5%
1045	194LBA(a)	Distributed income referred to in section 223, falling under serial number 3. B(a) of the Table of Schedule V	393(2)	5%
1046	194LBA(b)	Distributed income referred to in section 223, falling under serial number 3. B(b) of the Table of Schedule V	393(2)	10%
1047	194LBC	Distributed income referred to in section 223 falling under serial number 4 of the Table of Schedule V	393(2)	Rates in Force
1048	194LBB	Income derived from units of investment funds specified in section 224 (other than the portion exempted under Schedule V)	393(2)	Rates in Force
1049	194LBC	Income from investments in securitization trusts referred to in section 221	393(2)	Rates in Force
1050	195	Income received from units of a mutual fund specified in Schedule VII or a specified company	393(2)	20%
1051	196B	Income received from units mentioned in section 208	393(2)	10%
1052	196B	Long-term capital gains income derived from the transfer of units referred to in section 208	393(2)	12.50%
1053	196C	Income received by way of interest or dividends from bonds or global depository receipts referred to in section 209	393(2)	10%
1054	196C	Long-term capital gains income derived from transfer of bonds or global depository receipts referred to in section 209	393(2)	12.50%
1055	196D	Income derived from securities mentioned in serial no. 1 of the Table of section 210(1)	393(2)	20%
1056	196D	Income derived from securities mentioned in serial no. 1 of the Table of section 210(1)	393(2)	10%
1057	195	Any other sum or interest payable under this Act (which is not taxable under the head salary), except the interest specified in clauses 2, 3, 4 and 5	393(2)	Rates in Force
1058	194B	Income from winnings from lotteries, crosswords, card games, any other game, gambling or betting (except as specified)	393(3)	Rates in force
1059	194B	Winnings from the above games or betting where payment is in kind or cash is not sufficient, and tax is paid before the winnings are awarded	393(3)	Rates in force
1060	194BA	Income from any kind of winnings received from online games	393(3)	Rates in force
1061	194BA	Income from winnings received from online games, where the payment in kind or in cash is not sufficient to satisfy the tax liability, and the tax is paid before the winnings are released	393(3)	Rates in force
1062	194BB	Any income by way of winnings from any horse race	393(3)	Rates in force
1063	194G	Any income paid or accrued by way of commission, remuneration or prize (by whatever name called) on those tickets to a person connected with the stock, distribution, purchase or sale of lottery tickets	393(3)	2%
1064	194N	Any amount of specified payment made in cash to a co-operative society by a bank, post office or co-operative society	393(3)	2%
1065	194N	Any amount of specified payment made in cash by a bank, post office or co-operative society to a person other than the co-operative society	393(3)	2%
1066	194EE	Any amount referred to in section 80CCA(2)(a) of the Income Tax Act, 1961	393(3)	10%
1067	194T	Any sum paid by the firm to its partner or credited to his account (including capital account) by way of salary, remuneration, commission, bonus or interest	393(3)	10%

TCS Rates Chart

Codes to be used  in return	Old Section	Nature of Payment	TDC Section (IT ACT 2025	Rates
1068	206C – A	Sale of liquor for human consumption	394(1)	2%
1069	206C – I	Sale of tendu leaves	394(1)	2%
1070	206C – B	Sale of wood obtained under a forest lease	394(1)	2%
1071	206C – C	Sale of wood obtained through means other than a forest lease	394(1)	2%
1072	206C – D	Sale of other forest produce (except wood or tendu leaves) obtained under forest lease	394(1)	2%
1073	206C – E	Sale of scrap	394(1)	2%
1074	206C – J	Sale of minerals like coal, lignite or iron ore	394(1)	2%
1075	206C – L	Sale of motor vehicles, where the selling price exceeds the prescribed limit	394(1)	1%
1076	206C – MA	Sale of wrist watches, where the selling price exceeds the prescribed limit	394(1)	1%
1077	206C – MB	Sale of art objects such as antiques, paintings or sculptures, where the selling price exceeds the prescribed limit	394(1)	1%
1078	206C – MC	The sale of collectable items, such as coins or postage stamps, where the selling price exceeds the prescribed limit	394(1)	1%
1079	206C – MD	Sale of a yacht, rowing boat, canoe or helicopter, where the sale price exceeds the prescribed limit	394(1)	1%
1080	206C – ME	Sale of pairs of sunglasses, where the selling price exceeds the prescribed limit	394(1)	1%
1081	206C – MF	Sale of bags such as handbags or purses, where the selling price exceeds the prescribed limit	394(1)	1%
1082	206C – MG	The sale of pairs of shoes, where the selling price exceeds the prescribed limit	394(1)	1%
1083	206C – MH	Sale of sports apparel or equipment, such as golf kits or ski-wear, where the selling price exceeds the prescribed limit	394(1)	1%
1084	206C – MI	Sale of home theatre systems, where the selling price exceeds the prescribed limit	394(1)	1%
1085	206C – MJ	Sale of horses for horse racing or polo in a race club, where the selling price exceeds the prescribed limit	394(1)	1%
1086	206C – T	Foreign remittance of amounts exceeding the limit under the Liberalised Remittance Scheme for the purpose of education or medical treatment	394(1)	2%
1087	206C – Q	Foreign remittance of amounts exceeding the limit under the Liberalised Remittance Scheme for purposes other than education or medical treatment	394(1)	20%
1088	206C – O	Sale of foreign travel itinerary packages, including travel, hotel, boarding, lodging or related expenses	394(1)	2%
1089	206C – O	Sale of foreign travel itinerary packages, including travel, hotel, boarding, lodging or related expenses	394(1)	2%
1090	206C – F	Right to use parking space for business, except mining of mineral oil (including petroleum and natural gas)	394(1)	2%
1091	206C – G	Right to use the toll plaza for business, except for the mining of mineral oil	394(1)	2%
1092	206C – H	The right to use a mine or quarry for business, except for the extraction of mineral oil	394(1)	2%

Note: The list above covers most of the sections applicable to domestic transactions.

Provisions (Section 397(2)/old Section 206CC):

According to this provision, every person who receives or pays any amount on which TCS (Tax Collection at Source) is applicable is required to provide their valid PAN (Permanent Account Number) to the person collecting the tax.

Situation of not providing PAN:

If PAN is not provided by the person concerned, tax will be collected (TCS) at higher rates, but not exceeding 20%:

(A) at twice the rate specified in the relevant provision of this Act; or

(B) at the rate of 5%