The Government has introduced a comprehensive TDS (Tax Deducted at Source) framework effective from April 1, 2026, under the revamped Income Tax Act, 2025. The new regime consolidates multiple earlier provisions into simplified sections, primarily Section 392 (salary) and Section 393 (payments to residents), along with separate provisions for non-residents.
The updated TDS structure aims to reduce complexity, rationalize compliance, and maintain largely unchanged tax rates, while introducing certain new provisions such as TDS on partner payments.
PART A: TDS on Payments to Residents
| Old Sec | New Sec | Nature of Payment | Deductor | Threshold Limit | TDS Rate | Key Notes |
| 192 | 392(1–6) | Salary | Employer | Basic exemption | Slab rate | Based on estimated income |
| 192A | 392(7) | EPF withdrawal | Any person | ₹50,000 | 10% | If taxable |
| 193 | 393 | Interest on securities | Any | ₹10,000 | 10% | Listed debentures exempt |
| 194 | 393 | Dividend | Company | ₹10,000 | 10% | |
| 194A | 393 | Interest other than securities | Bank/PO/others | ₹50,000 (senior) / ₹10,000 | 10% | |
| 194B | 393 | Lottery winnings | Any | ₹10,000 | 30% | |
| 194BA | 393 | Online gaming winnings | Any | Nil | 30% | |
| 194BB | 393 | Horse race winnings | Any | ₹10,000 | 30% | |
| 194C | 393 | Contractor payments | Any | ₹30,000 / ₹1,00,000 | 1% / 2% | Individual/HUF vs others |
| 194D | 393 | Insurance commission | Any | ₹20,000 | 2% / 10% | |
| 194DA | 393 | Life insurance payout | Insurer | ₹1,00,000 | 2% | |
| 194G | 393 | Lottery commission | Any | ₹20,000 | 2% | |
| 194H | 393 | Commission/Brokerage | Any | ₹20,000 | 2% | |
| 194J | 393 | Professional/technical fees | Any | ₹50,000 | 2% / 10% | |
| 194I | 393 | Rent | Any | ₹50,000 | 2% / 10% | |
| 194IA | 393 | Immovable property | Buyer | ₹50 lakh | 1% | |
| 194IB | 393 | Rent by individual | Individual/HUF | ₹50,000/month | 2% | |
| 194IC | 393 | JDA payments | Developer | Nil | 10% | |
| 194K | 393 | Mutual fund income | Any | ₹10,000 | 10% | |
| 194LA | 393 | Land acquisition compensation | Any | ₹5 lakh | 10% | |
| 194M | 393 | Payment by individual/HUF | Individual/HUF | ₹50 lakh | 2% | |
| 194N | 393 | Cash withdrawal | Bank | ₹1 crore | 2% / 5% | Higher for non-filers |
| 194O | 393 | E-commerce transactions | Operator | ₹5 lakh | 0.1% / 1% | |
| 194Q | 393 | Purchase of goods | Buyer | ₹50 lakh | 0.1% | |
| 194S | 393 | Virtual digital assets | Any | ₹10k/₹50k | 1% | |
| 194T | 393 | Partner payments | Firm | ₹20,000 | 10% | New section |
Most rates remain between 0.1% to 10%, with higher rates for winnings (30%).
PART B: TDS on Payments to Non-Residents
| Section | Nature of Payment | Payee | TDS Rate | Remarks |
| 192 | Salary | Individual | Slab rate | |
| 192A | EPF withdrawal | Individual | 10% | |
| 194B/BA/BB | Lottery, gaming, horse race | Any | 30% | |
| 194E | Sports income | Non-resident | 20% | |
| 194EE | NSS deposits | Individual | 10% | |
| 194F | Mutual fund repurchase | Individual | 20% | |
| 194LB | Infra debt fund interest | NRI | 5% | |
| 194LBA | Business trust income | NRI | 5–30% | |
| 194LBB | Investment fund income | NRI | 30% | |
| 194LBC | Securitisation trust | NRI | 30% | |
| 194LC | Foreign borrowings | NRI | 4% / 9% | |
| 195 | Other payments | Non-resident | 20% | DTAA applicable |
| 196A/B/C | Units & capital gains | NRI | 20–30% |
Rates may vary based on DTAA benefits and surcharge applicability.
PART C: Key Compliance Parameters & Due Dates
| Compliance Requirement | Due Date / Rule |
| TDS Deduction | At time of payment/credit |
| TDS Deposit | 7th of next month |
| March Deposit | 30th April |
| Quarterly Returns | 31 July / 31 Oct / 31 Jan / 31 May |
| TDS Certificates (Form 16/16A) | Within prescribed timelines |
| PAN Requirement | Mandatory for lower rate |
| Higher TDS (non-filers) | Removed under new regime |
PART D: Important Notes
- Old provisions under Sections 192–206AB are now replaced by Sections 392–393.
- Higher TDS for non-filers removed, simplifying compliance.Â
- Senior citizen interest threshold increased to ₹1,00,000.
- Partner remuneration now subject to TDS (Section 194T).
- TDS continues on virtual digital assets and e-commerce transactions.
- Buyer can deduct TDS on property purchases using PAN (no TAN required).
Conclusion
The TDS Rate Chart for FY 2026–27 reflects a major structural simplification rather than drastic rate changes. By consolidating sections and maintaining familiar thresholds, the government has aimed to reduce litigation and improve ease of compliance.
For taxpayers and professionals, the focus now shifts from understanding multiple sections to efficient tracking, timely deduction, and accurate filing under the streamlined system.
Read More: No Fresh Notice u/s 143(2) Required In Set-Aside Revision Proceedings: ITAT
