TDS Rates & Thresholds for Tax Year 2026-27: Practical Chart
From 1 April 2026, most non-salary TDS provisions move into Section 393 of the Income-tax Act, 2025. This practical chart covers common business payments, thresholds and rates.
From 1 April 2026, non-salary TDS provisions are reported mainly through Section 393 of the Income-tax Act, 2025. The new Act reorganises the law into tables, but the Government has clarified that the transition itself does not generally change the underlying TDS rates or monetary thresholds.
For accountants, the important practical change is therefore not merely the rate. It is using the correct new-law table reference and form for transactions whose earlier of credit or payment occurs on or after 1 April 2026.
Common TDS rates and thresholds
| Payment | Common threshold | Rate | Practical note |
|---|---|---|---|
| Contractor – payee Individual/HUF | ₹30,000 single payment / ₹1,00,000 aggregate | 1% | Old Section 194C category moves to Section 393 table reporting. |
| Contractor – other payees | ₹30,000 single payment / ₹1,00,000 aggregate | 2% | Check whether the contract falls within the statutory definition of work. |
| Professional services | ₹50,000 | 10% | Professional services and director-related payments can have different table entries. |
| Technical services / specified lower-rate service categories | ₹50,000 | 2% | Do not automatically use the professional-fee rate for every service invoice. |
| Rent – plant and machinery | ₹50,000 per month | 2% | Classification of the rented asset matters. |
| Rent – land, building, furniture or fittings | ₹50,000 per month | 10% | Separate from the special individual/HUF rent challan-cum-statement category. |
| Specified payments to partners | ₹20,000 aggregate | 10% | Covers specified remuneration, commission, bonus and interest payments to partners. |
| Purchase of immovable property | ₹50 lakh statutory threshold test | 1% | Reported through Form 141 from Tax Year 2026-27. |
| Rent by specified Individual/HUF | More than ₹50,000 per month | 2% | Form 141 Schedule A is used under the new Act. |
| Specified contractor/professional payment by Individual/HUF | More than ₹50 lakh aggregate | 2% | Form 141 Schedule C is used under the new Act. |
| Transfer of Virtual Digital Asset | Threshold depends on whether payer is a specified person | 1% | Form 141 Schedule D applies to the specified PAN-based category. |
Old section numbers should not be used blindly
For payments or credits up to 31 March 2026, the Income-tax Act, 1961 continues to apply. For a transaction whose TDS event occurs on or after 1 April 2026, the new Act applies.
For example, contractor expense credited on 31 March 2026 continues under the old Section 194C framework even if paid in April. An April 2026 contractor credit is reported under the relevant Section 393 table item.
Monthly accounting control
- Map each expense ledger to the correct TDS category.
- Check single-payment and annual thresholds separately where applicable.
- Review year-to-date vendor totals before every month-end close.
- Use the correct old-law or new-law section/table reference based on the TDS trigger date.
- Reconcile TDS payable, challans and quarterly statements.
Rates are only one part of TDS compliance. Correct classification, threshold testing, deduction timing and return mapping are equally important.