the income tax act, 2025 started from april 1, 2026. it changed how tds and tcs rates are organized. old sections like 194c and 206c are now sections 392, 393, and 394.
rates mostly stayed the same. section numbers changed. reporting codes changed.
official government source
the income tax department’s website is the most reliable source. they publish updated tds rate charts for each financial year.
under the “tds rates” section, the complete list is available. this is the primary source. all other references should match this.
key tds rates for fy 2026-27
here are the most common tds rates and their thresholds.
interest payments.
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interest on securities: 10%. threshold ₹10,000.
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dividends: 10%. threshold ₹10,000 for individuals.
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interest for senior citizens: 10%. threshold ₹1,00,000.
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interest for others: 10%. threshold ₹50,000.
contract and rent payments.
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contract payments for individuals/huf: 1%. threshold ₹30,000 per contract or ₹1,00,000 aggregate.
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contract payments for others: 2%. threshold ₹30,000 per contract or ₹1,00,000 aggregate.
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rent for plant and machinery: 2%. threshold ₹50,000 per month.
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rent for land, building, furniture: 10%. threshold ₹50,000 per month.
professional and other payments
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professional services: 10%. threshold ₹50,000.
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technical services: 2%. threshold ₹50,000.
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commission or brokerage: 2%. threshold ₹20,000.
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purchase of goods: 0.1%. threshold ₹50 lakh.
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virtual digital assets: 1%. threshold ₹10,000.
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lottery, gaming, horse race: 30%. threshold ₹10,000 per transaction.
key tcs rates for fy 2026-27
tcs rates also changed. the reduction in rates for foreign remittances under lrs is notable.
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sale of scrap, timber, liquor: 2%. no threshold.
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sale of motor vehicle: 1%. threshold above ₹10 lakh.
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luxury goods: 1%. threshold above ₹10 lakh.
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lrs – education/medical: 2%. threshold above ₹10 lakh.
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lrs – other purposes: 20%. threshold above ₹10 lakh.
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overseas tour package: 2%. no threshold.
forms and reporting codes
the new act introduced code-based reporting.
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payment code 1031 for purchase of goods (old section 194q)
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payment code 1036 for e-commerce transactions (old section 194o)
these codes must be used when filing tds returns.
other useful sources
managed by the income tax department. used for filing tds and tcs returns. also for checking challan status.
private portals. taxguru and other professional tax sites publish updated rate charts. useful for understanding changes. always cross-check with the official source.
FAQs
1. what is the deadline for filing tds returns
quarterly. due dates specified by the income tax department. refer to the official website for the current financial year.
2. what is the penalty for late filing of tds return
late filing fees and interest apply. exact amount depends on the delay. refer to section 234e and related provisions.
3. where can tds rates for non-residents be found
treaty rates may apply. the income tax department website provides rates for non-residents. check the specific dtaa for reduced rates.
4. what is the tcs rate on foreign remittances for education
2% on the amount exceeding ₹10 lakh, effective from april 1, 2026. no tcs on the first ₹10 lakh. if funded by an education loan, tcs is nil.
5. what is the tds rate on purchase of goods
0.1% when the purchase value exceeds ₹50 lakh in a financial year.
