TDS Rate Chart TY 2026-27 with Codes | New Income-tax Act 2025
From 1 April 2026, the new Income-tax Act, 2025 applies for Tax Year (TY) 2026-27. One of the most important practical changes for businesses, accountants, payroll teams, and finance users is the restructuring of TDS provisions.
Earlier sections such as 194A, 194C, 194H, 194I, 194J, 194Q and several others are now largely reorganised under the new framework, primarily under:
- Section 392 – TDS on Salary
- Section 393 – TDS on Payments Other Than Salary
- Section 394 – Tax Collected at Source (TCS)
For many users, the most important requirement is not only the rate – but also the payment code, old section reference, and updated mapping for filings and software setup.
This guide is designed to be a practical working reference.
Quick TDS Reference Table TY 2026-27 – Most Used Sections
| Nature of Payment | Old Section | Code | Threshold | Rate |
|---|---|---|---|---|
| Contractor – Individual/HUF | 194C | 1023 | ₹30,000 single / ₹1,00,000 aggregate | 1% |
| Contractor – Others | 194C | 1024 | ₹30,000 single / ₹1,00,000 aggregate | 2% |
| Professional Fees | 194J(b) | 1027 | ₹50,000 | 10% |
| Technical Services | 194J(a) | 1026 | ₹50,000 | 2% |
| Commission / Brokerage | 194H | 1006 | ₹20,000 | 2% |
| Interest (Bank Cases) | 194A | 1020 / 1021 | Category based | 10% |
| Rent – Building | 194I | 1009 | Applicable threshold | 10% |
| Rent – Machinery | 194I | 1008 | Applicable threshold | 2% |
| Purchase of Goods | 194Q | 1031 | Turnover + purchase limits | 0.1% |
| E-commerce | 194O | 1035 | Applicable threshold | 1% |
TDS Rate Chart TY 2026-27 :: What Changed in TY 2026-27?
The key shift is that users now need to focus on:
- New sections instead of legacy references
- Payment codes for filing utilities
- Updated software masters
- Correct mapping in returns
- Revised compliance workflows
Businesses that continue using outdated internal references may face avoidable errors.
Master TDS Rate Chart TY 2026-27 and Reference Table
| Old Section | Nature of Payment | New Section | Table Sl. No. | Code | Threshold | Rate |
|---|---|---|---|---|---|---|
| 192 | Salary | 392 | 1 | – | Based on taxable salary income | Slab Based |
| 192A | EPF Withdrawal | 392(7) | – | 1004 | ₹50,000 | 10% |
| 194D | Insurance Commission | 393(1) | 1(i) | 1005 | Applicable threshold | Applicable |
| 194H | Commission / Brokerage | 393(1) | 1(ii) | 1006 | ₹20,000 | 2% |
| 194I | Rent – Machinery / Plant / Equipment | 393(1) | 2(ii)D(a) | 1008 | Applicable threshold | 2% |
| 194I | Rent – Land / Building / Furniture | 393(1) | 2(ii)D(b) | 1009 | Applicable threshold | 10% |
| 194IC | Joint Development Agreement | 393(1) | 3(ii) | 1011 | As applicable | 10% |
| 194LA | Acquisition Compensation | 393(1) | 3(iii) | 1012 | ₹5,00,000 | 10% |
| 194K | Mutual Fund / Unit Income | 393(1) | 4(i) | 1013 | ₹10,000 | 10% |
| 194LBA | Business Trust – Interest | 393(1) | 4(ii) | 1014 | As applicable | Applicable |
| 194LBA | Business Trust – Dividend | 393(1) | 4(ii) | 1015 | As applicable | Applicable |
| 194LBA | REIT Rental Distribution | 393(1) | 4(ii) | 1016 | As applicable | Applicable |
| 194LBB | Investment Fund Income | 393(1) | 4(iii) | 1017 | As applicable | Applicable |
| 194LBC | Securitisation Trust Income | 393(1) | 4(iv) | 1018 | As applicable | Applicable |
| 193 | Interest on Securities | 393(1) | 5(i) | 1019 | Applicable threshold | 10% |
| 194A | Interest – Senior Citizen | 393(1) | 5(ii)D(a) | 1020 | ₹1,00,000 | 10% |
| 194A | Interest – Others | 393(1) | 5(ii)D(b) | 1021 | ₹50,000 | 10% |
| 194A | Other Interest Cases | 393(1) | 5(iii) | 1022 | ₹10,000 | 10% |
| 194C | Contractor – Individual / HUF | 393(1) | 6(i)D(a) | 1023 | ₹30,000 single / ₹1,00,000 aggregate | 1% |
| 194C | Contractor – Others | 393(1) | 6(i)D(b) | 1024 | ₹30,000 single / ₹1,00,000 aggregate | 2% |
| 194J(a) | Technical Services / Royalty / Call Centre | 393(1) | 6(iii)D(a) | 1026 | ₹50,000 | 2% |
| 194J(b) | Professional Services | 393(1) | 6(iii)D(b) | 1027 | ₹50,000 | 10% |
| 194J | Director Fees / Commission | 393(1) | 6(iii)D(b) | 1028 | Generally no standard threshold | Applicable |
| 194 | Dividend | 393(1) | 7 | 1029 | ₹10,000 | 10% |
| 194DA | Life Insurance Payout (Taxable Cases) | 393(1) | 8(i) | 1030 | ₹1,00,000 | 2% |
| 194Q | Purchase of Goods | 393(1) | 8(ii) | 1031 | Buyer turnover > ₹10 crore + purchases > ₹50 lakh | 0.1% |
| 194R | Benefit / Perquisite | 393(1) | 8(iv) | 1033 | ₹20,000 | 10% |
| 194O | E-commerce Transactions | 393(1) | 8(v) | 1035 | Applicable threshold | 1% |
| 194S | Virtual Digital Asset Transfer | 393(1) | 8(vi) | 1037 | Category based | 1% |
| 194B | Lottery / Game Winnings | 393(3) | 1 | 1058 | ₹10,000 | 30% |
| 194BA | Online Gaming Winnings | 393(3) | 2 | 1060 | As applicable | 30% |
| 194BB | Horse Race Winnings | 393(3) | 3 | 1062 | ₹10,000 | 30% |
| 194G | Lottery Commission | 393(3) | 4 | 1063 | ₹20,000 | 2% |
| 194N | Cash Withdrawal | 393(3) | 5 | 1064 / 1065 | Depends on filer status | Applicable |
| 194T | Partner Payment by Firm | 393(3) | 7 | 1067 | As applicable | Applicable |
TDS Rate Chart TY 2026-27 :: Why Threshold Is Important
Many businesses focus only on the rate, but in practice the first question is often:
Does TDS apply at all?
That usually depends on whether the payment crosses the relevant threshold. Correct threshold review can prevent unnecessary deductions or missed compliance.
Why Codes Matter
Many accountants and finance teams work using codes rather than section names during:
- return preparation
- utility filing
- ERP setup
- reconciliation
- default correction work
Examples often searched:
- 1023
- 1024
- 1026
- 1027
Using the wrong code may create mismatch or reporting issues.
TDS Rate Chart TY 2026-27 :: Old Section vs New Section Mapping
| Earlier Section | Common Use | New Reference |
|---|---|---|
| 192 | Salary | 392 |
| 194A | Interest | 393 |
| 194C | Contractors | 393 |
| 194H | Commission | 393 |
| 194I | Rent | 393 |
| 194J | Professional / Technical | 393 |
| 194Q | Purchase of Goods | 393 |
| 195 | Non-Resident Payments | 393(2) |
Important Practical Notes
1. PAN Not Available
Higher deduction rates may apply where valid PAN is unavailable.
2. Threshold Review Should Be Annual
Some thresholds are payment based, some annual aggregate based.
3. Non-Resident Cases Need Care
DTAA, surcharge, cess, PE exposure, and documentation may matter.
4. Software Masters Must Be Updated
Older ERP/Tally/custom masters may still show legacy sections.
5. Correct Classification Matters
Wrong nature selection can lead to notices even if tax amount is correct.
Updated Return Form References in TDS Rate Chart TY 2026-27
| Earlier Form | Updated Form |
|---|---|
| 24Q | 138 |
| 26Q | 140 |
| 27Q | 144 |
| 27EQ | 143 |
| Form 16 | 130 |
| Form 16A | 131 |
TDS Rate Chart TY 2026-27 :: Who Should Review This Page?
This guide is useful for:
- Private Limited Companies
- LLPs
- SMEs
- Payroll Teams
- Finance Managers
- Outsourced Accounting Teams
- Real Estate Groups
- Businesses making regular vendor payments
TDS Rate Chart TY 2026-27 :: How Our Team Helps Businesses
We assist with:
- TDS applicability review
- New section mapping under Income-tax Act, 2025
- Accounting software / ERP setup
- Monthly TDS workings
- Return filing support
- Default notice reconciliation
- Finance process improvements
Frequently Asked Questions
Is TY 2026-27 the first year under the new Income-tax Act, 2025?
Yes, TY 2026-27 begins from 1 April 2026 under the new framework.
Is old section 194J still commonly referred to?
Yes, many users still search legacy sections, though current mappings should be reviewed under the new Act.
What is code 1027?
It is commonly associated with old 194J(b) style professional fee references.
Why are thresholds important in TDS?
Thresholds often determine whether deduction is required at all.
What is code 1023?
Code 1023 is commonly used for contractor payments where payee is Individual / HUF.
What is the TDS rate on professional fees in TY 2026-27?
Generally 10%, subject to threshold and applicable law.
What is the threshold for contractor payments?
₹30,000 single payment or ₹1,00,000 aggregate, subject to applicable provisions.
Do I need to update accounting software for new TDS sections?
Yes. Businesses should review masters, mappings, reports, and compliance processes.
Final Thoughts
For TY 2026-27, the biggest risk may not be the TDS rate itself – it may be outdated references, ignored thresholds, wrong codes, or legacy software mappings.
Businesses that proactively review systems, train teams, and classify payments correctly are likely to face fewer compliance issues.
Need Help with TDS Setup or Monthly Compliance or with the TDS Rate Chart TY 2026-27?
If your team needs support with new section mapping, ERP setup, or accurate TDS filings, our team can help streamline the transition and reduce compliance errors.