TDS & TCS Rate Chart 2026-27
Rates and thresholds for payments to residents under the Income-tax Act, 2025 — with the old section number beside each, and a calculator for a single payment.
TDS / TCS on one payment
Result
₹2,000
TDS at 2% · section 393 (old 194C)
Threshold: ₹30,000 per contract or ₹1,00,000 in a year.
| Nature of payment | Section (old) | Rate | Threshold |
|---|---|---|---|
| Salary | 392 (192) | Average rate of income tax | Income above the exemption limit |
| Payment to contractors and sub-contractors (including job work) | 393 (194C) | 1% (individual/HUF) · 2% (others) | ₹30,000 per contract or ₹1,00,000 in a year |
| Fees for professional services | 393 (194J) | 10% | ₹50,000 in a year |
| Fees for technical services | 393 (194J) | 2% | ₹50,000 in a year |
| Commission or brokerage | 393 (194H) | 2% | ₹20,000 in a year |
| Rent of land, building or furniture | 393 (194-I) | 10% | ₹50,000 per month |
| Rent of plant, machinery or equipment | 393 (194-I) | 2% | ₹50,000 per month |
| Rent paid by individuals / HUFs not liable to tax audit | 393 (194-IB) | 2% | ₹50,000 per month |
| Purchase of goods (buyer's turnover above ₹10 crore) | 393 (194Q) | 0.1% | Purchases above ₹50 lakh from a seller in a year |
| Purchase of immovable property (other than agricultural land) | 393 (194-IA) | 1% | Consideration of ₹50 lakh or more |
| Benefits or perquisites of a business or profession | 393 (194R) | 10% | ₹20,000 in a year |
| Interest by banks, co-operative banks and post office | 393 (194A) | 10% | ₹50,000 in a year (₹1,00,000 for senior citizens) |
| Interest other than on securities, paid by others | 393 (194A) | 10% | ₹10,000 in a year |
| Interest on securities | 393 (193) | 10% | ₹10,000 in a year |
Payments to residents, Income-tax Act, 2025, from 1 April 2026. Reviewed October 2026. A higher rate applies when the payee has no PAN. Confirm on the income tax portal before filing.
From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act. TDS items now sit in one table in section 393 (salary in section 392) and TCS items in section 394. The rates for most business payments carried over; the section numbers changed.
TDS stands for Tax Deducted at Source — the payer deducts tax from the payment. TCS stands for Tax Collected at Source — the seller collects tax on top of the sale price.
TDS a manufacturer deducts most often
Contractors and job workers: 1% for individuals and HUFs, 2% for others, once a single bill crosses ₹30,000 or the year's total crosses ₹1,00,000. Professional fees 10% and technical fees 2% above ₹50,000 a year. Commission 2% above ₹20,000. Rent of plant and machinery 2% and of buildings 10% above ₹50,000 a month. Purchase of goods 0.1% on purchases from a seller above ₹50 lakh in the year, for buyers with turnover above ₹10 crore.
TCS on sales
Sellers collect 2% TCS on scrap, coal, lignite and iron ore, liquor, timber, tendu leaves and on parking, toll and mining leases, and 1% on motor vehicles above ₹10 lakh. Foreign remittances above ₹10 lakh a year attract 2% (education, medical) or 20% (other purposes).
If the payee has no PAN
TDS and TCS are charged at a higher rate when the payee does not furnish a PAN. Collect the PAN in the vendor or customer master before the first payment.
Questions people ask.
What is the full form of TDS and TCS?
TDS is Tax Deducted at Source; TCS is Tax Collected at Source.
Which section covers TDS under the Income-tax Act, 2025?
Section 393 for most payments and section 392 for salary. TCS is in section 394. The Act applies from 1 April 2026.
What is the TDS rate on payments to contractors in 2026-27?
1% for individuals and HUFs and 2% for others, when a single payment exceeds ₹30,000 or the year's total exceeds ₹1,00,000 (old section 194C).
What replaced section 194Q?
The same TDS on purchase of goods — 0.1% on purchases above ₹50 lakh from one seller, by a buyer with turnover above ₹10 crore — now sits in section 393.
What is the TCS rate on scrap in 2026-27?
2%, up from 1%, under section 394 (old section 206C(1)).
Are the old section numbers still used?
For payments up to 31 March 2026, yes. From 1 April 2026, returns and certificates use the new Act's sections; most charts show both.
Other free tools
Doing this for every item, every day?
A calculator is the right tool once. When it is every item in the store, it belongs in the system that already knows the numbers.