Complete TDS Rate Chart explained: this guide covers what Complete TDS Rate Chart means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Legal Reference
Sections 391-410 (TDS), ITA 2025 | Comprehensive TDS rate chart for Tax Year 2026-27 | All domestic TDS provisions
1. Why TDS Compliance Needs a Rate Chart
Tax Deducted at Source (TDS) operates across more than 20 different payment categories under ITA 2025, each with its own rate, threshold, and applicable section. A payment from one category cannot use another category TDS rate -- getting the section and rate wrong creates TDS defaults even if the amount deposited is correct. This comprehensive TDS rate chart for Tax Year 2026-27 covers every significant TDS provision a business or individual is likely to encounter.
2. TDS on Salary (Section 391)
Salary TDS is unique -- there is no fixed rate. TDS is deducted at the "average rate of income tax" computed on the employee estimated annual income after deductions. The employer computes the annual tax, divides by 12, and deducts monthly. No fixed threshold -- if any tax is due, TDS must be deducted on the first rupee of salary. Senior citizens are not exempt from salary TDS (only from advance tax without business income).
3. TDS on Interest (Sections 393A-393C)
| Payment Type | Section | Rate | Threshold |
|---|
| Interest on securities (debentures, bonds) | 393A | 10% | Rs 5,000/year |
| Interest other than on securities (FD, RD, savings above limit) | 393B | 10% | Rs 40,000/year (Rs 50,000 senior) |
| Interest from co-operative society or post office | 393C | 10% | Rs 40,000/year (Rs 50,000 senior) |
4. TDS on Professional and Technical Fees (Section 399)
| Payment Type | Rate | Threshold |
|---|
| Professional services (CA, doctor, lawyer, architect) | 10% | Rs 30,000/year |
| Technical services (IT, software, maintenance) | 2% | Rs 30,000/year |
| Royalty payments | 10% | Rs 30,000/year |
| Director fees (non-salary) | 10% | No threshold |
| Call centre operators | 2% | Rs 30,000/year |
5. TDS on Contractor Payments (Section 400)
| Payment Type | Rate | Threshold |
|---|
| Contractor payments (individual/HUF) | 1% | Rs 30,000 per contract or Rs 1,00,000 per year |
| Contractor payments (company/firm) | 2% | Rs 30,000 per contract or Rs 1,00,000 per year |
| Sub-contractor payments | 1% or 2% | Same as above |
6. TDS on Rent (Section 401)
| Payment Type | Rate | Threshold |
|---|
| Rent of land, building, furniture | 10% | Rs 2,40,000/year |
| Rent of plant, machinery, equipment | 2% | Rs 2,40,000/year |
| Rent paid by individual/HUF (above Rs 50,000/month) | 10% | Rs 50,000/month (under a different provision of Section 399) |
7. TDS on Winnings and Prizes
| Payment Type | Section | Rate | Threshold |
|---|
| Lottery, crossword, game show winnings | 393D | 30% | Rs 10,000/prize |
| Online gaming net winnings | 394B | 30% | No threshold (even Re 1) |
| Horse race winnings | 393E | 30% | Rs 10,000/year |
8. TDS on Sale of Property and Other Capital Transactions
| Payment Type | Section | Rate | Threshold |
|---|
| Immovable property purchase (buyer deducts) | 394 | 1% | Rs 50,00,000 (Rs 50 lakh) per property |
| Immovable property sale by NRI (buyer deducts) | 395 / Section 195 | 20% LTCG / 30% STCG | No threshold |
| Transfer of virtual digital assets (VDA) | 67B | 1% | Rs 10,000/year |
9. TDS on Dividends and Mutual Fund Distributions
| Payment Type | Section | Rate | Threshold |
|---|
| Dividend from domestic companies | 393 | 10% | Rs 5,000/year |
| Dividend/IDCW from mutual funds | 393 | 10% | Rs 5,000/year |
| Income from units of business trust (REIT/InvIT) | 393 | 10% | Rs 5,000/year |
10. TDS on Other Common Payments
| Payment Type | Section | Rate | Threshold |
|---|
| Commission/brokerage | 397 | 5% | Rs 15,000/year |
| Insurance commission | 398 | 5% | Rs 15,000/year |
| Payment to LIC agents | 398 | 5% | Rs 15,000/year |
| EPF withdrawal (before 5 years) | 392A | 10% | Rs 50,000 |
| Payment to contractors (transporters with PAN) | 400 | Nil | Exempt if PAN furnished |
| Cash withdrawal above threshold | 403 | 2% or 5% | Rs 1 crore (2%); Rs 3 crore (5%) |
11. What Happens When PAN Is Not Available
When the deductee does not furnish PAN, TDS must be deducted at the HIGHER of: the applicable TDS rate; 20%; or the rate in force. This "higher of" rule effectively creates a 20% floor for PAN non-furnishing. It applies across all TDS sections. Example: professional fees TDS is normally 10% -- without PAN, TDS becomes 20%. This is why collecting PAN from vendors, professionals, and contractors before making payments is critical.
12. TDS Deposit Due Dates
TDS must be deposited to the government within specified timelines:
- For all deductors except government: 7th of the following month (example: April TDS by 7 May)
- For March deductions: 30 April (special extension)
- Government deductors (without challan): same day of deduction; with challan: 7th of following month
- Interest for late deposit: 1.5% per month from date of deduction to date of deposit (Section 415)
4. TDS Return Due Dates
| Quarter | Period | Due Date |
|---|
| Q1 | April – June | 31st July |
| Q2 | July – September | 31st October |
| Q3 | October – December | 31st January |
| Q4 | January – March | 31st May |
7. Higher TDS for Non-Filers of ITR (Section 413)
Section 413 of ITA 2025 (equivalent to Section 206AB of ITA 1961) requires deductors to apply higher TDS rates on payments to persons who:
- Have not filed ITR for both of the two preceding Tax Years, AND
- The TDS amount in each of those years exceeded ₹50,000
For such non-filers, TDS must be deducted at twice the normal rate or 5%, whichever is higher.
8. How to Claim TDS Credit
TDS deducted by the deductor is credited to your tax account and reflected in Form 26AS and the Annual Information Statement (AIS). When you file your ITR, you claim credit for all TDS deducted. If TDS exceeds your actual tax liability, you get a refund from the Income Tax Department.
9. Penalties for TDS Default
| Default | Penalty / Interest | Section (ITA 2025) |
|---|
| Failure to deduct TDS | Interest: 1% per month from due date to deduction date | Section 416 |
| Delay in depositing after deduction | Interest: 1.5% per month from deduction date to deposit date | Section 416 |
| Failure to file TDS return | ₹200 per day (max equal to TDS amount) | Section 448 |
| Wrong information in TDS return | ₹10,000 to ₹1,00,000 | Section 449 |
| TDS not deposited (treated as assessee in default) | Equal to TDS amount as penalty + prosecution | Section 481 |
13. Why TaxClue
TDS compliance requires knowing the correct section, rate, threshold, and deposit deadline for every payment type. Errors lead to interest, expense disallowance, and penalties. TaxClue maintains TDS compliance calendars and files quarterly TDS returns for businesses. Contact us under ITA 2025.
