60+ Sections → Just 3
TDS Rate Chart FY 2026-27 — Sections 392, 393 & 394 Explained
The cleanest makeover in the Act. TDS was scattered across 60+ sections (192–194T). Now: 392 = salary, 393 = every other payment (with payment codes 1001–1067), 394 = TCS. Rates themselves are unchanged.
Common TDS Rates (Same Rates, New Home)
| Payment | Old Sec | New Sec | Rate | Threshold |
|---|---|---|---|---|
| Salary | 192 | 392 | As per slab (estimated) | Above basic exemption |
| Bank/FD interest | 194A | 393 (table) | 10% | ₹50k/yr (₹1L for seniors) |
| Contractor payment | 194C | 393 (table) | 1% indiv / 2% others | ₹30k single / ₹1L yearly |
| Professional fees | 194J | 393 (table) | 10% | ₹50k/yr |
| Commission/brokerage | 194H | 393 (table) | 2% | ₹20k/yr |
| Rent (individuals paying >₹50k/mo) | 194-IB | 393 (table) | 2% | ₹50,000/month |
| Property purchase (₹50L+) | 194-IA | 393 (table) | 1% | ₹50L+ |
| Crypto/VDA transfer | 194S | 393 (table) | 1% | ₹10k / ₹50k |
| E-commerce seller | 194-O | 393 (table) | 0.1% | ₹5L+ (individuals) |
| Foreign remittance (TCS, LRS) | 206C | 394 | 20% above ₹10L* / education 5% / loan-funded edu 0.5% | Varies |
*LRS TCS as per Budget 2025 rules — education/medical have special rates. Every payment type has an exact code in the CBDT payment-code table (1001–1067).
Example — How salary TDS works — the monthly math
Pooja's salary is ₹12,00,000/year (new regime — also the default).
• Employer's estimate: taxable = ₹11,25,000 → tax ₹52,500 − rebate ₹52,500 (within 12L!) = ₹0
• So her payslip shows TDS of ₹0.
Her colleague earning ₹16L: taxable ₹15.25L → tax ₹1,13,100 (with cess) → monthly TDS ≈ ₹9,425. The employer deducted it monthly under Section 392 (old 192) — payslips will now read "TDS u/s 392".
• Employer's estimate: taxable = ₹11,25,000 → tax ₹52,500 − rebate ₹52,500 (within 12L!) = ₹0
• So her payslip shows TDS of ₹0.
Her colleague earning ₹16L: taxable ₹15.25L → tax ₹1,13,100 (with cess) → monthly TDS ≈ ₹9,425. The employer deducted it monthly under Section 392 (old 192) — payslips will now read "TDS u/s 392".
Example — TDS on rent — the tenant's duty
Vivek pays his landlord ₹55,000/month (personal use).
• Above ₹50k/month → the tenant must deduct 2% TDS = ₹1,100/month (₹13,200/year).
• He transfers ₹53,900 to the landlord and deposits TDS via challan — issuing Form 16C.
• The landlord claims the ₹13,200 as credit in their ITR. If the tenant skips it, interest/penalty falls on the tenant!
• Above ₹50k/month → the tenant must deduct 2% TDS = ₹1,100/month (₹13,200/year).
• He transfers ₹53,900 to the landlord and deposits TDS via challan — issuing Form 16C.
• The landlord claims the ₹13,200 as credit in their ITR. If the tenant skips it, interest/penalty falls on the tenant!
- TDS = an advance part of your tax — the final settlement happens in the ITR; excess cut → refund
- Check your TDS credits in the AIS / Form 168 (the new avatar of 26AS) — mismatches invite notices
- No PAN given? TDS jumps to 20% or the notified higher rate. Sharing PAN is always cheaper
- Form 15G/15H (to stop TDS when income isn't taxable) continues unchanged
- Each payment type now has a payment code — CAs will increasingly cite codes instead of '194C'
Our take ✍️
TDS is not your tax — it's advance tax wearing a costume. Match every entry with 26AS/AIS before filing (10 minutes, saves notices), file 15G/15H in APRIL not March, and keep PAN updated everywhere — 20% TDS without PAN is the system's way of shouting at you.
📌 Remember: the ₹50,000/month rent tripwire
Individual paying rent above ₹50,000/month? YOU must deduct 2% TDS (393 Table Sl.2, old 194-IB) via Form 26QC — no TAN needed, once a year works. Below ₹50k? Zero TDS duty as an individual (companies deduct regardless via 194-I). This single threshold decides whether you're a 'deductor' with compliance or just a tenant with a UTR number. Paying ₹55k and skipping 26QC is the commonest individual-TDS default we see.
⚖️ Legal footing: Chapter XVII-B + 206AA
TDS machinery is Chapter XVII-B (192 → 206): deduction sections (192 salary, 194-series payments), Sec 200 (deposit duty), Sec 203 (certificates 16/16A). Two teeth: 206AA (20% TDS without PAN — no threshold escape) and 234E (₹200/day for late statements). In 2025-Act paperwork these cuts map to the Sec 392/393 TDS tables — quote both numbers during transition.
New numbers: 392/393 guide →
By TaxSetu Editorial Team · Last reviewed: 7 October 2026
Based on the Income-tax Act 2025, Income Tax Rules 2026 and CBDT notifications; sections per the Income-tax Act 1961 (as amended) with 2025-Act mappings where notified · Verify on the official portal: incometax.gov.in
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