TDS Rate Chart under Section 393 of the Income-tax Act, 2025: Rates and Thresholds for Payments to Residents (Tax Year 2026-27)
CA Meet Dhrangadhariya 
August 9, 2026
CA Meet Dhrangadhariya August 9, 2026
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Last updated: 02 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP
Quick summary
Tax Deducted at Source (TDS) is tax that the payer deducts when paying certain income. In the Income-tax Act, 2025 (from 01/04/2026), the sections 192 to 206AA of the old Act are gathered in Chapter XIX-B. Section 392 covers salary, and section 393(1) has one table for payments to residents. This post gives that table, with the old section numbers for reference.
| Table item | Payment | Old section | Rate | Threshold |
|---|---|---|---|---|
| 1(i) | Insurance commission | 194D | Rates in force (2% for a resident other than a company, per the Finance Act) | ₹20,000 |
| 1(ii) | Commission or brokerage (other than insurance) by a specified person | 194H | 2% | ₹20,000 |
| 2(i) | Rent by a person who is not a specified person | 194-IB | 2% | ₹50,000 for a month or part of a month |
| 2(ii) | Rent by a specified person | 194-I | 2% for machinery, plant or equipment; 10% for land, building, furniture or fittings | ₹50,000 for a month or part of a month |
| 3(i) | Consideration for transfer of immovable property (other than agricultural land) | 194-IA | 1% of the higher of consideration or stamp duty value | ₹50 lakh (on consideration or stamp duty value) |
| 3(ii) | Consideration (not in kind) under a joint development agreement under section 67(14) | 194-IC | 10% | Nil |
| 3(iii) | Compensation or consideration for compulsory acquisition of immovable property (other than agricultural land) | 194LA | 10% | ₹5,00,000 |
| 4(i) | Income in respect of units of specified mutual funds and the specified undertaking or company | 194K | 10% | ₹10,000 |
| 4(ii) to (iv) | Business trust, investment fund and securitisation trust income to unitholders and investors | 194LBA, 194LBB, 194LBC | 10% | Nil |
| 5(i) | Interest on securities | 193 | Rates in force (10%) | ₹10,000 |
| 5(ii) | Interest (other than on securities) by a bank, co-operative bank or post office | 194A | Rates in force (10%) | ₹1,00,000 for a senior citizen; ₹50,000 for others |
| 5(iii) | Interest (other than on securities) by other specified persons | 194A | Rates in force (10%) | ₹10,000 |
| 6(i) | Contract work, including supply of labour, by a designated person | 194C | 1% (individual or HUF contractor); 2% (others) | ₹30,000 per sum; ₹1,00,000 in aggregate |
| 6(ii) | Contract work, professional fees, commission or brokerage by an individual or HUF who is not a specified person | 194M | 2% | ₹50 lakh |
| 6(iii) | Fees for professional services, technical services, director’s remuneration not taxed as salary, royalty and certain other sums by a specified person | 194J | 10%; 2% for technical services (not professional), film royalty and call centres | ₹50,000 (nil for director fees) |
| 7 | Dividend declared by a domestic company | 194 | 10% | Nil |
| 8(i) | Sum under a life insurance policy (including bonus) not exempt | 194DA | 2% of the income in the sum | ₹1,00,000 |
| 8(ii) | Purchase of goods by a buyer, on the sum exceeding ₹50 lakh | 194Q | 0.1% | As per Note 1 (₹50 lakh) |
| 8(iii) | Total income of a specified senior citizen (75 or more with pension and interest from the same bank) by a specified bank | 194P | Rates in force | As applicable |
| 8(iv) | Benefit or perquisite from business or profession of a resident, by a specified person | 194R | 10% of the value | ₹20,000 |
| 8(v) | Sale of goods or services by an e-commerce participant, by an e-commerce operator | 194O | 0.1% of the gross amount | Nil |
| 8(vi) | Consideration for transfer of a virtual digital asset | 194S | 1% | Nil |
| Table item | Payment | Old section | Rate | Threshold |
|---|---|---|---|---|
| 1 | Winnings from a lottery, crossword puzzle, card game, gambling or betting | 194B | Rates in force (30%) | ₹10,000 in a single transaction |
| 2 | Net winnings from an online game | 194BA | Rates in force (30%) | As per Note 1 (net winnings in the user account) |
| 3 | Winnings from a horse race by a bookmaker or licence holder | 194BB | Rates in force (30%) | ₹10,000 in a single transaction |
| 4 | Commission, remuneration or prize on lottery tickets | 194G | 2% | ₹20,000 |
| 5 | Cash withdrawal from accounts by a banking company, co-operative bank or post office | 194N | 2% | ₹1 crore (₹3 crore for a co-operative society recipient) |
| 6 | Amount under the scheme for deposit-linked section 80CCA(2)(a) | 194EE | 10% | ₹2,500 |
| 7 | Salary, remuneration, commission, bonus or interest paid to a partner by a firm | 194T | 10% | ₹20,000 |
Part II of the First Schedule to the Finance Act 2026 gives, for a person other than a company who is resident in India: 10% on interest other than interest on securities, 30% on winnings from lotteries, puzzles, card games and other games (other than online games), horse races and net winnings from online games, 2% on insurance commission, 10% on interest on listed debentures, local authority and government securities, and 10% on any other income. For a domestic company, the rate is 10% on interest and on any other income, and 30% on winnings.
We handle TDS compliance for businesses and employers, including rate checks, deposit, statements, certificates and notices. Please reach out to our team and we will be happy to assist.
In Chapter XIX-B. Section 392 deals with salary, section 393(1) with payments to residents (the table in this post), section 393(2) with payments to non-residents, section 393(3) with payments to any person (winnings, cash withdrawals, payments to partners and similar), section 393(4) to (9) with no-deduction cases, declarations and lower deduction, and sections 394 and 395 and later with collection, certificates and statements.
Section 393(1) Table Sl. No. 5 says the rate for interest is “rates in force”. For the tax year 2026-27 Part II of the First Schedule to the Finance Act 2026 fixes it at 10% for a resident other than a company (interest other than interest on securities and interest on listed debentures, local authority securities and government securities, which are also 10%) and 10% for a domestic company.
Any person other than an individual or HUF, and an individual or HUF whose total sales, gross receipts or turnover from business exceed ₹1 crore (or ₹50 lakh for profession) in the preceding tax year (section 2(37)). An individual or HUF below those limits is not a “specified person”.
Contractors: ₹30,000 for a single payment or ₹1,00,000 in aggregate, at 1% (individual or HUF contractor) or 2% (others), when a designated person pays (Sl. No. 6(i)). Fees for professional services, technical services, royalty and director fees by a specified person: ₹50,000 (nil for director fees), at 10%, or 2% for technical services that are not professional services, certain film royalty and call centres (Sl. No. 6(iii)). An individual or HUF who is not a specified person pays 2% on contract work, professional fees and commission only when the sum exceeds ₹50 lakh in the year (Sl. No. 6(ii)).
Not in the Income-tax Act, 2025, which has table items instead (for example section 393(1), Table Sl. No. 6(i) for contract payments). The old letters are still widely used in practice and in older documents, so this post shows them as a reference..
Yes. Failure to deduct or pay attracts a penalty equal to the tax (section 448), and the payer can be treated as an assessee in default (section 391(3)); consult the interest, fee and disallowance provisions for the other consequences.
This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.
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