Applicable from: 1st April 2026
With the implementation of the New Income Tax Act, 2025, the structure of TDS provisions has been reorganized and re-coded.
While rates and thresholds remain largely similar, the section numbers and payment codes have changed, which directly impacts:
- TDS payment (new challan system)
- Return filing
- Compliance and reporting
👉 Therefore, understanding the new section codes + payment codes is crucial for professionals.
watch below video to know the new process of TDS/TCS payment
📊 Key TDS Rates Chart – FY 2026-27
| S. No. | Nature of Payment | Old Section | New Section Code | Payment Code | Threshold Limit | TDS Rate |
|---|---|---|---|---|---|---|
| 1 | Salary (Other than Govt. Employees) | 192 | 392 | 1001 | Basic exemption limit | Slab Rates |
| 2 | Salary (Govt. Employees) | 192 | 392 | 1002 | Basic exemption limit | Slab Rates |
| 3 | Interest on Securities | 193 | 393(1) [Sl.5(i)] | 1019 | ₹10,000 | 10% |
| 4 | Dividend | 194 | 393(1) [Sl.7] | 1029 | Nil | 10% |
| 5 | Interest other than Securities | 194A | ||||
| A) Senior Citizens | 393(1)[Sl.5(ii).D(a)] | 1020 | ₹1,00,000 | 10% | ||
| B) Other Individuals | 393(1)[Sl.5(ii).D(b)] | 1021 | ₹50,000 | 10% | ||
| C) Others | 393(1)[Sl.5(iii)] | 1022 | ₹10,000 | 10% | ||
| 6 | Contractors / Sub-contractors | 194C | ||||
| A) Individual / HUF | 393(1)[Sl.6(i).D(a)] | 1023 | ₹30,000 / ₹1,00,000 | 1% | ||
| B) Others | 393(1)[Sl.6(i).D(b)] | 1024 | Same | 2% | ||
| 7 | Commission / Brokerage | 194H | 393(1)[Sl.1(ii)] | 1006 | ₹20,000 | 2% |
| 8 | Rent | 194I | ||||
| A) Plant & Machinery | 194I(a) | 393(1)[Sl.2(ii).D(a)] | 1008 | ₹50,000/month | 2% | |
| B) Land/Building/Furniture | 194I(b) | 393(1)[Sl.2(ii).D(b)] | 1009 | ₹50,000/month | 10% | |
| 9 | Professional / Technical Fees | 194J | ||||
| A) Technical Services | 393(1)[Sl.6(iii).D(a)] | 1026 | ₹50,000 | 2% | ||
| B) Professional Services | 393(1)[Sl.6(iii).D(b)] | 1027 | ₹50,000 | 10% | ||
| C) Director Fees | 393(1)[Sl.6(iii).D(b)] | 1028 | 10% | |||
| 10 | Perquisite / Benefit | 194R | ||||
| A) Cash | 393(1)[Sl.8(iv)] | 1034 | ₹20,000 | 10% | ||
| B) In Kind / Mixed | 393(1)[Sl.8(iv) Note 6] | 1035 | ₹20,000 | 10% | ||
| 11 | Payment to Partners (Firm) | 194T | 393(3)[Sl.7] | 1067 | ₹20,000 | 10% |
| 12 | Purchase of Goods | 194Q | 393(1)[Sl.8(ii)] | 1031 | ₹50 Lakh | 0.1% |
| 13 | PF Withdrawal | 192A | 393(7) | 1004 | ₹50,000 | 10% |
| 14 | Sale of Scrap (TCS) | 206C(1) | 394(1)[Sl.4] | 1073 | Nil | 1% |
💡 Practical Insights for Professionals
✔ Always select correct payment code while making TDS payment
✔ Verify section mapping under new Act
✔ Educate clients about new challan system
✔ Maintain proper documentation in case of litigation or mismatch
The contents of this article are for general informational purposes only and are intended to provide quick access to tax rate information. Readers are advised to verify the provisions with the Income-tax Act, relevant rules, notifications, and official government sources before making financial decisions.
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