TDS and TCS rates during Financial Year 2025-26 (Assessment Year 2026-27) depend on the nature of transactions and the recipient’s residence status. Residents subject to TDS must file under Section 192 for their salaries. But, TDS on PF withdrawals exceeding ₹50,000 amounts to 10% of the value. Also, Bank interest follows Section 194A, applying a 10% rate with maximum limits of ₹50,000 for non-senior citizens and ₹100000 for senior citizens. Tax deduction at source amounting to 30% applies to winnings from lottery and games per Sections 194B, 194BA, 194BB. Companies deduct 1%-10% based on contracts and commissions. There is a new Section 194T, which added 10% TDS requirements on payments and partners under Sections 194N and 194S.
Non-residents pay higher TDS and TCS rates. The taxation rates for lottery, winnings, and particular capital gains are equal to 30%. But, Section 194LB of infrastructure bond interest and Section 194LC of foreign currency loans attract 5% to 4% and 9%, respectively, tax. Section 195 applies to diverse income payments that attract 10% and 30% based on income. The TCS mechanism requires payments for liquor, timber, and scrap to be taxed at different rates, between 1% and 5%. There is 1% for the sale of automobiles valued over ₹10 lakh and 5%-20% for overseas travel packages. There is a 20% tax deduction for LRS foreign remittance unless it is for education or medical expenses, where the rate becomes 5%.
TDS Rates for Financial Year 2025-26
Assessment Year 2026-27
Where the Recipient is a Resident
| Section | Nature of payment | Threshold Limit | Rate |
| 192 | Salary | As per
Slab |
As per
Slab |
| 192A | Provident Fund amount, which is not exempt from tax | 50,000 | 10% |
| 193 | Interest on securities-
Interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company, (c) any security of the Central or State Government [ie, interest exceeding Rs. 10,000 on 8% Savings (Taxable) Bonds, 2003, 7.75% Savings (Taxable) Bonds, 2018, (with effect from October 1, 2024) Floating Rate Savings Bonds, 2020 (Taxable) or any notified Government Security] |
10,000 | 10% |
| Any other interest on securities (including interest on non-listed debentures | 10,000 | 10% | |
| 194 | 194- Dividend Buy-back of shares deemed as dividend under section 2(22)(f) | 10,000 | 10% |
| Any other dividend or deemed dividend | 10,000 | 10% | |
| 194A | Interest other than interest on securities-
– Paid/payable by a bank/co-operative bank/post office to a senior citizen |
1,00,000 | 10% |
| Paid/payable by a bank/co-operative bank/post office to a person other than a senior citizen | 50,000 | 10% | |
| Paid/payable by any other person | 10,000 | 10% | |
| 194B | Winning from Lotteries (Excluding Online Games) | 10,000 in respect of a single transaction. | 30% |
| 194BA | Net Winning from any Online Games | 0 | 30% |
| 194BB | Winnings from Horse Races | 10,000 in respect of a single transaction | 30% |
| 194C | Payments to Contractors | ||
| (1) Payment to Transporter covered by Section 44AE | NA | Nil | |
| (2) Payment to individual HUF (other than above) | 30,000 | 1% | |
| (3) Payment to Others (other than above) | 30,000 | 2% | |
| 194D | Insurance Commission | 20,000 | 5% |
| 194DA | Income component received from LIC (including ULIP), which is not covered under section 10(10D) | 1,00,000 | 2% |
| 194E | Non-Resident Sportsman/Sports Association/ Entertainer | 0 | 20% |
| 194EE | Payment of deposits under NSS to Resident/Non-Resident | 2,500 | 10% |
| 194F | Repurchase of units of Mutual Fund/UTI from Resident/Non-resident (Applicable up to September 30, 2024) | 0 | 20% |
| 194G | Commission on the Sale of lottery tickets | 20,000 | 2% |
| 194H | Commission or Brokerage to Resident | 20,000 | 2% |
| 194-I | Rent to Resident | ||
| (a) Rent for machinery/plant/equipment | 50,000 per month or part of the month. | 2% | |
| (b) Rent for other than in (a) | 50,000 per month or part of the month | 10% | |
| 194-IA | Payment on transfer of certain immovable properties (Other than agricultural land) | 50,00,000 | 1% |
| 194-IB | Payment of Rent by certain Individuals or HUF (other than those who are covered under section 194I) to a resident | 50,000
p.m. |
2% |
| 194-IC | Payment under the specified agreement (in case of a joint development agreement, excluding payment in kind) | 0 | 10% |
| 194J | – Fees for professional services | 50,000 | 10% |
| – Fees for technical services and payment for calls
centers |
50,000 | 2% | |
| – Remuneration or fees to Director (other than 192) | 0 | 10% | |
| – Royalty | 50,000 | 2% | |
| – Non-compete fees | 50,000 | 10% | |
| 194K | Income/Dividend in respect of Units of Mutual Fund registered under section 10(23D), payable to a resident | 10,000 | 10% |
| 194LA | Compensation to a resident on acquisition of immovable property (excluding compensation received under RFCTLAAR Act, 2013) | 5,00,000 | 10% |
| 194M | Payment by Individual/HUF for carrying out any work pursuant to contract, commission & fees for professional services (not covered by 194C, 194D & 194J) | INR 50
Lakhs |
2% |
| 194N | TDS on cash withdrawal | ||
| – A person who did not file an ITR for the preceding three years. A Y & time limit to file the original ITR has expired, and the said person is withdrawing cash not exceeding INR 1 Crore | INR 20
Lakhs |
2% | |
| – A person who did not file an ITR for the preceding three AYs & the time limit to file the original ITR has expired, and said person is withdrawing cash exceeding INR 1 Crore (INR 3 Cr. in case of Co-Operative Society) | On an amount exceeding INR 1Cr./ INR 3 Cr. | 5% | |
| – Any other person (Except Co-Operative Society) Co-Operative Society | INR 1 Cr. INR 3 Cr. | 2%
2% |
|
| 194O | Payment by an e-commerce operator to an e-commerce participant in respect of the sale of goods or services | INR 5
lakhs |
0.10% |
| 194P | TDS in case of a resident senior citizen having an age of 75 years or more and receiving only pension in the bank and interest income from the same bank. | As per
Slab |
As per
Slab |
| 194Q | TDS on payment for the purchase of goods by a specified buyer | 50,00,000 | 0.10% |
| 194R | TDS on benefits or perquisites in respect of business or profession to a resident assessee | 20,000 | 10% |
| 194S | TDS on payment for transfer of Virtual Digital Assets to a resident assessee
(1) Specified person |
50,000 | 1% |
| (2) Other than the specified person | 10,000 | 1% | |
| 194T | TDS on payment of any sum like salary, remuneration, commission, bonus, or interest to a partner of a firm (with effect from April 1, 2025) | 20,000 | 10% |
Assessment Year 2026-27
Where the Recipient is Non-Resident
INDIVIDUAL/HUF/AOP/BOI/AJP
| Section | Nature of payment | Rate |
| 192 | Payment of salary | Normal Non
Resident (other than company) Slab Rate |
| 192A | Payment of the taxable accumulated balance of a provident fund | 10% |
| 194B | Income by way of winnings from lotteries, crossword puzzles, card games, and other games of any sort)
(Above Rs. 10,000/- in respect of a single transaction) |
30% |
| 194BA | Winnings from online games | 30% |
| 194BB | Winnings from horse races (Above Rs. 10,000/- in respect of a single transaction) | 30% |
| 194E | 194E-Payment to a non-resident foreign citizen sportsman/entertainer or non-resident sports association | 20% |
| 194EE | Payment in respect of deposits under the National Savings Scheme, 1987 | 10% |
| 194G | Commission on the sale of lottery tickets | 2% |
| 194LB | Payment/credit by way of interest by the infrastructure debt fund | 5% |
| 194LBA
(2) |
Payment by a business trust to unit holders of the nature referred to in | 10% |
| 194LBA
(3) |
Payment of the nature referred to in section
10(23FCA) by a business trust to unit holders |
30% |
| 194LBB | Payment in respect of units of investment fund specified in section 115UB | 30% |
| 194LBC
(2) |
Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA | 30% |
| 194LC | Payment/credit of interest by an Indian specified company or business trust on –
foreign currency approved loan/long-term bonds from outside India |
5% |
| long-term bond/rupee-denominated bond
listed in a recognised stock exchange located in any International Financial Services Centre long-term bond/rupee-denominated bond issued on or after July 1, 2023, which is listed only on a recognised stock exchange located in an International Financial Services Centre |
4%
9% |
|
| 194LD | Interest on a rupee-denominated bond of an Indian company or a Government security | 5% |
| 194N | TDS on cash withdrawal | |
| – A person who did not file ITR for the preceding three A
Y & time limit to file original ITR has expired, and the said person is withdrawing cash not exceeding INR 1 Crore |
2% | |
| – A person who did not file ITR for the preceding three years AYs & the time limit to file original ITR has expired, and said person is withdrawing cash exceeding INR 1 Crore (INR 3 Cr. In case of Co-Operative Society) | 5% | |
| Any other person (Except Co-Operative Society) Co-Operative Society | 2% | |
| 194T | Payment of remuneration/interest by a firm to its partner(s) | 10% |
| 195 | Payment of other sums to Non-Resident (Other than those specified in Section 194LB) | |
| (A) on any investment income | 20% | |
| (B) on income by way of long-term capital gains referred to in section 115E or sub-clause (iii) of clause (c) of sub-section (1) of section 112 | 12.50% | |
| C) on income by way of long-term capital gains referred to in section 112A exceeding one lakh twenty-five thousand rupees, | 12.50% | |
| (D) on other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33) and (36) of section 10] | 12.50% | |
| (E) on income by way of short-term capital gains referred to in section 111A | 20% | |
| (F) on income by way of interest payable by the Government or an Indian concern on money borrowed or debt incurred by the Government or the Indian concern in foreign currency (not being income by way of interest referred to in section 194LB or | 20 % | |
| section 194LC) | ||
| (G) on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of section 115A of the Incometax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident in India | 20% | |
| (H) on income by way of royalty [not being royalty of the nature referred to in sub-item (b)(i)(G)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is under that policy | 20% | |
| ( ) on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is under that policy | 20% | |
| (I) on income by way of winnings from lotteries, crossword puzzles, card games, and other games of any sort (other than winnings from online games) | 30% | |
| (J) on income by way of winnings from horse races | 30% | |
| (K) on income by way of net winnings from online games | 30% | |
| (L) on the income by way of dividend, referred to in the proviso to sub-clause (A) of clause (a) of subsection (1) of section 115A | 10% | |
| (M) on income by way ofa dividend other than the | 20% | |
| income referred to in sub-item (b)(i)(M) | ||
| (O) on the whole of the other income | 30% | |
| 196A | Income in respect of units of a non-resident/foreign company | 20% |
| 196B | Payment/credit of income from units to an offshore fund
Long-term capital gains on the transfer of the aforesaid units |
10%
12.5% |
| 196C | Payment/credit of interest on foreign currency bonds or GDR
long-term capital gains on transfer of the aforesaid bonds/GDR |
10%
12.5% |
| 196D(1) | Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors | 20% |
| 196D
(1A) |
Payment/credit of interest from securities to a specified fund [referred to in section 10(4D), Expln. (c)] | 10% |
TCS Rates for Financial Year 2025-26
Assessment Year 2026-27
Rates of Tax Collected at Source
| Section | Nature of payment | Threshold Limit | Rate |
| 206C | Alcoholic Liquor for human consumption | 0 | 1% |
| 206C | Timber or any other forest produce (not being tendu leaves) obtained under a forest lease | 0 | 2% |
| 206C | Timber obtained by any mode other than under a forest lease | 0 | 2% |
| 206C | scrap | 0 | 1% |
| 206C | Parking Lot/Toll plaza/mining and Quarrying | 0 | 2% |
| 206C | Tendu Leaves | 0 | 5% |
| 206C | Minerals, such as coal or lignite, or iron ore | 0 | 1% |
| 206C(1F) | Sale of Motor Car or any other goods as specified | 10,00,000 | 1% |
| 206C(1G) | Remittance out of India under the LRS for purposes other than educational, medical, and overseas tour packages | 10,00,000 | 20% |
| 206C(1G) | Remittance out of India – Education Loan (Loan is taken from a financial institution as defined under section 80E) | Not
applicable |
Not
applicable |
| 206C(1G) | Remittance out of India – Medical treatment or Educational Purpose other than above | 10,00,000 | 5% |
| 206C(1G) | Sale of overseas Tour packages | Upto
10,00,000 |
5% |
| Above
10,00,000 |
20% | ||
| 206C(1H) | Sale of goods (not covered under any of the above provisions), excluding the case where the buyer of goods is liable to deduct tax at source on such goods under any other provision and has deducted such TDS. | Not
applicable |
Not
applicable |