TDS rates and the thresholds that trigger them vary widely by payment type – rent, interest, professional fees, and contractor payments are all treated differently. Pick your payment type below and this tool applies the exact threshold and rate for FY 2026-27.
Rent is checked against a monthly threshold, not annual – enter your monthly rent amount below.
If PAN is not provided, Section 206AA requires TDS at the higher of the normal rate or 20%.
This calculator covers the most common individual and small-business TDS sections for FY 2026-27. It does not cover salary TDS (Section 192, which follows income tax slabs – use the Income Tax Calculator instead), TCS provisions, or specialised sections for NRIs and specific industries.
TDS Isn’t One Rate – It’s a Different Rule for Every Payment Type
Tax Deducted at Source means the person paying you deducts tax before you receive the money, and deposits it with the government on your behalf. The rate and the threshold that triggers it depend entirely on what kind of payment it is – rent works completely differently from professional fees, which works completely differently from a contractor payment. Getting the wrong section wrong means either deducting too little (which lands the deductor in trouble) or too much (which just ties up the recipient’s cash until they claim it back at tax filing time).
FY 2026-27 Rates and Thresholds at a Glance
| Section | Payment Type | Threshold | Rate |
|---|---|---|---|
| 194A | Interest (bank/post office) | Rs 50,000/year (Rs 1,00,000 for seniors) | 10% |
| 194I | Rent – land/building | Rs 50,000/month | 10% |
| 194I | Rent – plant/machinery | Rs 50,000/month | 2% |
| 194J | Professional fees | Rs 50,000/year | 10% |
| 194J | Technical services | Rs 50,000/year | 2% |
| 194C | Contractor – individual/HUF | Rs 30,000 single or Rs 1,00,000/year aggregate | 1% |
| 194C | Contractor – others | Rs 30,000 single or Rs 1,00,000/year aggregate | 2% |
| 194H | Commission / brokerage | Rs 20,000/year | 2% |
| 194D | Insurance commission | Rs 20,000/year | 2% |
| 194 | Dividend | Rs 10,000/year | 10% |
| 194Q | Purchase of goods | On amount above Rs 50 lakh/year | 0.1% |
The Big Rent Change You Need to Know About
Section 194I used to check an annual aggregate threshold of Rs 2,40,000 – so a landlord received rent all year and the threshold only mattered once the full year’s rent crossed that mark. From 1 April 2025, this switched to a monthly threshold of Rs 50,000, tested every single month independently. A tenant paying Rs 45,000 a month (Rs 5,40,000 for the year) still owes no TDS, since Rs 45,000 stays under Rs 50,000 every month. But a tenant paying Rs 51,000 a month must deduct TDS on every single month’s rent, even though the old annual math would have looked similar. This is one of the most common places businesses and individual landlords get caught out, since many payroll and accounting systems took time to update to the new monthly logic.
Threshold Types Differ by Section
Not every section checks the threshold the same way. Rent (194I) checks every month independently. Contractor payments (194C) check two things at once – a single payment above Rs 30,000 triggers TDS on that payment alone, while an annual total above Rs 1,00,000 across several smaller payments also triggers TDS from that point onward. Most other sections – interest, professional fees, commission, dividend – simply add up all payments to the same person across the financial year and check the total against one annual limit.
What Happens Without a PAN
Section 206AA requires the deductor to apply a higher rate whenever the recipient hasn’t provided a valid PAN Card – specifically, the higher of the normal prescribed rate for that section or a flat 20%. For sections where the standard rate is already 10%, this doesn’t change anything, since 20% is higher either way and the deductor must use 20%. For sections with a 1% or 2% standard rate, this jump to 20% is dramatic, which is exactly why deductors insist on collecting PAN details before making any payment that could attract TDS.
A New Section for Partnership Firms
Section 194T is a genuinely new addition – it requires a 10% TDS on payments a partnership firm or LLP makes to its own partners, covering interest, salary, commission, bonus, or remuneration, once the aggregate crosses Rs 20,000 in a year. This closes a gap that previously let partner payments flow without any TDS obligation at all, and firms that never had to think about TDS on partner drawings now need to track this carefully.
TDS Isn’t the Final Tax – It’s an Advance Payment
A deduction under any of these sections doesn’t mean the income is tax-free or that your obligation ends there. TDS is simply tax collected in advance on your behalf. You still need to include the full income in your tax return, calculate your actual tax liability at your applicable rate, and then claim credit for whatever was already deducted – if the TDS deducted exceeds your actual liability, you get the difference back as a refund, and if it falls short, you pay the balance.
Frequently Asked Questions (FAQs)
Ans. For FY 2026-27, TDS under Section 194A generally applies when interest earned from a bank, post office, or cooperative bank exceeds ₹50,000 in a financial year for regular depositors. For senior citizens aged 60 years or above, the threshold is ₹1,00,000 per financial year. Once the threshold is crossed, TDS is deducted at the applicable rate. Eligible taxpayers whose total income is below the taxable limit may submit Form 15G or Form 15H to avoid TDS deduction.
Ans. From 1 April 2025, Section 194I shifted from an annual threshold-based system to a monthly threshold of ₹50,000. Earlier, TDS became applicable only when total annual rent exceeded ₹2,40,000. Under the revised rule, each month’s rent is evaluated separately. As a result, a tenant paying ₹49,000 per month may not attract TDS, while a payment of ₹51,000 per month requires TDS deduction every month.
Ans. Section 194J applies different TDS rates depending on the nature of the payment. Professional services such as legal, medical, accounting, architectural, and consultancy services generally attract 10% TDS. Payments for certain technical services are subject to a lower 2% TDS rate. Both categories share the same threshold limit, but the applicable deduction rate differs based on the type of service provided.
Ans. Yes. Under Section 206AA, if the payee fails to furnish a valid PAN, the deductor must apply TDS at the higher of the prescribed rate or 20%. This can significantly increase the deduction amount. For example, a contractor payment normally subject to 1% or 2% TDS may attract a 20% deduction when PAN details are not available.
Ans. TDS is only an advance collection of tax and not the final tax liability. While filing your Income Tax Return (ITR), you must include the full income earned during the year and calculate the actual tax payable. If the TDS deducted is less than your final tax liability, you must pay the balance amount. If excess TDS has been deducted, you can claim a refund from the Income Tax Department.
Ans. Section 194T requires partnership firms and LLPs to deduct 10% TDS on payments made to partners, including salary, remuneration, commission, bonus, or interest, once the aggregate amount paid to a partner exceeds ₹20,000 in a financial year. This provision brings partner payments within the TDS framework and increases compliance requirements for firms.
Ans. Section 194C contains two separate triggers for TDS applicability. TDS must be deducted if a single payment exceeds ₹30,000. Even if individual payments remain below ₹30,000, TDS becomes applicable once the aggregate payments to the contractor exceed ₹1,00,000 during the financial year. Crossing either condition is sufficient to attract TDS.
Ans. No major TDS rate changes were introduced specifically for FY 2026-27. Most rates and thresholds continue from the previous financial year. However, taxpayers should remain updated on amendments relating to thresholds, compliance requirements, and newly introduced provisions such as Section 194T, which expanded TDS obligations for partnership firms and LLPs.
Ans. This depends on the specific TDS section. In many cases, once the prescribed threshold is crossed, TDS is deducted on the entire eligible payment. However, certain provisions such as Section 194Q (Purchase of Goods) apply TDS only on the amount exceeding the threshold limit. Always check the relevant section before calculating TDS.
Ans. You can verify TDS deductions through Form 26AS, the Annual Information Statement (AIS), or the Taxpayer Information Summary (TIS) available on the Income Tax e-Filing Portal. These records show the amount deducted, the deductor’s details, and whether the tax has been deposited with the government.
Tabassum is a government document researcher and writer with over 5 years of experience exclusively dedicated to tracking and simplifying Central and State Government document processes across India. She has researched and published detailed guides on 100+ government documents and certificates – including Aadhaar Card, PAN Card, Ration Card, Domicile Certificate, and Birth Certificate – covering all states and the Central Government, helping lakhs of Indian citizens successfully complete their paperwork in simple, easy-to-understand language.