TDS Rate Chart for FY 2026-27: Section-Wise Breakdown Under the New Income Tax Act 2025
With the New Income Tax Act 2025 coming into effect from 1st April 2026, TDS (Tax Deducted at Source) provisions have been reorganised under a new Section 393, replacing the earlier scattered framework of 65+ individual sections. This streamlining is one of the most practically significant changes for employers, businesses, and professionals.
Under the new structure, TDS applicability is categorised into three clear segments: resident payees, non-resident payees, and general cases. For resident payees, key rates include: salary under Section 392 at slab rates; commission at 2% above Rs.20,000; rent to individuals/HUF at 2% above Rs.50,000/month; rent on property by others at 10%; professional fees at 10% above Rs.50,000; technical services and call centres at 2%; e-commerce payments at 0.1%; virtual digital assets at 1%; and TDS on purchase of goods exceeding Rs.50 lakh at 0.1%.
For non-resident payees, Section 393(2) consolidates all rates. Interest on approved foreign currency borrowings remains at 5%, while income from securities for FIIs stays at 20% or lower as per DTAA. DTAA-linked concessional rates continue to apply wherever applicable.
For general cases under Section 393(3), winnings from lotteries and online games attract 30% TDS. A new compliance requirement for partnership firms is TDS on partner salary/remuneration at 10% on amounts exceeding Rs.20,000 per year (Table Sl. No. 7).
A key practical point: businesses and payroll teams must update their accounting software to reflect new section numbers and thresholds. The structural simplification through tables (rather than lengthy text provisions) makes the law cleaner, but transition requires careful attention.
Need help updating your TDS compliance for FY 2026-27? SpotOn Business Solutions LLP provides end-to-end tax compliance services. Reach out today.
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