📊 Comprehensive Guide to TDS & TCS Rates – FY 2026–27 (With Old vs New Section Mapping & Detailed Rate Chart)

The Financial Year 2026–27 introduces a major structural shift in India’s tax deduction and collection system with the implementation of the Income-tax Act, 2025. While rates largely remain unchanged, the government has streamlined the law by consolidating multiple sections into fewer unified provisions, thereby improving clarity and compliance.

This article provides a complete understanding of TDS & TCS rates, section mapping, thresholds, and practical implications, along with detailed remarks for each provision.

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🔹 1. Key Structural Changes

✔ Consolidation of Sections

• Section 392 → Salary
• Section 393 → Non-Salary TDS
• Section 394 → TCS

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✔ Terminology Change

• Assessment Year (AY) → Tax Year (TY)
• Example: FY 2026–27 = TY 2026–27

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✔ Change in Forms

• Form 16 → Form 130
• Form 16A → Form 131
• Form 27D → Form 133

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🔹 2. TDS Rate Chart (FY 2026–27)

1. Salary & Employee Payments

Old	New	Nature	Rate	Threshold	Remarks
192	392	Salary	Slab	Slab	Based on employee declarations, deductions & tax regime selection
192A	392	EPF Withdrawal	10%	₹50,000	No TDS if 5 years continuous service; PAN required

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2. Interest & Dividend

Old	New	Nature	Rate	Threshold	Remarks
193	393	Interest on Securities	10%	₹10,000	Excludes Govt securities & notified entities
194	393	Dividend	10%	₹10,000	No TDS for LIC, insurers, business trust
194A	393	Bank Interest	10%	₹50,000	Higher threshold for senior citizens
194A	393	Other Interest	10%	₹10,000	Form 121(earlier 15G/15H) can avoid TDS

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3. Winnings & Games

Old	New	Nature	Rate	Threshold	Remarks
194B	393	Lottery/Gambling	30%	₹10,000	On net winnings after deducting stake
194BA	393	Online Gaming	30%	No limit	Applicable on net winnings at withdrawal/end of FY
194BB	393	Horse Racing	30%	₹10,000	Aggregate winnings during FY considered

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4. Contracts, Insurance & Commission

Old	New	Nature	Rate	Threshold	Remarks
194C	393	Contractor	1%/2%	₹30K / ₹1L	1% for Ind/HUF, 2% others; applies on aggregate
194D	393	Insurance Commission	2%	₹20,000	Applies to agents/intermediaries
194DA	393	Life Insurance	2%	₹1,00,000	On income portion, not total payout
194E	393	Non-resident Sportsman	20%	No limit	No threshold exemption
194G	393	Lottery Commission	2%	₹20,000	Paid to distributors/agents
194H	393	Brokerage	2%	₹20,000	Excludes commission on securities

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5. Rent & Property

Old	New	Nature	Rate	Threshold	Remarks
194I	393	Rent	2% / 10%	₹50K/month	2% P&M, 10% Land/Building
194IA	393	Property Purchase	1%	₹50 Lakhs	On higher of sale value or stamp duty value
194IB	393	Rent (Ind/HUF)	2%	₹50K/month	Applicable for non-tax audit individuals

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6. Professional & Business Payments

Old	New	Nature	Rate	Threshold	Remarks
194J	393	Professional Fees	10%	₹50,000	No limit for director remuneration; call centers @2%
194M	393	Ind/HUF Payments	2%	₹50 Lakhs	When not covered under other sections

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7. Special Provisions

Old	New	Nature	Rate	Threshold	Remarks
194LA	393	Land Compensation	10%	₹2.5 Lakhs	No TDS on agricultural land
194N	393	Cash Withdrawal	2% / 5%	>₹1 Cr	Higher rate for non-filers
194O	393	E-commerce	0.10%	₹5 Lakhs	On gross sale value
194P	393	Senior Citizens	Slab	—	Bank handles TDS for eligible 75+ individuals
194Q	393	Purchase of Goods	0.10%	₹50 Lakhs	Buyer turnover > ₹10 Cr
194R	393	Perquisites	10%	₹20,000	Non-cash benefits also covered
194S	393	Crypto	1%	₹50K/₹10K	Applies on transfer value
194T	393	Partner Payments	10%	₹20,000	Covers salary, bonus, interest

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8. Non-Resident Payments

Old	New	Nature	Rate	Threshold	Remarks
195	393	Non-Resident Payment	DTAA	No limit	Apply lower treaty rate if available

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🔹 3. TCS Rate Chart (FY 2026–27)

1. General Goods & Services

Old	New	Nature	Rate	Remarks
206C(1)	394	Liquor, Scrap, Minerals	2%	Rates standardized across categories
206C(1C)	394	Parking, Toll	2%	Applicable on lease/license basis

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2. Sale Transactions

Old	New	Nature	Rate	Threshold	Remarks
206C(1F)	394	Motor Vehicle	1%	>₹10L	Per transaction basis
206C(1F)	394	Luxury Goods	1%	>₹10L	Includes watches, yachts, etc.

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3. Foreign Remittance (LRS)

Old	New	Nature	Rate	Threshold	Remarks
206C(1G)	394	Education/Medical	2%	>₹10L	No TCS below ₹10L
206C(1G)	394	Other	20%	>₹10L	Higher rate for non-specified use
206C(1G)	394	Tour Package	2%	No limit	Flat rate

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🔹 4. Comparison Snapshot

Particulars	FY 2025–26	FY 2026–27
Sections	Multiple	Consolidated
TCS	206C	394
Structure	Complex	Simplified
Rates	Same	Same
Thresholds	Lower	Increased in few cases

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🔹 5. Practical Impact

For Businesses

• Mandatory system updates
• Correct section mapping
• Stronger compliance tracking

For Professionals

• Reduced small transaction burden
• Increased clarity

For Individuals

• Minimal impact on tax liability
• Improved transparency

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🔹 6. Conclusion

The TDS & TCS framework for FY 2026–27 represents a structural simplification reform rather than a rate change reform. The consolidation into Sections 392, 393, and 394 enhances clarity and ease of compliance.

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📌 Final Note

“While the structure of TDS/TCS provisions has been simplified under the new law, taxpayers must carefully identify the nature of transactions to ensure correct application of rates, thresholds, and compliance requirements.”