Official Source
CBDT Circular
The Central Board of Direct Taxes (CBDT) has issued updated TDS (Tax Deducted at Source) rates applicable for Financial Year 2026-27. Businesses and employers must update their payroll and accounting systems to reflect these changes and ensure correct TDS deduction.
Key TDS Rates for FY 2026-27
Section 192 — Salaries:
TDS deducted at applicable income tax slab rates. For new regime default employees, ensure the regime choice is captured in Form 12BB.
Section 194C — Contractor Payments:
Section 194J — Professional Fees:
Section 194H — Commission and Brokerage:
- ▸Individual/HUF contractors: 1% of payment
- ▸Other contractors: 2% of payment
- ▸Threshold: ₹30,000 per payment or ₹1 lakh in a financial year
- ▸Technical services: 2% (including software development, IT services)
- ▸Other professional services: 10%
- ▸Threshold: ₹30,000 per year
- ▸Rate: 5%
- ▸Threshold: ₹15,000 per year
Section 194Q — TDS on Purchase of Goods
Applicable for buyers with turnover exceeding ₹10 crore:
- ▸Rate: 0.1% on purchase value exceeding ₹50 lakh from a single seller
- ▸PAN of seller is mandatory; otherwise 5% TDS applies
- ▸Section 194Q and Section 206C(1H) are mutually exclusive — only one applies
Higher TDS for Non-Filers (Section 206AB)
From July 1, 2021, higher TDS rates apply where payee has NOT filed ITR for 2 preceding years AND TDS/TCS in each of those 2 years exceeds ₹50,000:
- ▸Rate is twice the applicable TDS rate or 5%, whichever is higher
- ▸Check compliance status of vendors using TRACES portal's "Compliance Check for Section 206AB"
TDS Return Due Dates for FY 2026-27
| Quarter | Period | Due Date |
| Q1 | April–June 2026 | July 31, 2026 |
| Q2 | July–Sept 2026 | October 31, 2026 |
| Q3 | Oct–Dec 2026 | January 31, 2027 |
| Q4 | Jan–Mar 2027 | May 31, 2027 |
Compliance Checklist
- ▸Obtain PAN from all vendors/payees before making first payment
- ▸Deduct TDS at correct rates at time of payment or credit, whichever is earlier
- ▸Deposit TDS challan by 7th of the following month (March: by April 30)
- ▸File quarterly TDS returns (Form 24Q/26Q/27Q) within due dates
- ▸Issue Form 16/16A to employees/payees within 15 days of due date of quarterly return
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