What is the TDS rate on professional fees in 2026?

TDS on professional fees (Section 194J(b)) is 10% when the payment exceeds ₹30,000 in a financial year. Technical services under 194J(a) attract only 2% TDS. If the professional does not have PAN, TDS is deducted at 20%.

What is the TDS rate on rent?

TDS on rent of land/building/furniture is 10% under Section 194I(b) when annual rent exceeds ₹2,40,000. For plant and machinery rent, it is 2% under 194I(a). Individual/HUF tenants paying above ₹50,000/month deduct TDS at 5% under 194-IB.

TDS Rate Finder 2026 — Section, Rate & Threshold

Search any payment type to find the applicable TDS section, rate, and threshold limit. Covers all major sections including 194C, 194J, 194H, 194I, and 194Q. Updated for FY 2025-26.

Showing 19 of 19 sections

Salary

Sec 192Threshold: Basic exemption limit

TDS on salary as per income tax slab

As per slab

Interest on securities

Sec 193Threshold: ₹10,000

Debentures, bonds (not listed)

10%

Dividend

Sec 194Threshold: ₹5,000

Dividend from shares

10%

Interest (other than securities)

Sec 194AThreshold: ₹40,000 / ₹50,000 (senior)

FD interest, bank interest

10%

Lottery / puzzle / horse race winnings

Sec 194B/194BBThreshold: ₹10,000

No change

30%

Insurance commission

Sec 194DThreshold: ₹15,000

Commission to insurance agents

Life insurance maturity

Sec 194DAThreshold: ₹1,00,000

On income portion only

Commission / brokerage

Sec 194HThreshold: ₹15,000

Agent commission

Rent (land/building)

Sec 194I(a)Threshold: ₹2,40,000

Plant/machinery/equipment

Rent (land/building/furniture)

Sec 194I(b)Threshold: ₹2,40,000

Commercial rent

10%

Professional / technical fees

Sec 194J(a)Threshold: ₹30,000

Technical services, call center

Professional fees

Sec 194J(b)Threshold: ₹30,000

Legal, medical, engineering, CA fees

10%

Contract payment

Sec 194CThreshold: ₹30,000 single / ₹1,00,000 aggregate

Works contract, labor

1% (ind) / 2% (others)

Payment to NRI

Sec 195Threshold: Any amount

Foreign payments, DTAA rate may apply

As applicable

E-commerce operator payment

Sec 194-OThreshold: ₹5,00,000

Amazon, Flipkart seller payments

Sale of immovable property

Sec 194-IAThreshold: ₹50,00,000

Property purchase > ₹50 lakh

Rent by individual/HUF

Sec 194-IBThreshold: ₹50,000/month

Tenant TDS on monthly rent

Payment for purchase of goods

Sec 194QThreshold: ₹50,00,000

Buyer turnover > ₹10 Cr

0.1%

Virtual digital assets (crypto)

Sec 194SThreshold: ₹10,000 / ₹50,000

Crypto, NFT transactions

Key TDS Changes in FY 2025-26

The Finance Act 2025 brought several TDS simplifications. The threshold for Section 194A (interest other than securities) was raised to ₹50,000 for senior citizens. Section 194Q now applies only to buyers with turnover above ₹10 crore. The crypto TDS under 194S continues at 1% with improved reporting requirements.

One major simplification: the government is consolidating several TDS sections into a single unified section in phases. Currently, the old section numbers remain valid but a mapping to new unified sections is in progress.

Additionally, the new tax regime now allows TDS deductions to be calculated at the applicable slab rates for salary (Section 192) when the employee opts for the new regime. The threshold for Section 194-IB (rent paid by individual/HUF) remains at ₹50,000 per month.

TDS Compliance Checklist for Businesses

Every business that deducts TDS must follow a strict compliance calendar. Missing deadlines attracts interest, penalty, and prosecution:

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Deduct TDS at the time of payment or credit (whichever is earlier)

At each payment

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Deposit TDS to government via challan 281

7th of next month

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File quarterly TDS return (24Q for salary, 26Q for non-salary)

Within 31 days after quarter end

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Issue TDS certificate (Form 16/16A) to deductees

Within 15 days of return filing

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File correction statement if errors found

Before assessment

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Verify lower deduction certificate (Section 197) if claimed by payee

Before applying lower rate

Most Commonly Confused TDS Rates

These are the payment types where businesses most often apply the wrong TDS rate:

CA fees vs. IT consultant fees

CA, doctor, lawyer fees fall under Section 194J(b) at 10%. But technical services (IT consultants, call centers, software development) fall under 194J(a) at only 2%. The distinction matters — getting it wrong means over-deduction or under-deduction.

Contractor vs. professional

A contractor (Section 194C) attracts 1-2% TDS, while a professional (Section 194J) attracts 2-10%. The difference depends on whether there is a works contract for service delivery or a professional engagement.

Rent of building vs. equipment

Rent on land/building is 10% under 194I(b), but rent on plant/machinery is only 2% under 194I(a). If you rent a furnished office, split the rent into building and furniture components for correct TDS.

Commission to agents vs. employees

Commission to insurance agents is 5% under Section 194D. Commission to non-employee agents/brokers is 5% under 194H. But sales incentives to employees are part of salary — deducted under 192 at slab rate.

Frequently Asked Questions

What is the penalty for not deducting TDS?▼

If you fail to deduct TDS, you are liable for: (1) Interest at 1% per month from date of deductibility to date of deduction, (2) Disallowance of 30% of the expense in your income tax return under Section 40(a)(ia), (3) Penalty under Section 271C equal to the TDS amount not deducted. In severe cases, prosecution under Section 276B can lead to imprisonment up to 7 years.

What if the payee does not have PAN?▼

If the payee does not furnish PAN, TDS is deducted at the higher of: (1) the rate specified in the relevant section, (2) 20%, or (3) the rate in force. This is mandated under Section 206AA. For example, if the normal TDS rate is 10% and the payee has no PAN, you must deduct at 20%.

Can a payee request lower TDS deduction?▼

Yes. Under Section 197, a payee can apply to the Assessing Officer for a lower deduction certificate if their total income is expected to be below the taxable limit or if TDS at the standard rate would be excessive. The certificate specifies the lower rate to be applied.

Is TDS applicable on GST component?▼

No. TDS under the Income Tax Act is deducted on the base amount excluding GST. If a CA charges ₹1,00,000 + ₹18,000 GST, TDS at 10% is deducted on ₹1,00,000 (i.e., ₹10,000), not on ₹1,18,000. This is clarified by CBDT Circular No. 23/2017.

What happens if I deposit TDS late?▼

Late deposit attracts interest at 1.5% per month from the date of deduction to the date of deposit. If TDS is deducted but not deposited for more than one year, it is an offense punishable with imprisonment of 3 months to 7 years under Section 276B.

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Last updated: May 2026 | Based on Income Tax Act and Finance Act 2025