TDS Guide: Rates, Thresholds & Due Dates
What TDS is, the common sections and rates, deposit and return due dates, TDS certificates, and the move to Numeric Payment Codes under the Income Tax Act 2025.
Written by CA Gaurav Singh, Chartered Accountant (ICAI Membership No. 539050) · Last updated: 13 July 2026
Note: Indicative rates and dates for FY 2025-26 / FY 2026-27. Specific rates, thresholds and PAN-related provisions should be verified against the current law; this is not a substitute for professional advice.
Tax Deducted at Source (TDS) is where a great deal of routine tax compliance happens — and where avoidable errors are common. A business that pays salaries, contractors, professionals or rent is usually a deductor, responsible for withholding tax, depositing it on time, filing returns and issuing certificates. This guide sets out the essentials.
Common TDS sections and rates
| Section (1961 Act, to 31 Mar 2026) | Payment | Indicative rate | 2025 Act (from 1 Apr 2026) |
|---|---|---|---|
| 192 | Salary | At slab rates | Section 392 |
| 194C | Payment to contractors | 1% (individual/HUF), 2% (others) | Section 393, code 1023 (individual/HUF) / 1024 (others) |
| 194J | Professional / technical fees | 10% (2% for technical services) | Section 393, code 1026 (technical) / 1027 (professional) |
| 194I | Rent | 2% (plant/machinery), 10% (land/building) | Section 393, code 1008 / 1009 |
| 194-IB | Rent paid by individual/HUF not liable to tax audit, above Rs 50,000 per month | 2% | Section 393(1), reported in Form 141 (Schedule A) |
| 194H | Commission / brokerage | 2% | Section 393, code 1006 |
| 194A | Interest (other than securities) | 10% | Section 393, code 1020 (senior citizen) / 1021 (others) |
Each section has a threshold below which no deduction is required, and a higher rate applies where the recipient has not furnished a valid PAN. Codes are the numeric payment codes used on TDS challans and returns under the Income Tax Act, 2025 (TDS codes 1001-1067); confirm the code in the e-Pay Tax drop-down before depositing.
Deposit and return due dates
- Deposit: by the 7th of the following month (TDS for March by 30 April).
- Quarterly returns: Form 24Q (salary) and Form 26Q (non-salary), generally by the 31st of the month after the quarter, with the last quarter allowed until 31 May. Under the Income Tax Rules, 2026 these become Form 138 and Form 140 (Form 27Q for non-residents becomes Form 144).
- Certificates: Form 16 (salary, annual) and Form 16A (non-salary, quarterly), issued after the returns are processed. Under the Income Tax Rules, 2026 these become Form 130 and Form 131.
Interest, late fee and penalty
Late deduction attracts interest at 1% per month; late deposit attracts 1.5% per month. Late filing of the return attracts a fee under Section 234E of Rs 200 per day (capped at the TDS amount), and a separate penalty under Section 271H may apply for non-filing or incorrect filing. From Tax Year 2026-27 the corresponding provisions of the Income Tax Act, 2025 are Section 427 (fee) and Section 461 (penalty).
The Income Tax Act 2025 transition
From Tax Year 2026-27 (income on or after 1 April 2026), salary TDS moves from Section 192 to Section 392, and the various non-salary TDS provisions consolidate into Section 393 using Numeric Payment Codes. Deductions and returns for FY 2025-26 continue under the 1961 Act. The complete section and form mapping is set out in our Income Tax Act 2025 transition guide.
Frequently Asked Questions
What is TDS?
Tax Deducted at Source (TDS) is a mechanism by which tax is collected at the point of certain payments. The payer deducts a prescribed percentage before paying the recipient and deposits it with the government against the recipient PAN, where it appears as a credit in Form 26AS and the Annual Information Statement.
What are common TDS sections and rates?
From Tax Year 2026-27 (Income Tax Act, 2025), salary TDS falls under Section 392 and most non-salary TDS under Section 393, identified by Numeric Payment Codes. The familiar 1961-Act references are salary (Section 192, slab rates), contractors (Section 194C, 1% or 2%), professional or technical fees (Section 194J, 10% or 2%), rent (Section 194I, 2% or 10%), commission (Section 194H) and interest (Section 194A); these apply to payments up to 31 March 2026. Each head has its own threshold, so confirm the current rate against the corresponding Section 393 entry.
What is the due date for depositing TDS?
TDS deducted during a month must generally be deposited by the 7th of the following month. TDS deducted in March is allowed until 30 April. Late deposit attracts interest at 1.5% per month from the date of deduction to the date of payment.
When are TDS returns filed?
TDS returns are filed quarterly — Form 24Q for salary and Form 26Q for most non-salary payments. They are generally due by the 31st of the month following the quarter (with the last quarter allowed until 31 May). Under the Income Tax Rules, 2026, Form 24Q becomes Form 138, Form 26Q becomes Form 140 and Form 27Q becomes Form 144 for Tax Year 2026-27 onwards. Late filing attracts a fee of Rs 200 per day under Section 234E (Section 427 of the Income Tax Act, 2025 from Tax Year 2026-27).
What are TDS certificates?
After filing returns, the deductor issues TDS certificates — Form 16 for salary and Form 16A for non-salary payments — which the recipient uses while filing the income-tax return. Under the Income Tax Rules, 2026, Form 16 is replaced by Form 130 and Form 16A by Form 131 for Tax Year 2026-27 onwards.
How does the Income Tax Act 2025 change TDS?
Under the Income Tax Act, 2025 (effective from Tax Year 2026-27), salary TDS moves from Section 192 to Section 392, and the various non-salary TDS provisions are consolidated into Section 393 using Numeric Payment Codes. FY 2025-26 deductions and returns continue under the 1961 Act. See our Income Tax Act 2025 transition reference for the full mapping.