TDS Threshold Limits All Sections (194A-194T): Quick Reference Chart FY 2026-27
Tax Deducted at Source (TDS) is one of the most frequently used compliance tools in India, but the single thing that trips up most finance teams is remembering which section applies to which payment: and more importantly, what the threshold limit is.
Miss a threshold, and you either deduct TDS when you shouldn't (tying up cash unnecessarily) or fail to deduct when you should (triggering disallowance under Section 40(a)(ia) and penalties). Either way, you lose.
This guide consolidates TDS threshold limits for all major sections (194A to 194T) into one quick reference chart for FY 2026-27. Bookmark this: you will come back to it.
Quick Reference: TDS Threshold Limits at a Glance
| Old Section | Nature of Payment | New Section (ITA 2025) | Threshold Limit | TDS Rate |
|---|---|---|---|---|
| 192 | Salary | 392(1) | Basic Exemption Limit | Slab Rates |
| 192A | Premature EPF Withdrawal | 392(7) | Rs 50,000 | 10% |
| 193 | Interest on Securities | 393(1)[5(i)] | Rs 10,000 | 10% |
| 194 | Dividends (individual shareholder, non-cash) | 393(1)[7] with 393(4)[10] | Rs 10,000 | 10% |
| 194A | Interest - Senior Citizens | 393(1)[5(ii)] | Rs 1,00,000 | 10% |
| 194A | Interest - Others (Bank/PO) | 393(1)[5(ii)] | Rs 50,000 | 10% |
| 194A | Interest - Other than Bank/PO | 393(1)[5(iii)] | Rs 10,000 | 10% |
| 194B | Lottery / Crossword Winnings | 393(3)[1] | Rs 10,000 | 30% |
| 194BA | Online Gaming Winnings | 393(3)[2] | No Threshold | 30% |
| 194BB | Horse Race Winnings | 393(3)[3] | Rs 10,000 | 30% |
| 194C | Contractor - Individual/HUF | 393(1)[6(i)] | Rs 30,000 single / Rs 1,00,000 aggregate | 1% |
| 194C | Contractor - Others | 393(1)[6(i)] | Rs 30,000 single / Rs 1,00,000 aggregate | 2% |
| 194D | Insurance Commission | 393(1)[1(i)] | Rs 20,000 | 2% (non-company), 10% (domestic company) |
| 194DA | Life Insurance Maturity | 393(1)[8(i)] | Rs 1,00,000 | 2% |
| 194EE | National Savings Scheme | 393(3)[6] | Rs 2,500 | 10% |
| 194G | Lottery Commission | 393(3)[4] | Rs 20,000 | 2% |
| 194H | Commission / Brokerage | 393(1)[1(ii)] | Rs 20,000 | 2% |
| 194I(a) | Rent - Plant, Machinery | 393(1)[2(ii)] | Rs 50,000 per month | 2% |
| 194I(b) | Rent - Land, Building | 393(1)[2(ii)] | Rs 50,000 per month | 10% |
| 194IA | Immovable Property Purchase | 393(1)[3(i)] | Rs 50,00,000 or more | 1% |
| 194J | Professional Services | 393(1)[6(iii)] | Rs 50,000 | 10% |
| 194J | Technical Services | 393(1)[6(iii)] | Rs 50,000 | 2% |
| 194Q | Purchase of Goods | 393(1)[8(ii)] | Rs 50,00,000 | 0.1% |
| 194T | Partner Payments | 393(3)[7] | Rs 20,000 | 10% |
How the FY 2026-27 TDS Framework Has Changed
From 1 April 2026 (Tax Year 2026-27), the Income Tax Act, 2025 applies. The familiar Section 194 series has been consolidated:
| Old Framework | New Framework (ITA 2025) |
|---|---|
| Section 192 | Section 392 - Salary TDS |
| Sections 194A to 194T | Section 393 - Non-Salary TDS |
| Section 206C | Section 394 - TCS |
This is a structural recodification, not a policy overhaul. The rates and thresholds for FY 2026-27 are largely unchanged, but the section numbers, form numbers, and payment codes are entirely new.
Most of these limits were set a year earlier; our TDS threshold changes from Budget 2025 for FY 2025-26 shows the before and after for rent, professional fees and interest.
Practical implication: When filing TDS returns for TY 2026-27, you must report payments under the new Section 393 references and the payment codes prescribed for the new return forms, rather than the old section numbers.
Section-by-Section Breakdown
Section 194A: TDS on Interest
| Recipient Category | Threshold Limit | TDS Rate |
|---|---|---|
| Senior Citizens (60+ years) | Rs 1,00,000 per year | 10% |
| Other Individuals (bank/post office) | Rs 50,000 per year | 10% |
| Other Cases (non-bank/non-post office) | Rs 10,000 per year | 10% |
Key point: The threshold applies to the aggregate interest from all deposits with a bank or post office.
Section 194C: TDS on Contractor Payments
| Contractor Type | Threshold Limit | TDS Rate |
|---|---|---|
| Individual / HUF | Rs 30,000 single OR Rs 1,00,000 aggregate | 1% |
| Others (Company/Firm/LLP) | Rs 30,000 single OR Rs 1,00,000 aggregate | 2% |
Threshold rule: TDS is required if either (a) a single payment exceeds Rs 30,000, OR (b) the aggregate payments in a financial year exceed Rs 1,00,000.
Section 194H: TDS on Commission / Brokerage
| Threshold Limit | TDS Rate |
|---|---|
| Rs 20,000 per year | 2% |
TDS applies when the aggregate commission or brokerage payments exceed Rs 20,000 in a financial year.
Section 194I: TDS on Rent
| Asset Type | Threshold Limit | TDS Rate |
|---|---|---|
| Plant, Machinery, Equipment | Rs 50,000 per month | 2% |
| Land, Building, Furniture | Rs 50,000 per month | 10% |
Key point: The threshold is Rs 50,000 per month: not per year. If rent exceeds this in any month, TDS applies for that month.
Section 194J: TDS on Professional & Technical Fees
| Service Type | Threshold Limit | TDS Rate |
|---|---|---|
| Professional Services | Rs 50,000 per year | 10% |
| Technical Services | Rs 50,000 per year | 2% |
Key update: The threshold was increased from Rs 30,000 to Rs 50,000. TDS applies when the aggregate payment to a professional/technical service provider exceeds Rs 50,000 in a financial year.
Section 194Q: TDS on Purchase of Goods
| Threshold Limit | TDS Rate |
|---|---|
| Rs 50,00,000 (Rs 50 lakh) per seller per year | 0.1% |
TDS applies on purchase of goods when the aggregate purchase from a resident seller exceeds Rs 50 lakh in a financial year.
Section 194T: TDS on Partner Payments
| Threshold Limit | TDS Rate |
|---|---|
| Rs 20,000 per year | 10% |
TDS applies on payments of salary, remuneration, commission, bonus, or interest to partners of a firm when the aggregate payment exceeds Rs 20,000 in a financial year. Drawings and capital withdrawals are not covered.
What Happens If You Exceed the Threshold?
Once the threshold is crossed:
- TDS must be deducted on the entire amount (not just the excess over threshold)
- Deduct at the time of payment or credit, whichever is earlier
- Deposit TDS by the 7th of the following month (or 30th April for March payments)
Consequences of non-deduction:
- Expense may be disallowed under Section 40(a)(ia)
- Interest under Section 201(1A)
- Penalty under Section 271C
Common Threshold Mistakes to Avoid
| Mistake | Why It's Wrong | How to Avoid |
|---|---|---|
| Not tracking aggregate payments | Many sections apply when total for the year exceeds the threshold | Maintain a vendor-wise payment register |
| Deducting only on the excess | TDS applies on the entire amount once threshold is crossed | Deduct on full payment once threshold is breached |
| Using old section numbers for FY 2026-27 | ITA 2025 has new payment codes | Update your ERP/software with new codes |
| Missing the threshold for rent | Rent threshold is per month, not per year | Check rent payment each month |
| Not applying the senior citizen threshold | Rs 1,00,000 for seniors vs Rs 50,000 for others | Verify age of the payee before applying threshold |
Where Tax Garden Helps
Managing TDS thresholds across multiple vendors, tracking aggregate payments, and ensuring correct deduction and deposit can be overwhelming. A single missed threshold can lead to disallowance and penalties.
Tax Garden's filing team helps you:
- Identify the correct TDS section and threshold for every payment
- Track aggregate payments to avoid threshold breaches
- File TDS returns and issue Form 131 (non-salary TDS certificate, formerly Form 16A)
- Respond to TDS notices and assessments
- Update your ERP/software with new payment codes for FY 2026-27
Sources: Income Tax Department (incometaxindia.gov.in); TaxGuru; Income Tax Act, 2025; CBDT Notifications. Verify current rates, thresholds, and procedures on incometaxindia.gov.in before acting, as rules may be updated periodically. This article is general information on TDS threshold limits and not a substitute for professional advice.
