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 | 393(1)[7] | No Limit | 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 | 5% |
| 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(1)[1(iii)] | 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 | 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(1)[9] | Rs 50,000 | 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.
Practical implication: When filing TDS returns for TY 2026-27, you must use the new payment codes (e.g., 1027 for professional fees) 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 50,000 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 50,000 in a financial year.
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 CAs help you:
- Identify the correct TDS section and threshold for every payment
- Track aggregate payments to avoid threshold breaches
- File TDS returns and issue Form 16A
- Respond to TDS notices and assessments
- Update your ERP/software with new payment codes for FY 2026-27
Frequently Asked Questions
Q: What is the TDS threshold for professional fees in FY 2026-27?
A: Rs 50,000 per year under Section 194J. TDS applies when the aggregate payment to a professional exceeds Rs 50,000 in a financial year.
Q: What is the TDS threshold for rent under Section 194I?
A: Rs 50,000 per month. If rent exceeds this in any month, TDS applies for that month.
Q: What is the TDS threshold for contractor payments?
A: Rs 30,000 for a single contract OR Rs 1,00,000 aggregate in a financial year.
Q: What is the TDS threshold for purchase of goods under Section 194Q?
A: Rs 50,00,000 (Rs 50 lakh) per seller per financial year. TDS applies at 0.1% once aggregate purchases exceed this limit.
Q: What is the TDS threshold for commission under Section 194H?
A: Rs 20,000 per year. TDS applies when aggregate commission payments exceed this limit.
Q: Do I need to deduct TDS if the payment is exactly at the threshold?
A: No. TDS is required only when the payment exceeds the threshold limit.
Q: How do I know which threshold applies to senior citizens?
A: For interest under Section 194A, the threshold is Rs 1,00,000 for senior citizens (60+ years) and Rs 50,000 for others.
Q: What happens if I use the old section number in a challan for FY 2026-27?
A: Old section codes filed for the new year will trigger validation errors. You must use the new payment codes (e.g., 1027 for professional fees).
Q: What is the due date for depositing TDS?
A: TDS must be deposited by the 7th of the following month. For payments made in March, the deadline is 30th April.
Q: Can I claim credit for TDS deducted if the deductor didn't deposit it?
A: Under Section 205, where tax has been deducted, the department cannot recover it again from the deductee. However, the credit may not reflect in Form 26AS until the deductor deposits it. Always follow up with the deductor.
Q: What is the new section number for TDS on contractor payments under ITA 2025?
A: Section 194C → Section 393(1)[6(i)] (effective 1 April 2026).
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.
