TDS & TCS Rates
FY 2026-27
CA Devesh Thakur
TDS vs TCS — Quick Concept
TDS — Tax Deducted at Source
Tax is deducted by the payer at the time of making payment and deposited with the government on behalf of the payee.
TCS — Tax Collected at Source
Tax is collected by the seller at the time of receiving payment from the buyer for specified goods/services.
4-Step Decision Framework
Run through these questions before every TDS/TCS deduction to pick the right section and rate.
Important Points to Remember
TDS — Payments to Residents
Section 393(1) & Section 392 — Income-tax Act, 2025 · FY 2026-27
| Section | Nature of Payment | Threshold | Indiv / HUF | Others |
|---|
TDS — Payments to Non-Residents
Section 393(2) — Surcharge & Health/Education Cess applicable additionally. Always verify applicable DTAA rates.
| Section | Nature of Payment | Threshold | Indiv / HUF | Others |
|---|
TDS — Special / Other Payments
Section 393(3) — Winnings, cash withdrawals, lottery commissions, partner payments.
| Section | Nature of Payment | Threshold | Indiv / HUF | Others |
|---|
⚠️ PAN Invalid / Inoperative / Not Available
Deduct at the higher rate below if PAN is missing or inoperative. Always link PAN with Aadhaar.
TCS — Tax Collected at Source [Section 394(1)]
Code 206C · Collected by seller from buyer. Buyer can claim credit in ITR.
| Section | Code | Nature of Collection | Threshold | Indiv / HUF | Others |
|---|
Quick Rate Reference — Most Common
| Payment Type | Threshold | Rate | Section | Type |
|---|
Practical Compliance Tips
6 Golden Rules
Master these rules, and TDS/TCS will never confuse you again. 🎯
Connect with CA Devesh Thakur
CA Devesh Thakur
Chartered Accountant | FCA | Tax Educator · West Delhi, India
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