TDS for CA, CS and CMA Students: Rates, Thresholds and Due Dates 2026-27

A wrong threshold or a half-remembered rate is enough to turn a well-set-out TDS answer into a low score. Tax deducted at source comes up in every CA, CS and CMA tax paper, and the figures changed with the last two Finance Acts and then moved into a new Act. This guide puts the rates, thresholds and due dates for tax year 2026-27 in one place, followed by the traps examiners set and a short revision plan.

Rent TDS now has a monthly test of Rs 50,000, not an annual one, and that applies to both old 194I and 194IB. If your notes still say Rs 2.4 lakh or Rs 6 lakh a year, update them.

Which papers test TDS?

• CA Intermediate: Paper 3A, Income-tax Law. CA Final: Paper 4, Direct Tax Laws and International Taxation.
• CS Executive: Paper 7, Tax Laws and Practice. At CS Professional, only students who take the elective Paper 4.5, Advanced Direct Tax Laws and Practice, meet it again.
• CMA Intermediate: Paper 7, Direct and Indirect Taxation. CMA Final: Paper 15, Direct Tax Laws and International Taxation.

Questions usually test three things: does TDS apply at all (the threshold), at what rate (including the no-PAN rate), and what a default costs (interest, late fee, disallowance, penalty). Our posts on CS Executive Tax Laws weightage and CMA Final tax preparation show how much of each paper this area carries.

Outside the exam hall, TDS is a monthly job for every business. Deducting the right amount, depositing it on time and filing the quarterly statement are part of company compliances, along with GST returns and ROC filings. Seeing TDS as a set of dates makes the theory easier to hold on to.

What changed with the Income-tax Act, 2025?

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, starting with tax year 2026-27. For TDS the change is mostly one of layout. Salary TDS is in section 392. TDS on other payments is in the tables of section 393: one for payments to residents, one for non-residents, one for payments by any person, and one listing when no tax is deducted. Tax collected at source is in section 394.

• Payments or credits made up to 31 March 2026 stay under the 1961 Act and its section numbers.
• Payments or credits from 1 April 2026 fall under the 2025 Act.

Rates and thresholds were largely carried forward, which is why most people still say 194C or 194J. ICAI has said the 2025 Act applies from the May 2027 exams to CA Intermediate Paper 3A and CA Final Paper 4; our post on the Income-tax Act, 2025 for CA Final explains what that means for your notes. Follow your own institute's announcement for your attempt.

TDS rates and thresholds for residents, tax year 2026-27

The list keeps the old section numbers because most study material and question papers still use them. Under the 2025 Act each is an entry in the section 393 tables.

• 192 (now 392), salary: average rate at the normal slab rates. TDS arises only when estimated income is above the exemption limit.
• 193, interest on securities: 10%, threshold Rs 10,000.
• 194, dividend: 10%. No TDS where an individual shareholder is paid other than in cash and dividends for the year are not above Rs 10,000.
• 194A, other interest: 10%. Threshold Rs 50,000 from a bank, co-operative bank or post office (Rs 1 lakh for senior citizens), Rs 10,000 from other payers.
• 194B, lottery, crossword or card-game winnings: 30% on any single winning above Rs 10,000.
• 194BA, online game winnings: 30% on net winnings, no threshold.
• 194C, contractors: 1% (individual or HUF), 2% (others). Threshold Rs 30,000 for a single payment or Rs 1 lakh in the year.
• 194D, insurance commission: 2% where the payee is not a company, threshold Rs 20,000.
• 194G, commission on lottery tickets: 2%, threshold Rs 20,000.
• 194H, commission or brokerage: 2%, threshold Rs 20,000.
• 194I, rent: 2% for plant and machinery, 10% for land, building or furniture. Threshold Rs 50,000 for a month or part of a month.
• 194IA, transfer of immovable property other than agricultural land: 1% where the consideration is Rs 50 lakh or more.
• 194IB, rent paid by an individual or HUF not liable to deduct under 194I: 2%, threshold Rs 50,000 for a month or part of a month.
• 194J, professional fees: 10%, threshold Rs 50,000. Fees for technical services, call centres and film royalty: 2%, threshold Rs 50,000. Director's fees or remuneration (not salary): 10% with no threshold.
• 194LA, compensation on compulsory acquisition of immovable property: 10%, threshold Rs 5 lakh.
• 194M, contract work, commission or professional fees paid by an individual or HUF not liable under 194C, 194H or 194J: 2% above Rs 50 lakh in the year.
• 194N, cash withdrawal: 2% on cash withdrawn above Rs 1 crore in the year (Rs 3 crore for a co-operative society).
• 194O, e-commerce operator: 0.1% of gross sales. No TDS for an individual or HUF seller with gross sales up to Rs 5 lakh who has given PAN or Aadhaar.
• 194Q, purchase of goods: 0.1% on the amount above Rs 50 lakh in the year.
• 194R, business perquisites: 10%, threshold Rs 20,000.
• 194S, transfer of virtual digital assets: 1%. Threshold Rs 50,000 for specified persons, Rs 10,000 for others.
• 194T, salary, remuneration, interest, bonus or commission paid by a firm to a partner: 10%, threshold Rs 20,000.

Source: CBDT, TDS rates for tax year 2026-27, and the section 393 tables of the Income-tax Act, 2025 as amended by the Finance Act, 2026.

If the payee does not give a PAN, tax is generally deducted at 20% or the table rate, whichever is higher. The higher rate for non-filers under old section 206AB was removed by the Finance Act, 2025. To try a few payment scenarios quickly, use TaxHelpdesk's TDS page, which works out the deduction from the nature of payment and the amount.

Mistakes that cost marks

• A threshold is a trigger, not a deduction. Once the limit is crossed, TDS usually applies to the whole amount. Section 194Q is the clear exception: tax is deducted only on the amount above Rs 50 lakh.
• 194C has two tests. TDS applies if a single payment is above Rs 30,000, or if payments to the same contractor add up to more than Rs 1 lakh in the year, even when no single bill crossed Rs 30,000.
• 194J has two rates. Professional fees attract 10% and technical services 2%. Read the nature of the service before you pick one.
• 194I and 194IB both use the Rs 50,000 monthly test. The difference is the payer: 194I applies to everyone other than individuals and HUFs, and to individuals and HUFs whose accounts must be audited; 194IB covers the other individuals and HUFs, who deduct once, in the last month of the year or of the tenancy.
• 194T is recent. Payments by a firm to its partners were outside TDS before 1 April 2025, so expect it in new questions and mock tests.
• GST on the invoice. Under CBDT Circular No. 23/2017, where GST on services is shown separately in the agreement or invoice, TDS is worked out on the amount excluding GST. Apply this only when the question gives the split.

Worked example: payments to a contractor

A private limited company pays an individual contractor Rs 40,000 in one bill and Rs 70,000 in another later in the year. The first bill is above Rs 30,000, so TDS at 1% applies: Rs 400. The second bill is also covered, and the yearly total of Rs 1,10,000 has crossed Rs 1 lakh anyway: TDS at 1% is Rs 700. Total TDS for the year is Rs 1,100. Had the contractor been a company, the rate would have been 2% on each bill.

When must the tax be deposited?

• Tax deducted in a month: by the 7th of the next month.
• Tax deducted in March: by 30 April.
• Old 194IA, 194IB, 194M and 194S: within 30 days from the end of the month of deduction, through the challan-cum-statement.
• Government offices paying without a challan: the same day.

Quarterly TDS statement due dates

• Q1, April to June: 31 July.
• Q2, July to September: 31 October.
• Q3, October to December: 31 January.
• Q4, January to March: 31 May.

Certificates follow the statements. The annual salary certificate is due by 15 June after the year ends, and certificates for other payments within 15 days of the statement due date. The Income-tax Rules, 2026 renumbered the forms, so check the form name your study material uses before you write a practical answer.

What happens when a deductor defaults?

• Interest: 1% a month for late deduction and 1.5% a month for late payment, for every month or part of a month.
• Late fee: Rs 200 a day until the statement is filed, capped at the TDS amount.
• Penalty: Rs 10,000 to Rs 1,00,000 for not filing the statement on time or for wrong information in it. There is no penalty for delay if the tax, fee and interest are paid and the statement is filed within one month of the due date.
• Disallowance: 30% of a sum payable to a resident is disallowed in business income if TDS is not deducted, or is deducted but not paid by the return due date. It is allowed in the year the tax is paid.
• Prosecution is now graded: up to two years' imprisonment where the unpaid TDS is above Rs 50 lakh, up to six months where it is above Rs 10 lakh and up to Rs 50 lakh, and a fine in other cases. There is no prosecution if the tax is paid by the due date of the quarterly statement.

The 2025 Act moved these to new section numbers, and the prosecution rules are softer than the old 276B. Learn the consequence first, then quote the section number your syllabus uses.

A short revision plan

1. Group the sections: contractors and professionals (194C, 194J, 194M), income-type payments (193, 194, 194A), property and transactions (194I, 194IA, 194IB, 194Q, 194S).
2. Make a one-page calendar of deposit dates, statement dates and penalties, and revise it every week.
3. Solve at least five past questions for each section that needs working.
4. Write a timed mock paper and get it checked, so you see exactly where marks slip on thresholds and rates. Gradehunt's CA Inter test series covers Paper 3A Income-tax Law with checked answer sheets.

TDS rewards precision. Know the section, rate, threshold and due date for each payment, and be ready to explain what follows when a deductor misses one. Rates can change with every Finance Act, so check the figures against CBDT's latest rates and your institute's study material before the exam.