TDS Threshold Changes for FY 2026-27: The Raised Limits You Need to Know
2026-06-30 · 6 min read · by a CA firm
A wave of TDS threshold increases came in from 1 April 2025 and now applies for the whole of FY 2026-27. They matter because deducting on an old, lower limit over-deducts and annoys vendors, while missing a new section like 194T under-deducts and invites a notice. Here is the current set, with the earlier figures for comparison.
The raised thresholds at a glance
| Section & payment | Threshold FY 2026-27 | Earlier |
|---|---|---|
| 193 — interest on securities | ₹10,000 | No threshold |
| 194 — dividend | ₹10,000 | ₹5,000 |
| 194A — interest, senior citizens | ₹1,00,000 | ₹50,000 |
| 194A — interest, bank / co-op / post office | ₹50,000 | ₹40,000 |
| 194A — interest, other cases | ₹10,000 | ₹5,000 |
| 194K — mutual fund income | ₹10,000 | ₹5,000 |
| 194D — insurance commission | ₹20,000 | ₹15,000 |
| 194G — lottery commission | ₹20,000 | ₹15,000 |
| 194H — commission / brokerage | ₹20,000 | ₹15,000 |
| 194-IB — rent (individual/HUF, no audit) | ₹50,000/month (rate cut 5%→2%) | ₹50,000/month |
| 194I — rent (business) | ₹50,000/month | ₹2,40,000/year |
| 194J — professional / technical fees | ₹50,000 | ₹30,000 |
| 194LA — compensation on acquisition | ₹5,00,000 | ₹2,50,000 |
| 194B / 194BB — lottery / horse-race winnings | ₹10,000 per transaction | ₹10,000 aggregate/year |
| 194T — partner remuneration / interest (new) | ₹20,000 | — (new from FY 2025-26) |
The changes that catch people out
194A — interest. Banks and others should apply the right slab: ₹1,00,000 for senior citizens, ₹50,000 for ordinary bank/co-op/post-office interest, and ₹10,000 elsewhere. Many systems still run the old ₹40,000/₹5,000 limits.
194I rent — now a monthly test. The business-rent threshold is now ₹50,000 a month rather than ₹2,40,000 a year. Cross ₹50,000 in any month and TDS applies.
194-IB — rate, not threshold. The individual/HUF tenant’s rate fell from 5% to 2%; the ₹50,000-a-month trigger is unchanged. See 194I vs 194-IB.
194J — ₹50,000 now. Professional and technical fees only attract TDS past ₹50,000 for the year (was ₹30,000). The 10%-vs-2% split still applies — see 194J: 10% or 2%.
194T — the brand-new one. Every firm and LLP now deducts 10% on partner remuneration and interest over ₹20,000 a year. There is no turnover exemption — even tiny firms are caught. Full detail in the 194T guide.
And what was removed
Two things are gone, not raised: 206AB / 206CCA (higher TDS for ITR non-filers) and 206C(1H) (TCS on sale of goods), both removed from 1 April 2025. Stop collecting those old declarations — see declarations you no longer need.
Frequently asked questions
Senior-citizen interest threshold? ₹1,00,000 under 194A; ₹50,000 for ordinary bank interest; ₹10,000 otherwise.
Professional fees? ₹50,000 a year under 194J (was ₹30,000).
Rent? 194I ₹50,000/month; 194-IB ₹50,000/month at 2%.
Are these the FY 2025-26 changes? Yes — effective 1 April 2025 and continuing through FY 2026-27, now under the Income-tax Act 2025.
For every section’s exact rate, code and due date, use the FY 2026-27 rate chart and the TDS Wizard. Related: TDS glossary.
General information for FY 2026-27 under the Income-tax Act 2025, not advice on your specific case. Verify against the latest law or talk to a CA.