Summary of Key TDS Rates (FY 2025-26 & 2026-27)
| Section | Nature of Payment | TDS Rate | Threshold (p.a.) |
|---|---|---|---|
| 194J | Professional Fees (Legal, Consulting, CA) | 10% | ₹30,000 |
| 194J | Fees for Technical Services (FTS) | 2% | ₹30,000 |
| 194C | Contractor / Advertising (Individual) | 1% | ₹30,000 (single) / ₹1,00,000 (aggregate) |
| 194C | Contractor / Work Contract (Company/LLP) | 2% | ₹30,000 (single) / ₹1,00,000 (aggregate) |
| 194H | Commission & Brokerage | 5% | ₹15,000 |
Frequently Asked Questions
Is TDS deducted on the GST component of an invoice?
No. According to CBDT Circular No. 23/2017, TDS under Chapter XVII-B of the Income Tax Act must be deducted strictly on the basic value of goods or services, provided the GST component is indicated separately on the invoice.
What is the difference between 194J (10%) and 194J (2%)?
TDS on professional fees (legal, medical, accountancy, architectural, management consulting) is deducted at 10%. However, fees for technical services (FTS), royalty, and call centre operations attract a reduced TDS rate of 2%.
When does an enterprise buyer have to deposit TDS?
TDS deducted during any month must be deposited to the government treasury via Challan ITNS 281 by the 7th of the following month (except for March deductions, which can be deposited up to April 30th).