If your business pays contractors, professionals, rent or interest, you are probably a 'deductor' with monthly TDS duties. Get the rates or the dates wrong and it costs you interest and penalties. Here is the practical guide for FY 2026-27.
Section numbers below are the familiar ones from the Income-tax Act, 1961. From 1 April 2026 the Income-tax Act, 2025 consolidates most non-salary TDS under Section 393 — the rates and thresholds carry over unchanged.
The rates that matter for small businesses
| Payment | Rate | When TDS kicks in |
|---|---|---|
| Contractors / sub-contractors (194C) | 1% — individuals & HUFs 2% — companies, firms, LLPs | Single contract over ₹30,000, or over ₹1 lakh in a year |
| Professional fees (194J) | 10% — professional services 2% — technical services | Over ₹30,000 per payee in a year |
| Rent (194I) | 2% — plant & machinery 10% — land, building, furniture | Business rent over ₹2.4 lakh a year |
| Interest (194A) | 10% | Over ₹40,000 a year (₹50,000 for senior citizens) |
| Commission / brokerage (194H) | 5% | Over ₹15,000 a year |
| Insurance commission (194D) | 5% | Over ₹15,000 a year |
| Lottery winnings (194B) | 30% | Per winning over ₹10,000 |
| Payments to partners (194T) | 10% | Over ₹20,000 a year to a partner — salary, remuneration, bonus, commission or interest |
Salary TDS (Section 192) is deducted every month on the employee's estimated annual income using the slab rates. Note that Section 194T is new from 1 April 2025 — if your firm or LLP pays a partner anything, TDS applies once the ₹20,000 annual limit is crossed, and the rate becomes 20% if the partner has not provided a PAN.
Deposit the TDS on time
Deducted TDS must be deposited with the government by the 7th of the following month. TDS deducted in March is deposited by 30 April. Late deposits attract interest at 1.5% per month — a small slip that quietly compounds, so set a reminder.
File the quarterly returns
Quarterly TDS returns (24Q for salary, 26Q for others) are due on the 31st of the month after each quarter ends:
| Quarter | Due date |
|---|---|
| April – June | 31 July |
| July – September | 31 October |
| October – December | 31 January |
| January – March | 31 May |
After filing, issue Form 16 to employees by 15 June and Form 16A to other deductees within 15 days of filing the return.
Three mistakes to avoid
- Relying on the payee's tax position — TDS is your duty as the deductor even if the payee would owe no tax themselves
- Skipping the PAN check — deduct at 20% when the payee's PAN is not furnished
- Forgetting the March deadline — March TDS has its own date (30 April), not the 7th of the next month
Want it done right the first time?
We handle GST registration, returns and compliance for businesses across Manipur and Mizoram. We prepare the application, keep the documents straight and follow up until your GSTIN is live.
Disclaimer: This article is general information, not professional advice. Rules, rates and thresholds are set by the government and can change with notifications — always verify against the official portals, or ask us before relying on them.
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