TDS Rules 2026: Rent, Salary and Professional Fees Under Section 393

The TDS rules 2026 come from the Income-tax Act, 2025, in force from 1 April 2026: TDS on salary is in section 392, almost every other payment (rent, professional fees, contracts, property purchase, interest) is in one table in section 393, and TCS is in section 394. The key thresholds largely carried over: rent above ₹50,000 a month, professional fees above ₹50,000, property of ₹50 lakh or more at 1%, and bank interest above ₹50,000 a year (₹1 lakh for senior citizens). Salary TDS has no fixed threshold; the employer deducts at the average rate on your estimated income.

TDS rules 2026: what changed and what did not

TDS is not a separate tax: the payer deposits part of your payment against your PAN, and you claim credit in your return. The 2025 Act moved salary from section 192 to 392, folded sections 193 to 194T into rows of the section 393 table, and put TCS in section 394. Most rates and thresholds were carried over. See Income-tax Act 2025 key changes.

Forms changed too: Form 130 (was 16), 131 (16A), 168 (26AS), 121 (15G and 15H), 128 (13).

TDS rules 2026 for salary: section 392

Your employer estimates your income for the year and deducts tax monthly at the average rate, using the regime you indicate (the new regime if you say nothing) and, in the old regime, your rent receipts and investment proofs. If you change jobs, declare the previous salary: Deepak, who moved from Indore to Pune in October 2026 without doing so, got the lower slabs twice and owed tax with interest at the year end. Form 130 is issued by 15 June after the tax year. Choosing between the regimes is explained in our new vs old tax regime 2026-27 guide.

TDS rules 2026 for rent

A salaried tenant. Sunita, not a specified person, rents a Bengaluru flat for ₹65,000 a month, so she deducts 2% under the section 393 table. She should:

1. collect the landlord’s PAN and record it in the rent agreement;
2. deduct 2% at the time the current Form 141 instructions prescribe;
3. pay through Form 141 on the e-filing portal, quoting both PANs, without a TAN;
4. give the landlord the certificate.

A business tenant deducts 10% (land, building, furniture) or 2% (plant and machinery) above ₹50,000 a month. For a non-resident landlord, higher TDS applies; take a CA’s help.

TDS on professional fees, contracts and property

Professional fees. Imran, an architect in Ahmedabad, bills a private company ₹4,00,000. The company deducts 10% (₹40,000) because fees exceed ₹50,000, and pays him ₹3,60,000. Imran reports ₹4,00,000 as income and claims ₹40,000 as credit once it shows in Form 168. An individual client who is not a specified person deducts 2% only if payments for contract work and fees cross ₹50 lakh in the year.

Contractors. Rates and limits are in the table above. The Finance Act, 2026 clarified that supply of manpower is “work”, so contractor rates apply.

Buying property. For property of ₹50 lakh or more, the buyer deducts 1% of the higher of price or stamp duty value and pays through Form 141 within 30 days from the end of the month of deduction. Joint buyers test the threshold on the total price. For a non-resident seller, higher TDS applies; from 1 October 2026, the Finance Act, 2026 removed the TAN requirement for resident individual and HUF buyers in such cases. See NRI selling property in India: TDS and tax.

PAN, nil TDS and the deductor’s duties

• No valid PAN generally means TDS at a higher rate. Keep PAN linked with Aadhaar.
• Form 121: no-TDS declaration on interest where income is below the taxable limit (or a senior citizen’s tax is nil). A false declaration is an offence.
• Form 128: application for a lower or nil deduction certificate.
• Deductors deposit by the 7th of the next month (March by 30 April), file quarterly statements (Form 140 due 31 July, 31 October, 31 January and 31 May) and issue Form 131. Defaults bring interest, fees and disallowance of the expense.

For your own case, consult a chartered accountant.

Frequently asked questions

What are the TDS rules 2026 for rent?

Under the section 393 table of the Income-tax Act, 2025, an individual or HUF tenant who is not a specified person deducts 2% where rent exceeds ₹50,000 a month and pays it through Form 141 using PAN. Businesses and other specified persons deduct 10% on rent of land, building or furniture above ₹50,000 a month, and 2% on plant and machinery.

What is the TDS limit for professional fees in 2026?

A specified person deducts TDS at 10% on fees for professional services where the payment exceeds ₹50,000, under the section 393 table. Fees for technical services and some other cases are at 2%. Directors’ fees have no threshold.

Which section is TDS on salary under the new Income-tax Act?

Section 392 of the Income-tax Act, 2025, replacing old section 192. The employer deducts monthly at the average rate and issues Form 130 (old Form 16).

Is TDS on bank FD interest still ₹50,000?

Yes. Banks and post offices deduct TDS where interest exceeds ₹50,000 a year (₹1 lakh for senior citizens). If your income is below the taxable limit, submit Form 121.

Quick quiz

Learn the TDS rules 2026, returns, notices and GST: New Income-tax Act 2025 and GST Basics certificate course (a certificate of completion, not a professional qualification).

Sources

• Income-tax Act, 2025: s.392 (salary), s.393(1) and its Table (rent, professional fees, contracts, property, interest), s.394 (TCS)
• Income-tax Rules, 2026: Forms 121, 128, 130, 131, 138, 140, 141, 168
• Finance Act, 2026 (manpower supply as “work”; TAN relief for resident individual and HUF buyers from non-residents from 1 October 2026)

This page is for education and general information, not tax or legal advice for a specific case. Consult a chartered accountant for your own deductions. Law as on 31 October 2026.