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Master Schedule: Special Tax Rates & TDS Chart (AY 2026-27)
A comprehensive, section-wise breakdown of Special Income Tax Rates and Tax Deducted at Source (TDS) designed for flawless statutory compliance in Financial Year 2025-26.
Strategic Tax Compliance for FY 2025-26
Accurate application of the Income Tax Act is fundamental to robust financial planning and reporting. This dual-schedule guide integrates Special Tax Rates (applicable to distinct revenue streams such as capital gains and speculative income) with the updated TDS (Tax Deducted at Source) Rate Chart for Assessment Year 2026-27. Maintaining precision in these deductions prevents severe penalties, disallowance of expenses under Section 40(a)(ia), and safeguards corporate cash flow.
Part A: Special Income Tax Rates (Capital Gains & Specified Incomes)
Incomes classified under these sections bypass standard slab rates and are subjected to flat percentage taxation. Note that enhanced surcharges are capped at 15% for income chargeable under sections 111A, 112, 112A, and Dividend Income.
| Section | Nature of Income / Description | Special Rate (%) |
|---|---|---|
| 111A | Short Term Capital Gains (STCG) on listed equity shares or equity-oriented mutual funds. | 15% |
| 112 | Long Term Capital Gains (LTCG) on assets, excluding those covered under Sec 112A. | 20% |
| 112A | LTCG on listed equity shares / mutual funds. | 10% |
| 115BB | Winnings from lotteries, crossword puzzles, races (including horse races), card games, and online games. | 30% |
| 115BBE | Unexplained cash credits, investments, or expenditures (Sections 68, 69, 69A, etc.). | 60% |
| SCHEDULE SI INCOME CHARGEABLE TO INCOME TAX AT SPECIAL RATES | ||
|---|---|---|
| Sl. No. | Section/Description | Special rate (%) |
| 1 | 111- Tax on accumulated balance of recognized provident fund | 1 |
| 2 | 111A - STCG on shares units on which STT paid as applicable. | 20 |
| 3 | 112 - LTCG on Others | 12.5 |
| 4 | 112(1) (LTCG on listed securities/ units without indexation) | 12.5 |
| 5 | 112(1)(c)(iii)- Long term capital gains on transfer of unlisted securities in the case of non- residents | 12.5 |
| 112A - LTCG on sale of shares | ||
| 6 | /units of equity oriented fund/units of business trust on which STT is paid | 12.5 |
| 7 | 115A(1)(a)(i)- Dividends from units purchased in foreign currency for non-residents | 20 |
| 8 | 115A(1)(a)(A) - Dividend received by non-resident (not being company) or foreign company from a unit in an International | 10 |
| Financial Services Centre, as referred to in sub-section (1A) of section 80LA | ||
| 9 | 115A(1)(a)(ii) - Interest received from govt/Indian Concerns received in Foreign Currency by non-residents | 20 |
| 10 | 115A(1)(a)(iia) - Interest received by non-resident from infrastructure debt fund | 5 |
| 11 | 115A(1) (a)(iiaa) - Income received by non-resident as referred in section 194LC(1) | 5 |
| 12 | 115A(1)(a)(iiab) - Income received by non-resident as referred in section 194LD | 5 |
| 13 | 115A(1)(a)(iiac) - Income received by non-resident as referred in section 194LBA | 5 |
| 14 | 115A(1) (a)(iii) - Income from units purchased in foreign currency in case of non-residents | 20 |
| 15 | 115A(1)(b)- Income from royalty or fees for technical services received from Government or | 20 |
| Indian concern | ||
| 16 | 115AC(1)(a) - Income by way of interest on bonds purchased in foreign currency -non-resident | 10 |
| 17 | 115AC(1)(c) - Long term capital gains arising from their transfer of bonds or GDR purchased in foreign currency in case of a non-resident | 12.5 |
| 115ACA(1)(a) - Income by way of | ||
| 18 | Dividends from GDR purchased in foreign currency in case of a resident employee of an Indian company, engaged in knowledge based industry or service | 10 |
| 19 | 115ACA(1)(b) - Long term capital gains arising from the transfer of GDR purchased in foreign currency | 12.5 |
| -resident | ||
| 20 | 115AD(1)(i) - Income (other than dividend) received by an FII in respect of securities (other than units referred to in section115AB) | 20 |
| 21 | 115AD(1)(i) - Income (being dividend) received by an FII in respect of securities (other than units referred to in section 115AB) | 20 |
| 115AD(1)(i) - Income by way of | ||
| 22 | Interest received by an FII in respect of bonds or government securities referred to in section | 5 |
| 194LD | ||
| 23 | 115AD(1)(ii) - Short term capital gains (other than on equity share or equity oriented mutual fund referred to in section 111A) by an | 30 |
| FII | ||
| 24 | 115AD(1)(b)(iii) - Long term capital gains (other than on equity share or equity oriented mutual fund referred to in section 112A) by an | 12.5 |
| FII | ||
| 115AD(1)(b)(iii) Proviso- For NON- | ||
| 25 | RESIDENTS from sale of equity share in a company or unit of equity oriented fund or unit of a business trust on which STT is paid under section 112A | 12.5 |
| 26 | 115AD(1)(b)(ii) - Proviso - Short term capital gains referred to in section 111A rws. 115AD by FII, as applicable u/s 115AD(1)(b)(ii) | 20 |
| 27 | 115BB - Winnings from lotteries, crosswords puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever | 30 |
| 28 | 115BBJ - Winnings from online games | 30 |
| 29 | 115BBA - Income received by non- resident sportsmen or sports associations or entertainer | 20 |
| 115BBH - Income from transfer of | ||
| 30 | Virtual Digital Assets (Income under the head Capital Gain) | 30 |
| 115BBH - Income from transfer of | ||
| 31 | Virtual Digital Assets (Income under head business or profession) | 30 |
| 32 | 115BBE - Tax on income under section 68, 69, 69A, 69B, 69C or | 60 |
| 69D. | ||
| 33 | 115BBF - Tax on income from patent(Income under head other sources) | 10 |
| 34 | 115BBF - Tax on income from patent(Income under head business or profession) | 10 |
| 35 | 115BBG - Tax on income from transfer of carbon credits(Income under head other sources) | 10 |
| 36 | 115BBG - Tax on income from transfer of carbon credits(Income under head business or profession) | 10 |
| 37 | 115E(a) - Investment income of a non-resident Indian | 20 |
| 38 | 115E(b) - Long term capital gains of a non-resident Indian on any foreign exchange asset | 12.5 |
| 39 | STCG Chargeable at special rates in India as per DTAA | 1 |
| 40 | LTCG Chargeable at special rates in India as per DTAA | 1 |
| 41 | Other source income chargeable under DTAA rates | 1 |
| 42 | Pass Through Income in the nature of Short Term Capital Gain chargeable @ 20% | 20 |
| 43 | Pass Through Income in the nature of Short Term Capital Gain chargeable @ 30% | 30 |
| 44 | Pass Through Income in the nature of Long Term Capital Gain chargeable @ 12.5% u/s 112A | 12.5 |
| 45 | Pass Through Income in the nature of Long Term Capital Gain chargeable @ 12.5% other than u/s 112A | 12.5 |
| 46 | PTI-115A(1)(a)(i)- Dividends from units purchase in foreign currency by non-residents | 20 |
| PTI- 115A(1)(a)(A)-proviso - | ||
| Dividend received by non-resident | ||
| 47 | (not being company) or foreign company from a unit in an | 10 |
| International Financial Services | ||
| Centre, as referred to in sub- section (1A) of section 80LA. | ||
| 48 | PTI-115A(1)(a)(iia) - Interest received by non-resident from infrastructure debt fund | 5 |
| 49 | PTI -115A(1)(a)(iiaa)- Income received by non-resident as referred in section 194LC(1) @ 5% | 5 |
| 50 | PTI -115A(1)(a)(iiac)- Income received by non-resident as referred in section 194LBA | 5 |
| 51 | PTI -115A(1)(a)(iii)- Income from units of UTI purchased in foreign currency in the case of non- residents | 20 |
| 52 | PTI -115A(1)(b)-Income from royalty or fees for technical services received from | 20 |
| Government or Indian concern. | ||
| 53 | PTI -115AC(1)(a)- Income by way of interest on bonds purchased in foreign currency - Non-residents | 10 |
| 54 | PTI -115AC(1)(b) - Income by way of dividend on GDR purchased in foreign currency | 10 |
| PTI -115ACA(1)(a)- Income from | ||
| 55 | GDR purchased in foreign currency | 10 |
| - resident | ||
| 56 | PTI -115AD(1)(i)- Income (other than dividend) received by an FII in respect of securities (other than units referred to in section115AB) | 20 |
| PTI -115AD(1)(i)- Income by way of | ||
| 57 | Interest received by an FII in respect of bonds or government securities referred to in section | 5 |
| 194LD | ||
| 58 | PTI -115BBA- Income received by non-resident sportsmen or sports associations or entertainer | 20 |
| 59 | PTI - 115BBG- Tax on income from transfer of carbon credits. | 10 |
| 60 | PTI -115E(a)- Investment income of a non-resident Indian | 20 |
Professional Insight: Surcharge and Health & Education Cess (4%) must be added to the above special rates to arrive at the effective tax liability. Incorporate these precise inputs into your tax planning dashboards to ensure accurate forecasting.
Part B: TDS Rate Chart for FY 2025-26 (AY 2026-27)
The table below highlights critical TDS rates effective for the current financial year. Notably, Section 194H (Commission/Brokerage) reflects a 2% deduction rate, and Section 194J requires careful bifurcation between technical services (2%) and professional fees (10%).
| Section | Nature of Payment | TDS Rate (%) |
|---|---|---|
| 192 | Payment of Salary | Applicable Slab Rates |
| 192A | Premature withdrawal of accumulated balance of provident fund (EPF). | 10% |
| 194BA / 194BB | Winnings from online games and horse races. | 30% |
| 194C | Payments to contractors and sub-contractors. | 1% (Ind/HUF) / 2% (Others) |
| 194DA | Payment in respect of a life insurance policy. | 2% |
| 194H | Commission or Brokerage. | 2% |
| 194I(a) | Rent for Plant & Machinery. | 2% |
| 194I(b) | Rent for Land, Building, Furniture, or Fittings. | 10% |
| 194J(a) | Fees for Technical Services, Call Center, Royalty. | 2% |
| 194J(b) | Fees for Professional Services and Directors’ Remuneration. | 10% |
| 194Q | Payment for purchase of goods exceeding Rs. 50 lakhs. | 0.1% |
