Section 393 · Collection & recovery
Section 393 of the Income-tax Act, 2025 — Consolidated TDS Table (Rates, Thresholds & Payments Covered)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XIX
📜 What the law says — Section 393, Income-tax Act 2025
393. (1) Where any income or sum of the nature specified in column B of the
Table below, is credited or paid or distributed by the person specified in
column C during the tax year, to a resident, the person responsible for paying such
income or sum shall deduct income-tax,—
(a) on the entire amount of such income or sum, where the amount or
aggregate of amounts exceeds the threshold limit specified in column
D, or on sum as per Note 1 for serial number 8(ii), as the case may be;
(b) at the rate specified in column D;
(c) at the time of credit of such income or sum to the account of the payee
or at the time of its payment in cash or by way of a cheque or a draft or
by any other mode, whichever is earlier; and
(d) subject to the provisions of sub-sections (4), (5), (6), (8) and (9).
TABLE
FOR PAYMENTS TO RESIDENT
Sl. Nature of income or sum Payer Rate
No. Threshold limit
A B C D
1. Commission or brokerage
(i) Any income by way Any person. Rate: Rates in force.
of remuneration or ___________
reward, whether by
way of commission or Threshold limit:
otherwise, for soliciting ` 20,000.
or procuring insurance
business (including
business relating to the
continuance, renewal
or revival of insurance
policies).
(ii) Any income by way of Specified person. Rate: 2%
commission [not being ________
insurance commission
referred to in serial Threshold limit:
number 1(i)] or broker- ` 20,000.
age.
Sl. Nature of income or sum Payer Rate
No. Threshold limit
A B C D
2. Rent
(i) Any income by way of Person other than Rate: 2%
rent.
In plain language
What Section 393 is, in plain English
Section 393 is the single "master" TDS provision of the Income-tax Act, 2025. It applies to sums paid or credited on or after 1 April 2026. Under the old Income-tax Act, 1961, tax deducted at source on non-salary payments was scattered across dozens of separate sections — 194A (interest), 194C (contractors), 194H (commission), 194-I (rent), 194J (professional fees), 194Q (purchase of goods), 194-IA (property), 194S (crypto), and many more. Section 393 consolidates all of these into one section built around a set of tables. Salary TDS is handled separately under Section 392 (the successor to the old Section 192).
- Table structure: Section 393 groups every deduction obligation by the type of payee — one set of entries for payments to residents, one for payments to non-residents, and common provisions applicable to any person. Each row states the nature of the payment, the monetary threshold, who must deduct, and the applicable rate.
- Nothing substantive changed: Tax professionals broadly agree that Section 393 is largely a re-numbering and re-organisation exercise — the underlying rates and thresholds carried over from the 1961 Act are, in most cases, unchanged. The big shift is that you now quote a Section 393 table item instead of an old "194x" section.
Who it applies to
- Deductors (payers): businesses, companies, firms, and in several cases individuals/HUFs, who make specified payments. Ordinary individuals/HUFs are drawn in only above turnover limits or for specific items (rent above ₹50,000/month, property purchase, crypto).
- Deductees (payees): residents, non-residents, and "any person" depending on the relevant table entry.
Key rates and thresholds (Tax Year 2026-27)
- Interest (other than securities): 10%; threshold ₹50,000 for senior citizens and ₹40,000 for others on bank/post-office deposits; ₹10,000 in most other cases. (Old Section 194A.)
- Contractor payments: 1% if payee is Individual/HUF, 2% otherwise; no TDS if a single payment is ≤ ₹30,000 or aggregate for the year is ≤ ₹1,00,000. (Old 194C.)
- Commission or brokerage: 2%; threshold ₹20,000 per year. (Old 194H.)
- Rent: 10% for land/building, 2% for plant & machinery; threshold ₹50,000 per month. (Old 194-I / 194-IB.)
- Professional / technical fees: 10% for professional services, 2% for technical services; threshold ₹50,000. (Old 194J.)
- Dividend: 10%; no small-value threshold in the general case. (Old 194.)
- Purchase of goods: 0.1% on value exceeding ₹50 lakh. (Old 194Q.)
- Transfer of immovable property: 1% where consideration is ₹50 lakh or more. (Old 194-IA.)
- Virtual digital assets (crypto): 1%, effectively no threshold. (Old 194S.)
- Winnings from lottery/games: deducted at rates in force (30%). (Old 194B/194BA.)
How it interacts with related sections
- Section 392 handles TDS on salary — it stays outside Section 393.
- Section 394 is the mirror provision for TCS (tax collected at source). For post-1 April 2026 transactions you quote the relevant Section 394 item instead of the old "206C" numbers.
- No/lower deduction: Section 393(4) lists cases where no TDS is required (e.g. rent paid to a REIT, interest on notified government securities, certain co-operative society interest). Eligible resident payees can also apply for a nil/lower deduction certificate (via the new Form 121 route) and hand it to the deductor.
- No PAN = higher rate: consistent with the old Section 206AA, if the payee does not furnish a PAN, tax is deducted at the higher of the specified rate or 20%.
Practical implications
- Update your systems: from 1 April 2026, ERPs and TDS software must map each payment to the correct Section 393 table item. Quoting a stale "194C/194J/194H" code for a post-April-2026 transaction can trigger validation errors on the portal.
- Transition date rules the treatment: a sum credited on or before 31 March 2026 follows the 1961 Act; anything on or after 1 April 2026 follows Section 393. Watch year-end accruals carefully.
- Deposit and returns: deducted tax must generally be deposited by the 7th of the following month (30 April for March), and quarterly statements (the successor to Form 26Q) filed, with TDS certificates issued to deductees.
💡 Example
Worked example 1 — Contractor payment. Sharma Traders (a firm) pays ₹4,00,000 during FY 2026-27 to a proprietor (Individual) for job-work under a contract. Because the payee is an Individual/HUF, the rate is 1%. The aggregate exceeds the ₹1,00,000 annual limit, so TDS applies on the full ₹4,00,000: 1% = ₹4,000 is deducted, ₹3,96,000 is paid to the contractor, and ₹4,000 is deposited by the 7th of the next month under the contractor entry of Section 393.
Worked example 2 — Rent by an individual. Mr Verma, a salaried tenant, pays ₹70,000 per month house rent to his resident landlord. Since monthly rent exceeds ₹50,000, he must deduct TDS at 10% on land/building rent. Over 12 months rent is ₹8,40,000; TDS = ₹84,000. Had the rent been ₹45,000/month, no TDS would arise as it is below the ₹50,000 threshold.
A short story. Priya runs a small design studio. Under the old law she memorised a fistful of section numbers — 194C for her printer, 194J for her freelance developer, 194-I for her office rent. In April 2026 her accountant told her to relax: "It's all one section now — 393. The rates for you didn't change; we just tag each bill to the right row in the table." Priya's April payments went out with the new codes, her portal upload passed cleanly, and she realised the reform was less about paying differently and more about finding everything in one place.
| Nature of payment (to residents) | TDS rate | Threshold | Old 1961 section |
|---|
| Interest (non-securities) | 10% | ₹50,000 (senior citizens) / ₹40,000 (bank & PO deposits); ₹10,000 otherwise | 194A |
| Contractor / sub-contractor | 1% (Ind/HUF) · 2% (others) | ≤ ₹30,000 single or ≤ ₹1,00,000 aggregate: nil | 194C |
| Commission / brokerage | 2% | ₹20,000 p.a. | 194H |
| Rent — land & building | 10% | ₹50,000 per month | 194-I / 194-IB |
| Rent — plant & machinery | 2% | ₹50,000 per month | 194-I |
| Professional fees | 10% | ₹50,000 p.a. | 194J |
| Technical services fees | 2% | ₹50,000 p.a. | 194J |
| Dividend | 10% | General (small thresholds apply for individuals) | 194 |
| Purchase of goods | 0.1% | Value above ₹50 lakh | 194Q |
| Transfer of immovable property | 1% | Consideration ≥ ₹50 lakh | 194-IA |
| Virtual digital assets (crypto) | 1% | Effectively nil | 194S |
| No PAN furnished | Higher of specified rate or 20% | — | 206AA |
Related sections
Section 392 — TDS on salary (successor to Section 192) Section 394 — Tax collected at source (TCS) Section 393(4) — Cases where no TDS is required Section 397 — TDS/TCS returns, statements and certificates Section 395 — Processing and consequences of failure to deduct/deposit Section 396 — Credit for tax deducted at source
Forms under this section
Income-tax forms (2025) prescribed under Section 393:
Frequently asked questions
What does Section 393 of the Income-tax Act, 2025 cover?
It is the consolidated TDS provision for all non-salary payments — interest, rent, contractor and professional fees, commission, dividend, purchase of goods, crypto and more — organised into tables by type of payee. It applies to sums paid or credited on or after 1 April 2026.
Which old 1961 sections does Section 393 replace?
It absorbs sections such as 194A, 194C, 194H, 194-I, 194J, 194Q, 194-IA and 194S into one place. Salary TDS moves to Section 392 and TCS to Section 394.
Did the TDS rates and thresholds change under Section 393?
Mostly no. Experts describe it as re-numbering and structural consolidation, with the existing rates and thresholds carried forward largely unchanged for Tax Year 2026-27.
What happens if the payee does not give a PAN?
Consistent with the old Section 206AA, tax is deducted at the higher of the rate specified in Section 393 or 20%.
Can I avoid TDS if my income is below the taxable limit?
Yes. Eligible resident payees can obtain a nil/lower-deduction certificate (via the new Form 121 route) and submit it to the deductor; Section 393(4) also lists specific payments where no TDS is required.
Which transactions still follow the old Act?
Any sum paid or credited on or before 31 March 2026 is governed by the Income-tax Act, 1961. Only payments from 1 April 2026 onward fall under Section 393.
Do I quote the old section codes like 194C after April 2026?
No. For post-1 April 2026 transactions you must quote the relevant Section 393 table item; using stale 194-series codes can cause validation errors on the income-tax portal.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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