1. TDS under the Income Tax Act, 2025
The Income Tax Act, 2025, effective from 1 April 2026, retains the Tax Deducted at Source (TDS) mechanism while substantially simplifying its statutory structure.
Under the Income Tax Act, 1961, TDS provisions were spread across multiple sections from Section 192 to Section 194T. Under the new Act, these provisions are largely consolidated into Section 392 for salary payments and Section 393 for payments other than salary.
Section 393 presents the non-salary TDS provisions in a structured, table-based format:
- Payments to Residents [Section 393(1)] – Lays down TDS obligations for specified payments made to resident payees, covering categories such as interest, rent, professional and technical fees, contractor payments, commission, and dividends.
- Payments to Non-Residents [Section 393(2)] – Governs TDS on specified payments or income accruing or arising to non-resident persons, including foreign companies, subject to cross-border rates and thresholds.
- Payments to Any Person [Section 393(3)] – Sets out common provisions applicable to specified payments — such as winnings and large cash withdrawals — where the deduction obligation arises irrespective of the payee’s residential status.
- No Deduction at Source [Section 393(4)] – Specifies the circumstances and prescribed conditions under which no tax is required to be deducted, including declaration-based exemptions and cases covered by lower/nil deduction certificates.
Notes to the TDS Tables
The Notes form an integral part of Section 393 and qualify the corresponding table entries by prescribing specific conditions, thresholds, rates, exceptions and other requirements. Accordingly, each table entry should be read together with the applicable Notes for determining the correct TDS treatment.
Shift from Individual Sections to Table References and Payment Codes
Under the Income Tax Act, 1961, the nature of a TDS transaction was commonly identified through individual sections such as 194C, 194H and 194J. Under the Income-tax Act, 2025, these provisions are consolidated under Section 393 and identified through the relevant Table/Serial Number, along with the corresponding TRACES Payment Code for reporting purposes.
For example, TDS on professional services, earlier covered under Section 194J, is now referenced under Section 393(1), Table Sl. No. 6(iii).D(b) with TRACES Payment Code 1027.
This represents an important practical transition for tax professionals and accountants, who must now become familiar with both the new statutory table references and the corresponding TRACES Payment Codes.
2. Section 392 – TDS on Salary
Section 392 of the Income Tax Act, 2025 governs TDS on salary and certain accumulated balances due to employees. It substantially consolidates the provisions earlier contained in Sections 192 and 192A of the Income Tax Act, 1961.
Under Section 392(1), the employer must deduct tax at the time of payment of salary, at the average rate of income tax computed on the employee’s estimated salary income for the relevant Tax Year.
Key provisions within Section 392 include:
- Salary TDS: deduction at the average rate on estimated salary income.
- Non-monetary perquisites: the employer may opt to bear the tax instead of deducting it from the employee.
- Eligible Start-up ESOPs: TDS is deferred to the prescribed trigger/time specified under the Act.
- Employee declarations: specified other income, house-property loss and TDS/TCS details furnished by the employee may be considered while computing salary TDS.
- TDS adjustment: the employer may adjust any excess or short deduction during the same Tax Year.
- PF/Superannuation balances: Section 392 also covers specified payments of accumulated balances from recognised provident funds, approved superannuation funds and EPF.
- Foreign-currency salary: salary payable in foreign currency is converted into rupees at the prescribed exchange rate for TDS purposes.
3. Section 393 – TDS on Payments Other Than Salary
Section 393 of the Income-tax Act, 2025 is the principal provision governing TDS on payments other than salary. It consolidates numerous TDS provisions of the Income Tax Act, 1961 into a structured, table-based framework.
Section 393 broadly covers:
- Section 393(1) – Payments to Residents
- Section 393(2) – Payments to Non-Residents
- Section 393(3) – Payments to Any Person
- Section 393(4) – Cases where TDS is not required
- Section 393(5) – Persons not liable to TDS deduction
- Section 393(6) – Declaration for no deduction at source
The tables prescribe the nature of payment, payer/payee, threshold and applicable TDS rate, while the accompanying Notes specify transaction-specific conditions, exceptions and qualifications.
4. Important TDS Sections Mapping Table (Old Vs New)
The following table provides a quick mapping of key TDS provisions under the Income Tax Act, 1961 and Income Tax Act, 2025, along with applicable Payment Codes, rates, thresholds and forms.
| Old Section | New Section with Table Serial No. | Table | Payment Code | Nature of Payment/Transaction | Rate | Threshold limit | New Form | Old Form |
|---|---|---|---|---|---|---|---|---|
| 192 | 392 | – | 1001 | Salary – Government employees other than Union Government | Avg Rate | As per slab | Form 138 | Form 24Q |
| 192 | 392 | – | 1002 | Salary – Private Sector / Non-Government employees | Avg Rate | As per slab | Form 138 | Form 24Q |
| 192 | 392 | – | 1003 | Salary – Union Government employees | Avg Rate | As per slab | Form 138 | Form 24Q |
| 194D | 393(1) Table: Sl.No 1.(i) | FOR PAYMENTS TO RESIDENT | 1005 | Insurance Commission | 2% | ₹ 20,000 | Form 140 | Form 26Q |
| 194H | 393(1) Table: Sl.No 1.(ii) | FOR PAYMENTS TO RESIDENT | 1006 | Commission or Brokerage (Other than Insurance) | 2% | ₹ 20,000 | Form 140 | Form 26Q |
| 194-IA | 393(1) Table Sl. No 3.(i) | FOR PAYMENTS TO RESIDENT | 1010 | Transfer of Immovable Property (Other than agricultural land) | 1% | ₹ 50,00,000 | Form 141 | Form 26QB |
| 194K | 393(1) Table Sl.No 4.(i) | FOR PAYMENTS TO RESIDENT | 1013 | Income from specified Mutual Fund units | 10% | ₹ 10,000 | Form 140 | Form 26Q |
| 194A | 393(1) Table Sl.No 5.(ii) | FOR PAYMENTS TO RESIDENT | 1020 | Interest other than interest on securities: Senior Citizen | 10% | ₹ 1,00,000 | Form 140 | Form 26Q |
| 194A | 393(1) Table Sl.No 5.(ii) | FOR PAYMENTS TO RESIDENT | 1021 | Interest other than interest on securities: Other than senior citizen | 10% | ₹ 50,000 | Form 140 | Form 26Q |
| 194A | 393(1) Table Sl.No 5.(iii) | FOR PAYMENTS TO RESIDENT | 1022 | Interest other than bank/post office interest | 10% | ₹ 10,000 | Form 140 | Form 26Q |
| 194C | 393(1) Table Sl.No. 6.(i) | FOR PAYMENTS TO RESIDENT | 1023 | Payment to contractor (Contractor – Individual/HUF) | 1% |
₹30,000 for a single transaction/invoice. ₹1,00,000 for the cumulative aggregate of invoices in a financial year. |
Form 140 | Form 26Q |
| 194C | 393(1) Table Sl.No. 6.(i) | FOR PAYMENTS TO RESIDENT | 1024 | Payment to contractor – (Other than Individual/HUF) | 2% |
₹30,000 for a single transaction/invoice. ₹1,00,000 for the cumulative aggregate of invoices in a financial year. |
Form 140 | Form 26Q |
| 194M | 393(1) Table Sl.No. 6.(ii) | FOR PAYMENTS TO RESIDENT | 1025 | Any sum for Contract work / Professional services / Commission or Brokerage paid by Individual/HUF (Not covered otherwise) | 2% | Exceeding ₹50,00,000 in a FY | Form 140 | Form 26Q |
| 194J | 393(1) Table Sl.No. 6.(iii) | FOR PAYMENTS TO RESIDENT | 1026 | Fees for Technical Services / Royalty on cinematographic films / Call-centre operations | 2% | ₹ 50,000 | Form 140 | Form 26Q |
| 194J | 393(1) Table Sl.No. 6.(iii) | FOR PAYMENTS TO RESIDENT | 1027 | Fees for Professional Services / specified sum under Section 26(2)(h) | 10% | ₹ 50,000 | Form 140 | Form 26Q |
| 194J | 393(1) Table Sl.No. 6.(iii) | FOR PAYMENTS TO RESIDENT | 1028 | Remuneration / Fees / Commission to Director, other than salary | 10% | – | Form 140 | Form 26Q |
| 194DA | 393(1) Table Sl.No. 8.(i) | FOR PAYMENTS TO RESIDENT | 1030 | LIC payment | 2% | ₹ 1,00,000.00 | Form 140 | Form 26Q |
| 194Q | 393(1) Table Sl.No. 8.(ii) | FOR PAYMENTS TO RESIDENT | 1031 | Purchase of Goods | 0.10% | ₹50 lakh for Individual/HUF; Nil for others — TDS on amount exceeding ₹50 lakh | Form 140 | Form 26Q |
| 194R | 393(1) Table Sl.No. 8.(iv) | FOR PAYMENTS TO RESIDENT | 1033 | Benefit/Perquisite — Cash | 10% | ₹ 20,000 | Form 140 | Form 26Q |
| 194R | 393(1) Table Sl.No. 8.(iv) | FOR PAYMENTS TO RESIDENT | 1034 | Benefit/Perquisite — In Kind / Partly in Cash & Partly in Kind | 10% | ₹ 20,000 | Form 140 | Form 26Q |
| 194O | 393(1) Table Sl.No. 8.(v) | FOR PAYMENTS TO RESIDENT | 1035 | E-Commerce: Sale of Goods / Provision of Services | 0.10% | ₹5,00,000 for Individual/HUF; Nil for others | Form 140 | Form 26Q |
| 194S | 393(1) Table Sl.No. 8.(vi) | FOR PAYMENTS TO RESIDENT | 1036 | Consideration for transfer of VDA by an Individual/HUF — Cash or Kind | 1% | ₹ 50,000 | Form 141 | Form 26EQ |
| 194S | 393(1) Table Sl.No. 8.(vi) | FOR PAYMENTS TO RESIDENT | 1037 | Consideration for transfer of VDA by a person other than Individual/HUF — Cash | 1% | ₹ 10,000 | Form 140 | Form 26Q |
| 194S | 393(1) Table Sl.No. 8.(vi) | FOR PAYMENTS TO RESIDENT | 1038 | Consideration for transfer of VDA by a person other than Individual/HUF — in Kind | 1% | Nil | Form 140 | Form 26Q |
| 194E | 393(2) Table Sl.No. 1 | FOR PAYMENTS TO NON-RESIDENT | 1039 | Payment to Sportsman/Athlete, Entertainer or Sports Association/Institution (NRI) | 20% | Nil | Form 144 | Form 27Q |
| 194B | 393(3) Table Sl.No. 1 | FOR PAYMENTS TO ANY PERSON | 1058 | Winnings from Lottery, Crossword Puzzle, Card Game, Gambling or Betting — Cash | 30% | ₹10,000 per single transaction | Form 140 | Form 26Q |
| 194B | 393(3) Table Sl.No. 1 | FOR PAYMENTS TO ANY PERSON | 1059 | Winnings from Lottery, Crossword Puzzle, Card Game, Gambling or Betting — Other than Cash | 30% | ₹10,000 per single transaction | Form 140 | Form 26Q |
| 194BB | 393(3) Table Sl.No. 3 | FOR PAYMENTS TO ANY PERSON | 1062 | Winnings from Horse Race | 30% | ₹10,000 per single transaction | Form 140 | Form 26Q |
| 194N | 393(3) Table Sl.No. 5 | FOR PAYMENTS TO ANY PERSON | 1064 | Cash Withdrawal — Co-operative Society | 2% | 3 Crore | Resident – Form 140 | Form 26Q |
| NRI – Form 144 | Form 27Q | |||||||
| 194N | 393(3) Table Sl.No. 5 | FOR PAYMENTS TO ANY PERSON | 1065 | Cash Withdrawal — Other than Co-operative Society | 2% | 1 Crore | Resident – Form 140 | Form 26Q |
| NRI – Form 144 | Form 27Q |
5. TDS Forms under the Income Tax Act, 2025
The Income Tax Rules, 2026 introduce new form numbers for several TDS compliances. Deductors and tax professionals should use the new forms applicable under the Income Tax Act, 2025.
Quarterly TDS Statements
| Nature of Statement | Old Form | New Form |
|---|---|---|
| Salary | Form 24Q | Form 138 |
| Resident, non-salary | Form 26Q | Form 140 |
| Non-resident | Form 27Q | Form 144 |
| Challan-cum-statement – specified transactions | Forms 26QB / 26QC / 26QD / 26QE | Form 141 |
TDS/TCS Certificates
| Certificate | Old Form | New Form |
|---|---|---|
| Salary TDS certificate | Form 16 | Form 130 |
| Non-salary TDS certificate | Form 16A | Form 131 |
| Specified transaction certificates | Forms 16B / 16C / 16D / 16E | Form 132 |
| TCS certificate | Form 27D | Form 133 |
Declarations and Applications
| Purpose | Old Form | New Form |
|---|---|---|
| Employee declaration to employer | Form 12BB | Form 124 |
| Self-declaration for specified income without TDS | Forms 15G / 15H | Form 121 |
| Application for lower/nil deduction | Form 13 | Form 128 |
| Information for foreign remittance | Form 15CA | Form 145 |
| Accountant’s certificate for foreign remittance | Form 15CB | Form 146 |
| TAN application | Form 49B | Form 135 |
6. Deposit of TDS
TDS deducted must be deposited with the Central Government within the prescribed due dates.
| Particulars | Due Date |
|---|---|
| TDS deducted from April to February – Non-Government Deductor | 7th of the following month |
| TDS deducted in March – Non-Government Deductor | 30-Apr |
| TDS deducted by Government Deductor without challan | Same day |
| TDS deducted by Government Deductor with challan | 7th of the following month |
| Specified transactions reported through Form 141 | Within 30 days from the end of the month in which TDS is deducted |
7. Quarterly TDS Statement Due Dates
Regular quarterly TDS statements must be filed within the prescribed due dates.
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | April – June | 31-Jul |
| Q2 | July – September | 31-Oct |
| Q3 | October – December | 31-Jan |
| Q4 | January – March | 31-May |
These due dates apply to the relevant quarterly TDS statements, including Form 138, Form 140 and Form 144, as applicable.
8. TDS Certificate
After deducting and depositing TDS, the deductor is required to issue the prescribed TDS certificate to the deductee within the applicable due date.
| Certificate | New Form | Due Date |
|---|---|---|
| Salary TDS Certificate | Form 130 | 15th June following the relevant Tax Year |
| Non-Salary TDS Certificate | Form 131 | Within 15 days from the due date of the relevant quarterly TDS statement |
| Specified Transaction Certificate | Form 132 | Within 15 days from the due date of Form 141 |
These correspond broadly to the earlier Forms 16, 16A and Forms 16B/16C/16D/16E, respectively.
9. Interest and Penalty for TDS Default
Failure to deduct, deposit or report TDS within the prescribed time may attract interest, fee and penalty.
| Nature of Default | Consequence |
|---|---|
| Delay in deduction of TDS | Interest @ 1% per month or part thereof [Section 398(3)(a)(i)] |
| TDS deducted but deposited late | Interest @ 1.5% per month or part thereof [Section 398(3)(a)(ii)] |
| Late filing of TDS statement | Late filing fee (successor to old Section 234E, ₹200/day) |
| Failure/incorrect filing of TDS statement | Penalty, subject to applicable provisions (successor to old Section 271H) |
| Failure to deduct/pay TDS | Deemed assessee in default [Section 398(1)] |
10. Frequently Asked Questions
The Act applies from 1st April 2026. TDS on any sum credited or paid on or after this date is governed by Section 392/393 of the 2025 Act; sums credited or paid on or before 31 March 2026 continue to be governed by the 1961 Act.
No. The consolidation under Sections 392 and 393 is structural, not substantive — the existing rates and threshold limits for salary and non-salary payments have largely been carried forward unchanged.
Form 16 (salary TDS certificate) is replaced by Form 130, and Form 16A (non-salary TDS certificate) is replaced by Form 131.
No. The due dates remain 31 July, 31 October, 31 January and 31 May for Q1 to Q4 respectively — only the form numbers (138, 140, 144) and the governing section (397(3)(b)) have changed.
Interest is charged at 1.5% per month or part thereof under Section 398(3)(a)(ii), in addition to the deductor being treated as an assessee in default.
Instead of referring to an old section (such as 194C or 194J), deductors must now identify the applicable Table Serial Number under Section 393(1)/(2)/(3) and the corresponding TRACES Payment Code (e.g., Code 1027 for professional fees) for reporting purposes.
Yes. The application (earlier Form 13) is now filed in Form 128, and the resulting certificate is issued under Section 395(1).
11. Conclusion
The TDS framework under the Income Tax Act 2025 does not alter the fundamental character of tax deduction at source in India — the obligation to deduct, the applicable rates, and the broad compliance calendar remain, in substance, what they were under the 1961 Act. What has changed is the architecture: over 60 fragmented sections spanning Section 192 to Section 194T have been consolidated into two principal provisions — Section 392 for salary and Section 393 for all other payments — supported by a table-and-code-based reporting system in place of section-wise references.
For deductors and tax professionals, the practical challenge lies not in relearning the substance of TDS but in adapting to the new points of reference: the relevant Table Serial Number under Section 393, the corresponding TRACES Payment Code, the renumbered forms (130, 131, 138, 140, 141, 144), and the updated statutory citations for interest, penalty and certificate issuance. Getting comfortable with this new nomenclature — while recognising that the underlying compliance obligations are largely unchanged — is the key to a smooth transition into the Tax Year 2026-27 regime.
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