The Income Tax Act 2025 replaces the 1961 Act from 1 April 2026 — bringing major restructuring to TDS provisions. Old sections like 192, 194A, 194C, 194J are replaced by new Sections 392 & 393. This complete guide covers every TDS rate, old vs new section comparison, threshold limits, and what changes for your business.
The Income Tax Act 2025 is a landmark reform — India’s first complete rewrite of the income tax law since 1961. For TDS, the most significant change is the consolidation of 30+ scattered TDS sections into a clean two-section structure.
TDS on Salary — replaces old Section 192 & 192A
TDS on all non-salary payments — Table 1, 2 & 3 structure
Section 393 is supported by structured payment tables replacing all old sections
Here is a quick visual summary of TDS rates applicable from FY 2026-27:
Below is the complete TDS rate chart under the Income Tax Act 2025, effective from 1 April 2026. Both old and new section numbers are shown for easy reference:
| Payment Type | Old Section | New Section | Rate | Threshold | Notes |
|---|---|---|---|---|---|
| Salary Income | 192 | Sec 392 | Slab Rate | Basic exemption limit | Based on estimated annual salary |
| PF Accumulated Balance | 192A | Sec 392 | 10% | ₹50,000 | Only if PF withdrawn before 5 years of service |
| Senior Citizen (75+) — Bank | 194P | 393 Table 1 S.No.(8)(iii) | Slab Rate | As per slab | Resident senior citizens aged 75+ only |
| Payment Type | Old Section | New Section | Rate | Threshold | Notes |
|---|---|---|---|---|---|
| Interest on Securities | 193 | 393 Table 1 S.No.(5)(i) | 10% | ₹10,000 | Exempt: Govt securities, LIC, GIC, insurers |
| Dividend | 194 | 393 Table 1 S.No.(7) | 10% | ₹10,000 | Exempt: Dividend paid to business trust (REIT/InvIT) |
| Interest (other than securities) — Bank | 194A | 393 Table 1 S.No.(5)(ii) | 10% | Sr. Citizen ₹1,00,000; Others ₹50,000 (Bank/PO); ₹10,000 (Others) | Higher threshold for senior citizens by bank/post office |
| Income from Mutual Funds | 194K | 393 Table 1 S.No.(4)(i) | 10% | ₹10,000 | Applies only to dividend income from mutual funds |
| Income from Business Trust | 194LBA | 393 Table 1 S.No.(4)(ii) | 10% | Nil | REIT / InvIT distributions |
| Income from Investment Fund | 194LBB | 393 Table 1 S.No.(4)(iii) | 10% | Nil | AIF Category I & II |
| Income from Securitisation Trust | 194LBC | 393 Table 1 S.No.(4)(iv) | 10% | Nil | — |
| Payment Type | Old Section | New Section | Rate | Threshold | Notes |
|---|---|---|---|---|---|
| Rent — Land / Building / Furniture | 194I | 393 Table 1 S.No.(2)(ii) | 10% | ₹50,000 per month | Deductors liable for tax audit only |
| Rent — Plant & Machinery | 194I | 393 Table 1 S.No.(2)(ii) | 2% | ₹50,000 per month | Lower rate for machinery rent |
| Rent by Individual/HUF | 194IB | 393 Table 1 S.No.(2)(i) | 2% | ₹50,000 per month | Individual/HUF not liable to tax audit |
| Sale of Property | 194IA | 393 Table 1 S.No.(3)(i) | 1% | ₹50 lakh | Higher of actual consideration or stamp duty value |
| Compulsory Acquisition Compensation | 194LA | 393 Table 1 S.No.(3)(iii) | 10% | ₹5,00,000 | On immovable property (not agricultural land) |
| Payment Type | Old Section | New Section | Rate | Threshold | Notes |
|---|---|---|---|---|---|
| Contractor Payment — Individual/HUF | 194C | 393 Table 1 S.No.(6)(i) | 1% | ₹30,000 single / ₹1,00,000 aggregate | For individual/HUF contractors |
| Contractor Payment — Others | 194C | 393 Table 1 S.No.(6)(i) | 2% | ₹30,000 single / ₹1,00,000 aggregate | For companies, firms, trusts |
| Professional Services | 194J | 393 Table 1 S.No.(6)(iii) | 10% | ₹50,000 per year | CA, Doctor, Lawyer, Architect etc. |
| Technical Services | 194J | 393 Table 1 S.No.(6)(iii) | 2% | ₹50,000 per year | Lower rate for technical work |
| Director Remuneration (Non-salary) | 194J | 393 Table 1 S.No.(6)(iii) | 10% | No threshold | Always deduct — no minimum limit |
| Commission / Brokerage | 194H | 393 Table 1 S.No.(1)(ii) | 2% | ₹20,000 | Excludes BSNL/MTNL PCO franchise commission |
| Insurance Commission | 194D | 393 Table 1 S.No.(1)(i) | 2% | ₹20,000 | Paid by insurance company to agents |
| Contract/Commission by Ind/HUF | 194M | 393 Table 1 S.No.(6)(ii) | 2% | ₹50 lakh per FY | When not covered under 194C/194H/194J |
| Benefit / Perquisite | 194R | 393 Table 1 S.No.(8)(iv) | 10% | ₹20,000 per FY | Cash or kind from business/profession |
| Payment Type | Old Section | New Section | Rate | Threshold | Notes |
|---|---|---|---|---|---|
| Purchase of Goods | 194Q | 393 Table 1 S.No.(8)(ii) | 0.1% | ₹50 lakh per FY | Buyer’s turnover must exceed ₹10 crore |
| E-Commerce Participants | 194O | 393 Table 1 S.No.(8)(v) | 0.1% | ₹5 lakh (Ind/HUF); No limit for others | On gross sales through e-commerce platform |
| Life Insurance Policy Payout | 194DA | 393 Table 1 S.No.(8)(i) | 2% | ₹1,00,000 | TDS on income component, not full amount |
| Virtual Digital Assets (Crypto/NFT) | 194S | 393 Table 1 S.No.(8)(vi) | 1% | ₹50,000 (specified); ₹10,000 (others) | On transfer of crypto, NFTs, and other VDAs |
| Payment to Partners by Firm | 194T | 393 Table 3 S.No.(7) | 10% | ₹20,000 per FY | Salary, bonus, commission, interest to partners |
| Payment Type | Old Section | New Section | Rate | Threshold | Notes |
|---|---|---|---|---|---|
| Lottery / Crossword / Game Winnings | 194B | 393 Table 3 S.No.(1) | 30% | ₹10,000 | TDS on net winnings |
| Online Gaming Winnings | 194BA | 393 Table 3 S.No.(2) | 30% | No limit | Dream11, Rummy, skill-based games — on net winnings |
| Horse Race Winnings | 194BB | 393 Table 3 S.No.(3) | 30% | ₹10,000 | On each payment exceeding threshold |
| Lottery Ticket Commission | 194G | 393 Table 3 S.No.(4) | 2% | ₹20,000 | Commission on stocking/selling lottery tickets |
| Cash Withdrawals | 194N | 393 Table 3 S.No.(5) | 2% | ₹3 crore (co-op); ₹1 crore (others) | Higher TDS for non-ITR filers provision removed |
| Non-Resident Sportsmen / Entertainers | 194E | Sec 393 | 20% | No threshold | Any payment to non-resident sportsmen or associations |
Regardless of section number changes, your TDS compliance obligations remain the same. Here is a complete compliance calendar:
| Deductor Type | Month of Deduction | Due Date for Deposit |
|---|---|---|
| Government Deductor | Any month | Same day (challan not required for govt) |
| Non-Government — Regular months | April to February | 7th of the following month |
| Non-Government — March | March | 30th April |
| Quarter | Period | Due Date | Forms |
|---|---|---|---|
| Q1 | April – June | 31st July | 24Q (Salary), 26Q (Non-salary), 27Q (NRI), 27EQ (TCS) |
| Q2 | July – September | 31st October | 24Q, 26Q, 27Q, 27EQ |
| Q3 | October – December | 31st January | 24Q, 26Q, 27Q, 27EQ |
| Q4 | January – March | 31st May | 24Q, 26Q, 27Q, 27EQ |
| Certificate | For | Due Date |
|---|---|---|
| Form 16 (Part A) | Salary — TDS details quarter-wise | 15th June after year end |
| Form 16 (Part B) | Salary — Full tax computation | 15th June after year end |
| Form 16A | Non-salary TDS certificates | 15 days from return due date |
| Form 16B | TDS on property sale (194IA) | 15 days from return filing |
| Form 16C | TDS on rent by Individual/HUF | 15 days from return filing |
Every business that deducts TDS needs to prepare for this transition. Here is your action checklist:
| # | Action Required | Who It Affects | Priority |
|---|---|---|---|
| 1 | Update accounting software (Tally, SAP, Zoho) with new section numbers under IT Act 2025 | All TDS deductors | High |
| 2 | Train finance and accounts team on new section structure | Companies, firms | High |
| 3 | Update TDS challan payment format — new section codes to be used from April 2026 | All TDS deductors | High |
| 4 | Review all vendor/party master in ERP — update TDS section codes | Companies with ERP | Medium |
| 5 | File all pending TDS returns for FY 2025-26 using OLD section numbers before 31 March 2026 | All deductors | High |
| 6 | Consult your CA for sector-specific TDS changes and edge cases | All businesses | Medium |
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