The Income-tax Act, 2025, proposed to come into force from 1st April 2026, seeks to replace the existing 1961 Act with the objective of simplifying, streamlining, and modernizing India’s tax framework.
One of the key structural changes is that, the provisions relating to Tax Deducted at Source (TDS) have been consolidated under Section 393, improving clarity and ease of reference. Since the TDS provisions have been consolidated, it is useful to summarize the section 393 . However, it is important to note that there are no substantial changes in the underlying TDS provisions, except for renumbering and structural consolidation.
Section 393 contains six tables covering various aspects of Tax Deducted at Source (TDS). In this article, we will focus on Table 1. The remaining five tables will be discussed in subsequent parts of this TDS series.
| Sl. No. | Classifi-cation | Section | Particulars | Criteria/ Threshold Limit | Company/ Coo-perative society/ Firm | Individual/ HUF |
| 1 | Commi-ssion | 393(1)-T1-S.N 1(i & ii) | (i) Commission or Brokerage- Insurance
(ii) Other commission |
Beyond 20,000/- p.a. | 2% | 2% |
| 2 | Rent | 393(1)-T1-S.N 2(i) | Rent
(Individual / HUF- GR exceeds, Business- 1 crore Profession-50 Lakhs) |
Beyond 50,000/- p.m | 2% | 2% |
| 393(1)-T1-S.N 2(ii) | Rent (others) | |||||
| (a) Plant & Machinery | Beyond 50,000/- p.m
(previously- 20,000/- p.m) |
2% | 2% | |||
| (b) Land & Building | 10% | 10% | ||||
| 3 | Immovable Property | 393(1)-T1-S.N 3(i) | Any consideration for transfer of any immovable property (other than agricultural land) | =< 50,00,000 | 1%
(of SC or SDV, whichever is Higher) |
1%
(of SC or SDV, whichever is Higher) |
| 393(1)-T1-S.N 3(ii) | Payment under specified agreement (i.e. JDA) | Any amount
(i.e No Threshold Limit) |
10% | 10% | ||
| 393(1)-T1-S.N 3(iii) | Compensation on acquisition of Immovable Property | =<5,00,000 | 10% | 10% | ||
| 4 | Income from capital market | 393(1)-T1-S.N 4(i) to (iv) | Will Discuss later | |||
| 5 | Interest | 393(1)-T1-S.N 5(i) | Interest on Securities | Beyond 10,000/- p.a | 10% | 10% |
| 393(1)-T1-S.N 5(ii) | Interest from-
(a) Banking Company (b) Cooperative Society- Banking business (c) Post office |
(i) SC- 100,000/- p.a
(ii) others- 50,000/- p.a |
10% | 10% | ||
| 393(1)-T1-S.N 5(iii) | Any other interest | Beyond 10,000/- p.a | 10% | 10% | ||
| 6 | Contractors | 393(1)-T1-S.N 6(i) | Payments to contractors | (a) 30,000 per contract, or
(b) 100,000 in aggregate during the year |
2% | 1% |
| 393(1)-T1-S.N 6(ii) | Payment of certain sums by certain individuals or Hindu undivided family to resident contractor, resident professional or by way of commission or brokerage- (i.e. who are not liable to deduct TDS as per S.N. 6(i) | <50 Lakh | 2%
(of total payment) |
2%
(of total payment) |
||
| Professional fees, technical fees, royalty etc. | 393(1)-T1-S.N 6(iii) | (a) Fees for professional services | Above 50,000 | (a) 2%- FTS, Royalty-cinemato-graphy, call center only
(b) 10% – otherwise |
(a) 2%- FTS, Royalty-cinemato-graphy, call center only
(b) 10% – otherwise |
|
| (b) Fees for technical services | Above 50,000 | |||||
| (c) remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 392, to a director of a company | Any amount
(i.e. No Threshold Limit) |
|||||
| (d) Royalty | Above 50,000/- | |||||
| (e ) any other payment us 26(2)(g)- i.e. under an agreement for not carrying out any activity or under an agreement for not sharing any know-how, patent, copyright, trade-mark, licence, franchise etc. | Above 50,000/- | |||||
| 7 | Dividend | 393(1)-T1-S.N 7 | Dividend | Any amount
(i.e No Threshold Limit) |
10% | 10% |
| 8 | Other Cases | 393(1)-T1-S.N 8(i) | Payment in respect of Life insurance policy | <100000 | 2% | 2% |
| 393(1)-T1-S.N 8(ii) | Purchase of Goods
Conditions: 1. if buyer’s total sales, turnover exceeds 10 crores in preceding F.Y. |
<50 Lakh
(Note: TDS shall be deductible on sum exceeding 50L) |
0.10% | 0.10% | ||
| 393(1)-T1-S.N 8(iii) | Specified senior citizen | Applicable Slab Rates | Applicable Slab Rates | Applicable Slab Rates | ||
| 393(1)-T1-S.N 8(iv) | Any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession of any resident | <20,000 | 10% | 10% | ||
FAQs – Section 393 of the Income-tax Act, 2025: Tax Deducted at Source (TDS)
Q1. What is the significance of Section 393 of the Income-tax Act, 2025?
Answer: Section 393 consolidates the TDS provisions that were previously spread across multiple sections of the Income-tax Act, 1961. It provides a simplified and structured framework for TDS on various payments while largely retaining the existing rates, thresholds, and principles.
Q2. Have the TDS rates changed under Section 393 of the Income-tax Act, 2025?
Answer: No. Section 393 primarily introduces structural consolidation and renumbering of the TDS provisions. The applicable TDS rates, threshold limits, and underlying tax principles remain substantially the same as under the Income-tax Act, 1961.
Q3. Which types of payments are covered under Table 1 of Section 393?
Answer: Table 1 of Section 393 covers TDS on commission, rent, immovable property transactions, interest, contractor payments, professional and technical fees, director’s remuneration, royalties, dividends, life insurance payouts, purchase of goods, specified senior citizens, and business benefits or perquisites.
Q4. What are the key threshold limits under Section 393 for resident payments?
Answer: Some important thresholds include ₹20,000 for commission, ₹50,000 per month for rent, ₹50 lakh for purchase of immovable property and purchase of goods (subject to prescribed conditions), ₹10,000 for specified interest payments, ₹30,000 per contract or ₹1 lakh in aggregate for contractor payments, and ₹50,000 for professional and technical fees.
Q5. Does Section 393 cover all TDS provisions under the Income-tax Act, 2025?
Answer: Section 393 contains six tables covering different categories of TDS. The article discusses only Table 1, which deals with major resident payment provisions. The remaining tables cover other TDS categories and are intended to be discussed separately.
Great Insight, summarized with clarity. Good Work sir 👍