A representation dated 03.06.2026 has been submitted to the Chairman of the Central Board of Direct Taxes (CBDT) seeking rationalisation of TDS return reporting codes 1023 and 1024 under Section 393(1) [Table Sl. No. 6(i)] of Income Tax Act, 2025 relating to contract payments. The representation points out that Code 1023 applies to payments made to Individual or HUF contractors, while Code 1024 applies to contractors other than Individuals or HUFs. However, both codes relate to the same category of contract payments, are subject to identical threshold limits of Rs. 30,000 per contract and Rs. 1,00,000 in aggregate, and ultimately operate under the same TDS rate structure of 1% for Individuals/HUFs and 2% for other payees. It is argued that maintaining separate reporting codes creates unnecessary compliance complexity and increases the risk of reporting errors. The representation requests either a merger of the two codes into a single reporting code or a detailed clarification explaining the necessity of retaining separate codes.
Dated 03.06.2026
To
The Chairman,
Central Board of Direct Taxes (CBDT)
Government of India
Subject: Request for Rationalisation and Merger of TDS Return Codes 1023 and 1024 under Section 393(1) [Table Sl. No. 6(i)]
Sir/Madam,
I respectfully submit that the current TDS reporting framework contains separate return codes, namely 1023 and 1024, for payments made under Section 393(1) [Table Sl. No. 6(i)] relating to contract payments.
At present:
- Code 1023 applies where the contractor is an Individual or HUF.
- Code 1024 applies where the contractor is a person other than an Individual or HUF.
However, both codes relate to the same nature of payment, carry the same threshold limits of ₹30,000 per contract and ₹1,00,000 in aggregate, and ultimately operate under the same TDS rate structure of 1% for Individual/HUF payees and 2% for other categories of payees.
The present distinction between Codes 1023 and 1024 appears to create avoidable compliance complexity without any corresponding difference in tax rates, thresholds, or substantive tax treatment. From a deductor’s perspective, the existence of two separate reporting codes for what is effectively the same category of payment often leads to confusion and unnecessary compliance effort.
The duplication of reporting codes despite identical tax consequences may be perceived as an avoidable layer of procedural complexity. A simplification initiative in this regard would significantly improve ease of compliance and reduce reporting errors.
It is therefore requested that CBDT may kindly consider:
1. Merging Codes 1023 and 1024 into a single reporting code; or
2. Issuing a detailed clarification explaining the practical purpose and necessity of maintaining separate codes despite identical tax implications.
Such a measure would be consistent with the Government’s objective of reducing compliance burden, improving ease of doing business, and simplifying tax administration.
I shall be grateful for your kind consideration of this suggestion.
Yours faithfully,
Anirban Dey
Concerned Taxpayer and Stakeholder in Tax Compliance
