Effective April 1, 2026, the Income-tax Act, 2025 represents a transformative shift in India’s fiscal policy. By streamlining the legacy 1961 Act from 819 sections to just 536, the government has prioritized structural reorganization and digital compliance.
Compliance and Form Changes
- Unified Tax Year: Elimination of the confusing “Previous Year” vs “Assessment Year” distinction.
- Consolidated TDS/TCS: Over 60 provisions have been merged into simplified sections (392–394).
- Logical Remapping: Capital gains (Sections 67–91) and Business profits (Sections 26–66) have been reindexed for better flow.
- Form 26AS: Restructured and integrated directly into the evolved Annual Information Statement via Form 168.
- Forms 15G / 15H: Combined into a single unified Form 121 for both standard individuals and senior citizens.
- Property/Rent TDS (26QB to 26QE): Consolidated entirely into a single reporting document, Form
| Category / Nature of Income [ | Old Law Section (1961 Act) | New Law Section (2025 Act) | Key Transitional Change |
| Salary Income | Sections 15–19 | Sections 15–19 | Structural alignment remains similar. |
| House Property Income | Sections 22–27 | Sections 20–25 | Reordered for logical sequence. |
| Business/Profession Profits | Sections 28–44DB | Sections 26–66 | Massive consolidation of deductions. |
| Capital Gains | Sections 45–55A | Sections 67–91 | Sequential layout based on asset class. |
| Other Sources Income | Sections 56–59 | Sections 92–95 | Streamlined presentation. |
| New Tax Regime Slabs | Section 115BAC | Section 202 | Shifted to the core charging chapters. |
| TDS on Salary | Section 192 | Section 392 | Simplifies professional deductions. |
| TDS on Non-Salary Payments | Section 193 to 194T | Section 393 | Consolidates interest, rent, and commissions. |
| Tax Collected at Source (TCS) | Section 206C to 206CCA | Section 394 | Merges separate collection streams into one. |
Non-Salary TDS Provisions Streamlined Under Section 393 of the Income-tax Act, 2025: Key Thresholds and Rates Explained
Introduction
The Income-tax Act, 2025 introduces a significant structural reform in the framework of Tax Deducted at Source (TDS) by consolidating numerous non-salary TDS provisions that were previously scattered across multiple sections of the Income-tax Act, 1961.
Under Section 393 of the Income-tax Act, 2025, more than 60 non-salary TDS provisions have been reorganized into a more streamlined and consolidated structure. The objective of this restructuring is to simplify compliance, improve clarity for taxpayers and deductors, and create a more systematic approach to withholding tax obligations.
While the provisions have undergone structural consolidation, the individual threshold limits and applicable TDS rates for various categories of payments remain largely consistent with the existing framework under the earlier law.
Overview of Section 393: Consolidation of Non-Salary TDS Provisions
Under Section 393 of the Income-tax Act, 2025, more than 60 scattered non-salary TDS provisions from the legacy 1961 Act have been structurally streamlined. While the sections are heavily consolidated, the individual threshold limits and tax rates for specific payment categories remain mostly aligned with previous parameters
The major categories covered under the consolidated non-salary TDS mechanism include:
- Payments to contractors and subcontractors
- Professional and technical service fees
- Interest payments
- Commission and brokerage payments
- Rent payments
- Payments for contractual obligations
- Other specified resident payments
Non-Salary TDS Thresholds & Rates Under Section 393
The table below highlights the critical threshold limits and standard deduction rates for common resident payments consolidated under Section 393.
| Nature of Payment | Old 1961 Section | New 2025 Section Mapping | Exemption Threshold Limit (Per Tax Year) | Standard TDS Rate |
| Payments to Contractors | Section 194C | Section 393(1) [Table: Sl. 6(i)] |
₹30,000 single / ₹1,00,000 aggregate | 1% (Ind/HUF) / 2% (Others) |
| Fees for Professional Services | Section 194J | Section 393(1) [Table: Sl. 6(iii)(a)] |
₹50,000 | 10% |
| Fees for Technical Services | Section 194J | Section 393(1) [Table: Sl. 6(iii)(b)] |
₹50,000 | 2% |
| Rent on Immovable Property | Section 194I(b) | Section 393(1) [Table: Sl. 2(ii)(b)] |
₹50,000 per month or part | 10% |
| Rent on Plant & Machinery | Section 194I(a) | Section 393(1) [Table: Sl. 2(ii)(a)] |
₹50,000 per month or part | 2% |
| Interest (Other than Securities) | Section 194A | Section 393(1) [Table: Sl. 5(ii)] |
₹1,00,000 (Senior Citizens) / ₹50,000 (Others) | 10% |
| Interest (General / Non-CBS) | Section 194A | Section 393(1) [Table: Sl. 5(iii)] |
₹10,000 | 10% |
| Commission or Brokerage | Section 194H | Section 393(1) [Table: Sl. 1(ii)] |
₹20,000 | 2% |
| Partner Salary / Commission | Section 194T | Section 393(1) | ₹20,000 | 10% |
| Purchase of Goods (Buyer) | Section 194Q | Section 393(1) [Table: Sl. 8(ii)] |
₹50,00,000 (Aggregate) | 0.1% |
| Immovable Property Purchase | Section 194-IA | Section 393(1) [Table: Sl. 3(i)] |
₹50,00,000 (Property value) | 1% |
| Business Benefit / Perquisite | Section 194R | Section 393(1) [Table: Sl. 8(iv)] |
₹20,000 (Aggregate value) | 10% |
Under the Income-tax Act, 2025, the default New Tax Regime (codified under Section 202) features an increased basic exemption limit of ₹4,00,000
Additionally, because of the enhanced tax rebate under Section 156 of the new Act, individuals earning a taxable income of up to ₹12,00,000 pay zero income tax. For salaried employees, the standard deduction is ₹75,000, pushing the effective zero-tax threshold to ₹12,75,000.
Default New Tax Regime Slabs (Section 202)
The progressive tax slabs under the new law are structured as follows:
| Income Slab Range | Applicable Tax Rate |
| Up to ₹4,00,000 | NIL |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% (Fully exempt via rebate if total income ≤ ₹12L) |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Alternate Optional Old Tax Regime Slabs
If you choose to opt out of the default regime to claim traditional investments (like Section 123 / legacy 80C), the older slab thresholds apply:
- General Taxpayers & NRIs: Exempt up to ₹2,50,000. (Zero tax up to ₹5,000,000 via a ₹12,500 rebate).
- Senior Citizens (Aged 60 to 80): Exempt up to ₹3,00,000.
- Super Senior Citizens (Aged 80+): Exempt up to ₹5,00,000.
- The introduction of Section 393 of the Income-tax Act, 2025 represents an important step toward simplifying India’s direct tax framework. By consolidating more than 60 non-salary TDS provisions into a unified structure, the new law aims to make compliance more efficient and easier to interpret.
- Although the legislative structure has changed significantly, the underlying tax deduction principles, payment categories, threshold limits, and applicable rates remain largely familiar to taxpayers and businesses. The reform therefore focuses more on simplification and rationalization of compliance rather than creating major changes in tax deduction outcomes.
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