The Income-tax e-filing portal prescribes Nature of Payment (NOP) codes ranging from 1001 to 1095 for TDS payments under Challan 281.
These codes are system-driven classifications available on the income-tax portal and are not explicitly prescribed under the Act or Rules. Therefore, the portal dropdown should be treated as the authoritative source for selection.
Detailed List of Nature of Payment Codes
| Code | Nature of Payment | New Section | Old Section |
| 1001 | Payment to Government employees other than Union Government employees | 392 | 192 |
| 1002 | Payment of employees other than Government employees | 392 | 192 |
| 1004 | Payment of accumulated balance due to an employee | 392(7) | 192A |
| 1005 | Commission or brokerage – insurance | 393(1) – Sl. No. 1(i) | 194D |
| 1006 | Commission or brokerage – others | 393(1) – Sl. No. 1(ii) | 194H |
| 1008 | Rent on machinery etc. – specified person | 393(1) – Sl. No. 2(ii) | 194I |
| 1009 | Rent other than machinery etc. – specified person | 393(1) – Sl. No. 2(ii) | 194I |
| 1011 | Payment on any consideration under section 67(14) | 393(1) – Sl. No. 3(ii) | 194IC |
| 1012 | Payment of Compensation on Acquisition of Certain Immovable Property | 393(1) – Sl. No. 3(iii) | 194LA |
| 1013 | Income payable in respect of units of specified Mutual Fund | 393(1) – Sl. No. 4(i) | 194K |
| 1014 | Interest from units of business trust | 393(1) – Sl. No. 4(ii) | 194LBA |
| 1015 | Dividend from units of business trust | 393(1) – Sl. No. 4(ii) | 194LBA |
| 1016 | Renting income from units of business trust | 393(1) – Sl. No. 4(ii) | 194LBA |
| 1017 | Income from investment fund (Sec 224) | 393(1) – Sl. No. 4(iii) | 194LBB |
| 1018 | Income from securitisation trust | 393(1) – Sl. No. 4(iv) | 194LBC |
| 1019 | Interest on securities | 393(1) – Sl. No. 5(i) | 193 |
| 1020 | Interest (senior citizen) | 393(1) – Sl. No. 5(ii) | 194A |
| 1021 | Interest (others) | 393(1) – Sl. No. 5(ii) | 194A |
| 1022 | Other interest | 393(1) – Sl. No. 5(iii) | 194A |
| 1023 | Payment to contractor (Individual/HUF) | 393(1) – Sl. No. 6(i) | 194C |
| 1024 | Payment to contractor (others) | 393(1) – Sl. No. 6(i) | 194C |
| 1026 | Fees for technical services / royalty / call centre | 393(1) – Sl. No. 6(ii) | 194JA |
| 1027 | Professional services | 393(1) – Sl. No. 6(ii) | 194JB |
| 1028 | Director remuneration | 393(1) – Sl. No. 6(iii) | 194JB |
| 1029 | Dividend income | 393(1) – Sl. No. 7 | 194 |
| 1030 | Sum received under life insurance policy | 393(1) – Sl. No. 8(i) | 194DA |
| 1031 | Purchase of goods | 393(1) – Sl. No. 8(ii) | 194Q |
| 1032 | Payment to specified senior citizen | 393(1) – Sl. No. 8(iii) | 194P |
| 1033 | Benefit or perquisite arising from business or profession | 393(1) – Sl. No. 8(iv) | 194R |
| 1035 | E-commerce operator payments | 393(1) – Sl. No. 8(v) | 194O |
| 1037 | Transfer of virtual digital asset | 393(1) – Sl. No. 8(vii) | 194S |
| 1058 | Winnings (lottery, etc.) | 393(3) – Sl. No. 1 | 194B |
| 1060 | Winnings from online games | 393(3) – Sl. No. 2 | 194BA |
| 1062 | Winnings from horse race | 393(3) – Sl. No. 3 | 194BB |
| 1063 | Lottery ticket commission etc. | 393(3) – Sl. No. 4 | 194B |
| 1064 | Cash withdrawal (co-op society) | 393(3) – Sl. No. 5 | 194N |
| 1065 | Cash withdrawal (others) | 393(3) – Sl. No. 5 | 194N |
| 1066 | Amount under section 80CCA(2)(a) | 393(3) – Sl. No. 6 | 194EE |
| 1067 | Partner remuneration | 393(3) – Sl. No. 7 | 194T |
| 1068 | Sale of alcoholic liquor | 394(1) – Sl. No. 1 | 206C(1)(i) |
| 1069 | Sale of tendu leaves | 394(1) – Sl. No. 2 | 206C(1)(ii) |
| 1070 | Sale of timber (forest lease) | 394(1) – Sl. No. 3 | 206C(1)(iii) |
| 1071 | Sale of timber (other than lease) | 394(1) – Sl. No. 3 | 206C(1)(iii) |
| 1072 | Sale of other forest produce | 394(1) – Sl. No. 3 | 206C(1)(iii) |
| 1073 | Sale of scrap | 394(1) – Sl. No. 4 | 206C(1)(vi) |
| 1074 | Sale of minerals | 394(1) – Sl. No. 5 | 206C(1)(vii) |
| 1075 | Sale of motor vehicle >10 lakh | 394(1) – Sl. No. 6(a) | 206C(1F) |
| 1076 | Sale of wrist watch >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1077 | Sale of art piece >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1078 | Sale of collectibles >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1079 | Sale of yacht/boat/helicopter >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1080 | Sale of pair of sunglasses >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1081 | Sale of handbag/purse >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1082 | Sale of shoes >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1083 | Sale of sportswear/equipment >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1084 | Sale of home theatre system >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1085 | Sale of horse for racing >10 lakh | 394(1) – Sl. No. 6(b) | 206C(1F) |
| 1086 | LRS – education/medical | 394(1) – Sl. No. 7 | 206C(1G) |
| 1087 | LRS – others | 394(1) – Sl. No. 7 | 206C(1G) |
| 1088 | Overseas tour package ≤10 lakh | 394(1) – Sl. No. 8 | 206C(1G) |
| 1089 | Overseas tour package >10 lakh | 394(1) – Sl. No. 8 | 206C(1G) |
| 1090 | Parking lot usage | 394(1) – Sl. No. 9 | 206C(1C) |
| 1091 | Toll plaza usage | 394(1) – Sl. No. 9 | 206C(1C) |
| 1092 | Mining/quarry usage | 394(1) – Sl. No. 9 | 206C(1C) |
Important Note:
The portal supports only select codes within the 1000–1095 range. Codes beyond the active range are system-reserved, not mapped to any Nature of Payment, and are not selectable in Challan 281. Selection should always be based on the exact nature of payment as reflected in the portal dropdown. Incorrect selection of code may lead to reporting mismatches, incorrect credit or reconciliation issues.
Types of Major Head
The “Major Head” specifies the category under which the tax is being deposited. The portal provides two options:
- 0020 – Corporation Tax (Company Deductee): Applicable where the deductee is a company (i.e., a body corporate incorporated under the Companies Act) (e.g., Private Limited or Public Limited Company).
- 0021 – Income Tax (Other than Companies): This applies when TDS is deducted from non-corporate entities, such as individuals, Hindu Undivided Families (HUFs), partnership firms, LLPs, trusts, etc.
Importance:
- It ensures that the tax is credited under the correct accounting head in government records.
- Incorrect selection may lead to mismatch of TDS credit in Annual Information Statement (AIS).
- It may require correction statements and can delay credit to the deductee.
Types of Minor Head
The Minor Head specifies the nature of tax payment, i.e., whether the payment relates to a regular deduction or any additional liability such as demand or interest. The portal generally provides the following options:
Minor Head 200 – Regular Payment
- Used when TDS is being deposited for the current period based on actual deduction.
- Applicable in normal situations where tax is deducted and deposited within prescribed timelines.
- Example: TDS deducted in April 2026 and deposited within due date → Minor Head 200.
Minor Head 400 – Demand Payment
- Used when payment is made against a demand raised by the Income-tax Department.
- Typically arises due to short deduction or Notices under TDS provisions
- Example: Demand raised in TRACES for short deduction → payment made using Minor Head 400.
Importance:
- It determines how the payment is classified in government records.
- Incorrect selection may result in demand not getting adjusted.
Residential Status of the Deductee
The deductor is also required to specify whether the deductee is a Resident or Non-Resident.
- Resident Deductee: A person who qualifies as a resident under the applicable provisions of the Income-tax law.
- Non-Resident Deductee: A person who does not satisfy the conditions of residency under the Act.
Importance:
The selection of residential status has significant implications:
- For residents, TDS is deducted at prescribed rates under the respective sections. In case of non-residents, rates may differ and could be influenced by Double Taxation Avoidance Agreements (DTAA).
- Separate return reporting requirements apply in case of non-resident deductee.
- Payments to non-residents often require additional documentation such as Tax Residency Certificate (TRC) as per Section 395(2) of the Act.
Conclusion
In the evolving framework of TDS compliance, correct selection of Nature of Payment codes, Major Head, Minor Head, and residential status is essential to ensure seamless credit, accurate reporting, and avoidance of future litigation. As the system becomes increasingly portal-driven, professionals must align their compliance practices with the functional design of the e-filing system rather than relying solely on statutory interpretation.
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