Section 393 Income Tax Act 2025: TDS Rate Chart FY 2026-27

If you've been quoting 194C or 194J on a TDS challan for years, forget it — from 1 April 2026, almost all of it sits under one section. Section 393 of the Income Tax Act 2025 is the umbrella provision that now covers rent, contractor payments, professional fees, commission, interest and a dozen other payment types that used to live under separate 194-series sections. This guide walks through the Section 393 TDS rate chart for FY 2026-27, the old-to-new mapping, and exactly what changes on your next TDS return.

Table of Contents

• What is Section 393 of the Income Tax Act 2025?

• Who does this apply to?

• Section 393 Income Tax Act 2025 TDS Rate Chart for FY 2026-27

• Old TDS Section to Section 393 Mapping

• Worked Examples

• Form 121 and the New TDS Forms

• What If Something Goes Wrong?

• Documents Needed

• Penalties Under Section 398

• FAQ

What is Section 393 of the Income Tax Act 2025?

Section 393 sits in Chapter XIX of the Income-tax Act, 2025, and it deals with TDS — the tax your payer cuts and deposits with the government before the money even reaches you. It replaces more than 20 separate 194-series sections from the 1961 Act with one long, table-driven provision. Salary TDS stays outside it, under Section 392. TCS (Tax Collected at Source) moves to Section 394.

Why bother restructuring something that already worked? Because the old Act had accumulated 25-plus standalone TDS sections over six decades, and every new type of payment needed its own numbered slot. Section 393 solves that with tables instead — Table 1 for payments to residents, Table 2 for non-residents, and Table 3 for anyone, covering things like lottery wins and cash withdrawals. The Income Tax Department's own FAQ confirms this three-table structure, split by payee category.

Who does this apply to?

Not every payment you make triggers this. Check the table below before you assume the worst.

One thing that trips people up: individuals and HUFs who don't meet the turnover test still have to deduct TDS on a few high-value payments — rent above ₹50,000 a month is the classic example — and they can pay it using their own PAN through Form 141 instead of applying for a TAN.

Section 393 Income Tax Act 2025 TDS Rate Chart for FY 2026-27

This is the part most competitor articles get lazy about — they describe the rule instead of showing you the actual figure. Here's the Section 393 TDS rate chart, drawn straight from the bare act text, covering the resident table under Section 393(1).

For non-resident payments covered by Section 393(2) TDS on NRI payments, royalty, fees, and interest generally attract "rates in force" — often 20-30% plus surcharge and cess, unless a DTAA and Tax Residency Certificate bring the rate down. A non-resident sportsman or entertainer is taxed flat at 20%.

For payments to any person under Section 393(3), you'll find lottery, card-game, and gambling winnings above ₹10,000 per transaction, online game winnings with no threshold at all, horse-race winnings above ₹10,000, cash withdrawals above ₹1 crore (₹3 crore for co-operative societies) at 2%, and partner remuneration or interest above ₹20,000 at 10%.

Head over to our Section 194T TDS threshold calculator if partner payments are what brought you here — it walks through the same ₹20,000 aggregate check that now sits inside 393(3).

Old TDS Section to Section 393 Mapping

Everyone searching "Section 194C to Section 393 mapping" or "Section 194J to Section 393 mapping" wants the same thing: a quick lookup table. Here it is.

The rates and thresholds didn't move much in this reshuffle — what changed is the label. If you want the fuller picture of what stayed the same and what didn't across the whole Act (not just TDS), we've laid that out separately in Income Tax Act 2025 vs 1961: What Every Indian Taxpayer Must Know for FY 2026-27.

Worked Examples

Example 1 — the common case: a freelance professional fee. Priya runs a graphic design freelance practice. A private company (a "specified person") hires her for a logo project and pays her ₹80,000 in July 2026.

• Nature of payment: professional fees → 393(1) Sl. 6(iii)(b)

• Rate: 10% | Threshold: ₹50,000 (crossed, so tax applies to the full ₹80,000)

• TDS = 10% × ₹80,000 = ₹8,000

• Priya receives ₹80,000 − ₹8,000 = ₹72,000 net, and claims that ₹8,000 back as credit when she files her ITR. Want to check what your own net tax liability looks like against that TDS? Our freelancer/professional income tax calculator runs the same 194J-style math end to end.

Example 2 — the edge case competitors skip: a small shop owner crossing the "specified person" line. Suresh runs a kirana store with ₹1.2 crore turnover in FY 2025-26 — that's over the ₹1 crore business threshold, so he becomes a "specified person" for Tax Year 2026-27. He pays ₹65,000 a month rent for his shop (a building) to his landlord, Ramesh.

• Nature of payment: rent on land/building by a specified person → 393(1) Sl. 2(ii)(b)

• Rate: 10% | Threshold: ₹50,000/month (crossed)

• TDS = 10% × ₹65,000 = ₹6,500 per month

• Ramesh receives ₹65,000 − ₹6,500 = ₹58,500 every month, and Suresh has to deposit that ₹6,500 by the 7th of the following month.

Would Suresh have owed anything last year, before his turnover crossed ₹1 crore? No. That's exactly why this threshold check needs redoing every April, not just once.

Form 121 and the New TDS Forms under Section 393

Form 121 is the single new form replacing both Form 15G and Form 15H, filed under Section 393(6). No more choosing based on age — one form works for everyone whose estimated tax liability for the year comes to nil. This is confirmed directly by the Income Tax Department's Form 121 FAQ.

• Eligibility: your total estimated income for the tax year, after deductions, must result in nil tax. Individuals below 60 also face an income-ceiling test; senior citizens don't.

• PAN is mandatory. Skip it, and the declaration is invalid — the payer deducts TDS at the applicable rate regardless.

• File separately with every payer. Three FDs in three banks means three separate Form 121s.

• Valid for one tax year only. File a fresh one every April, ideally before the income is credited.

• A false declaration risks prosecution under Section 482.

The Income Tax Department's own Forms 130-133 notification confirms exactly how the old TDS certificates were renumbered, issued under Section 395(4):

And the quarterly return forms behind those certificates: Form 138 replaces old Form 24Q for salary TDS, Form 140 replaces Form 26Q for resident non-salary TDS, Form 144 replaces Form 27Q for non-resident payments, and Form 141 replaces Form 26QB/26QC/26QD/26QE as the single challan-cum-statement individuals and HUFs use to deposit TDS on property purchase, high-value rent, and similar payments using just their PAN — no TAN needed.

What If Something Goes Wrong?

1. You quoted the old section number (194C, 194J) on a Q1 FY 2026-27 return. The system flags or rejects it at validation. Fix: revise the statement, quote Section 393 with the correct table serial number, and refile before the due date to dodge the ₹200-a-day late fee.

2. You deducted TDS correctly but forgot to report the Form 121 declaration. The payer must still report the UIN in Form 140 even when no tax was cut. Miss it, and a mismatch notice can show up later — check your TRACES login and file a correction statement.

3. The payee's TDS credit isn't showing up in Form 26AS/Form 168. Usually this means the deductor quoted the wrong PAN, or the wrong Section 393 sub-clause. The payee should raise a grievance through TRACES, while the deductor files a correction statement with the right PAN attached.

Documents Needed

Penalties and Interest under Section 398

• Late deduction: simple interest at 1% per month (or part of a month), from the date tax was deductible to the date it's actually deducted.

• Late deposit: simple interest at 1.5% per month, from the date of deduction to the date it's actually paid.

• Late TDS return filing: ₹200 per day under Section 427, capped at the TDS amount.

• Non-deposit after deduction: prosecution under Section 476 — imprisonment ranging from three months to seven years, plus a fine.

• Disallowance: 30% of the payment gets disallowed as a business expense under Section 35(b) if TDS wasn't deducted, or wasn't deposited by the return-filing due date.

Here's the math worked out: TDS of ₹20,000 for April 2026 gets deducted only in June 2026, then deposited on 8 August 2026. Late-deduction interest = 1% × 3 months (April, May, June, each part-month counted whole) × ₹20,000 = ₹600. Late-deposit interest = 1.5% × 2 months (June to August) × ₹20,000 = ₹600. Total interest payable = ₹1,200.

FAQ

Is TDS under Section 393 a new tax, or just a renamed section?

Structural renaming, not a new tax. Rates and thresholds are largely unchanged from the old 194-series — only a handful of rates, like e-commerce TDS dropping from 1% to 0.1%, actually moved.

Do I need to quote Section 393 for a payment made in March 2026?

No. Any sum paid or credited on or before 31 March 2026 stays under the Income-tax Act, 1961 and its old section numbers, even if you end up filing that return after 1 April 2026.

Is Section 393 the "3 Tables" or "6 Tables" section?

The Income Tax Department's own FAQ describes three tables, split by payee category — resident, non-resident, and any person. Some private guides break the resident table into further internal categories and call it "six," but the government's structure is three tables under sub-sections (1), (2), and (3).

What happens if I quote old Section 194C on my TDS return after April 2026?

The return may get flagged or rejected at the system-validation stage, since 194C no longer exists as a live section. You'll need to correct it to Section 393 with the right table serial number.

Can freelancers use Form 121?

Only if their total estimated tax liability for the year works out to nil. Most freelancers earning above the basic exemption limit won't qualify — Form 121 isn't a tool to lower your tax, it's for people who genuinely owe none.

Is TDS on rent different for individuals versus companies under Section 393?

Yes. A non-specified individual/HUF tenant deducts 2%; a specified person — a company, or an individual/HUF that's crossed the turnover threshold — deducts 10% on land/building rent and 2% on machinery rent. Same ₹50,000/month threshold applies either way.

Does Section 393 apply to NRI tenants or NRI payments?

Payments to non-residents generally fall under Section 393(2), not 393(1), and often use "rates in force" rather than a flat percentage, subject to DTAA relief where applicable.

I run an LLP — does partner remuneration attract TDS now?

Yes. Any salary, remuneration, commission, bonus, or interest credited or paid to a partner above ₹20,000 attracts 10% TDS under Section 393(3) Sl. 7 — this is the old Section 194T rule, now folded into 393(3).

What if my transporter contractor owns only 6 trucks?

No TDS deduction is required under Section 393(1) Sl. 6(i), provided the contractor furnishes a PAN-backed declaration confirming they own 10 or fewer goods carriages — the exemption sits in Section 393(4) Sl. 8.

I missed depositing TDS by the due date — can I still avoid being treated as a defaulter?

Yes, in one specific situation: under Section 398(2), if the deductee has already filed their return, included the income, and paid tax on it, and you obtain a Form 26A certificate confirming this, you won't be deemed an assessee-in-default — though the interest for the delay still applies.

Which payment code do I use on the TIN/OLTAS portal for a contractor payment to an individual?

Use the code your TDS software maps to Section 393(1) Sl. 6(i) for individual/HUF contractors — it's a different code from the one for non-individual contractors, even though both sit under the same table row.

What To Do Right Now

Pull up last quarter's TDS working sheet and check every section number against the mapping table above — that's the fastest way to stop a return from getting rejected this quarter. If rent, professional fee, or partner-payment TDS applies to you, run the numbers through the relevant calculator linked above before you deduct a rupee. For the official bare-act text or a CBDT clarification, the Income Tax Department's portal remains the final word.

For educational purposes only. Verify all figures at official sources before acting. Toolisky is not affiliated with any government body. Consult a qualified CA or legal professional before making compliance decisions. See toolisky.com/accuracy-and-limitations.