Section 393 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 393(2) of the Income-tax Act, 2025 has its own Table for payments to non-residents, with seventeen serial numbers and three Notes. Unlike the Table for residents, it names the payee and gives no threshold: the payer deducts at the rate in column E on the amount of the income or sum. This article reproduces every row, as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026.
Where an income or sum in column B is credited or paid by the person in column D to the non-resident in column C, the person responsible for paying deducts income-tax on the amount at the rate in column E, at the earlier of credit and payment, subject to section 393(4), (8) and (9). Rates printed range from 4% to 20%; for serial numbers 7, 8, 9 and 17 the Table says "Rates in force" and this article states no figure for them. Serial numbers 10 and 15 are 20% or a lower treaty rate under Note 2.
How section 393(2) works
The sub-section says that where any income or sum of the nature in column B of the Table is credited or paid by the person in column D during the tax year to a non-resident specified in column C, the person responsible for paying shall deduct income-tax on the amount of the income or sum:
- (a) at the rate specified in column E;
- (b) at the time of credit to the account of the payee, or at the time of its payment in cash or by cheque, draft or any other mode, whichever is earlier; and
- (c) subject to sub-sections (4), (8) and (9).
No threshold limit column appears in this Table. Payments to residents are in section 393(1); see the articles on commission, rent and property, interest and capital market income, contractors, professional fees and dividend and other cases. The overview is in our post on section 393; salary is in section 392. The earlier Act's provisions are mapped in our TDS sections mapping note (see our note on where the earlier Act's provisions sit in the 2025 Act). Section 393 was amended by section 84 of the Finance Act, 2026; no footnote is printed inside this Table at the pointer. Later amendments, rules and notifications should be checked, and the notified items named below are not in the text consulted.
If you pay a non-resident or are one, see our page on NRI tax filing.
The Table, serial numbers 1 to 17 (each cell as printed)
"Rates in force" is defined in section 2(90) and is the rate fixed by the annual Finance Act; it is not a figure and none is stated here.
| Serial number | Nature of income or sum | Payee | Payer | Rate |
|---|---|---|---|---|
| 1 | Any income referred to in section 211 | (a) A non-resident sportsman (including an athlete) or an entertainer, who is not a citizen of India; or (b) a non-resident sports association or institution | Any person | 20% |
| 2 | Any income by way of interest payable in respect of moneys borrowed in foreign currency from a source outside India, (a) under a loan agreement or issue of long-term infrastructure bond on or after the 1st July, 2012 but before the 1st July, 2023; or (b) by way of issue of any long-term bond on or after the 1st October, 2014 but before the 1st July, 2023, which is approved by the Central Government in this behalf | Any non-resident (not being a company) or a foreign company | Any Indian company or a business trust | 5% |
| 3 | Any income by way of interest payable in respect of moneys borrowed from a source outside India by way of issue of rupee denominated bond before the 1st July, 2023 | Any non-resident (not being a company) or a foreign company | Any Indian company or a business trust | 5% |
| 4 | Any income by way of interest payable in respect of moneys borrowed from a source outside India by way of issue of any long-term bond or rupee denominated bond, which is listed only on a recognised stock exchange located in any International Financial Services Centre | Any non-resident (not being a company) or a foreign company | Any Indian company or a business trust | (a) 4%, where such bonds are issued on or after the 1st April, 2020 but before the 1st July, 2023; or (b) 9%, where such bonds are issued on or after the 1st July, 2023 |
| 5 | Any income by way of interest | Any non-resident (not being a company) or a foreign company | Any infrastructure debt fund referred to in Schedule VII (Table: serial number 46) | 5% |
| 6 | Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: serial number 3) | Any unit holder, being a non-resident (not being a company) or a foreign company | Any business trust | (a) 5%, in case of income of the nature referred to in Schedule V ; and (b) 10%, in case of income of the nature referred to in Schedule V |
| 7 | Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: serial number 4) | Any unitholder, being a non-resident (not being a company) or a foreign company | Any business trust | Rates in force |
| 8 | Any income, other than that proportion of income which is exempt under Schedule V (Table: serial number 2), in respect of units of an investment fund specified in section 224 | Any unitholder, being a non-resident (not being a company) or a foreign company | Any investment fund specified in section 224 | Rates in force |
| 9 | Any income in respect of an investment in a securitisation trust specified in section 221 | Any investor, being a non-resident (not being a company) or a foreign company | Any securitisation trust specified in section 221 | Rates in force |
| 10 | Any income (a) in respect of units of a Mutual Fund specified under Schedule VII (Table: serial number 20 or 21); or (b) in respect of units from the specified company | Any non-resident (not being a company) or a foreign company | Any person | As per Note 2 |
| 11 | Any income in respect of units referred to in section 208 | Any offshore fund | Any person | 10% |
| 12 | Any income by way of long-term capital gains arising from the transfer of units referred to in section 208 | Any offshore fund | Any person | 12.5% |
| 13 | Any income by way of interest or dividends in respect of bonds or Global Depository Receipts referred to in section 209 | Any non-resident | Any person | 10% |
| 14 | Any income by way of long-term capital gains arising from the transfer of bonds or Global Depository Receipts referred to in section 209 | Any non-resident | Any person | 12.5% |
| 15 | Any income in respect of securities referred to in section 210(1) (Table: serial number 1) | Any Foreign Institutional Investor | Any person | As per Note 2 |
| 16 | Any income in respect of securities referred to in section 210(1) (Table: serial number 1) | A specified fund referred to in Schedule VI | Any person | 10% |
| 17 | Any interest (not being interest referred to against serial numbers 2, 3, 4 and 5) or any other sum chargeable under the provisions of this Act, not being income chargeable under the head "Salaries" | Any non-resident (not being a company) or a foreign company | Any person | Rates in force |
In the copy consulted the Table is cut by page breaks inside serial numbers 1, 3, 6 and 11, with the header repeated, and some words are letter-spaced ("A n y I n d i a n"). Every cell above was rebuilt from the lines on either side and read through the spacing. In serial number 2 the column D entry is "Any Indian company or a business trust" and the column C entry is "Any non-resident (not being a company) or a foreign company"; the words "foreign" and "business trust" interleave in the print and are assigned to the correct columns by the layout.
The Notes
Note 1. For serial numbers 2, 3 and 4, the interest payable shall be income to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan or the bond and its repayment. The rate so approved is not in the text consulted.
Note 2. For serial numbers 10 and 15, tax shall be deducted at the rate of (a) 20%; or (b) where an agreement referred to in section 159(1) or 159(2) applies to the payee and the payee has furnished a certificate referred to in section 159(8), as the case may be, the rate or rates in that agreement for such income, if such rate is lower than 20%. See our post on section 159 (relief under agreements).
Note 3. For serial number 17: (a) if interest is payable by the Government or a public sector bank or a public financial institution within the meaning of Schedule VII (Note 3), tax is deducted only at the time of payment in cash or by cheque, draft or any other mode; (b) the obligation to deduct tax at source and comply with this serial number extends to all persons, resident or non-resident, whether or not the non-resident has a residence, place of business or business connection in India, or any other presence in India.
Cross-references the Table makes
Serial number 1 refers to section 211; serial numbers 6 to 9 to sections 221, 223 and 224 and Schedule V; serial number 5 to Schedule VII; serial numbers 11 and 12 to section 208; serial numbers 13 and 14 to section 209; serial numbers 15 and 16 to section 210(1) and Schedule VI. "Investor" in serial number 9 has the meaning in section 221(6)(a) (section 402(20)). "Specified company" and "unit" have the meanings in section 402(36) and (42); "non-resident Indian" is in section 402(23). The notified features of these provisions (for example, which bonds are approved, which countries have agreements) are not in the text consulted. For the person who must deduct when the payer is not in India, see section 402(27)(g); this article does not explain it further.
Worked examples
Row 1. An Indian event company (invented) pays Rs. 10,00,000 to a non-resident entertainer who is not a citizen of India for income referred to in section 211. The rate is 20%: 20% of Rs. 10,00,000 = Rs. 2,00,000. There is no threshold column.
Row 4(b). An Indian company (invented) pays interest of Rs. 10,00,000 to a non-resident bondholder on a long-term bond listed only on a recognised stock exchange in an International Financial Services Centre, issued after 1 July 2023. The rate is 9%: 9% of Rs. 10,00,000 = Rs. 90,000. For a bond issued between 1 April 2020 and 30 June 2023 the rate is 4%: Rs. 40,000 on the same interest.
Rows 11 and 12. An offshore fund (invented) receives income of Rs. 5,00,000 in respect of units referred to in section 208 (10%: Rs. 50,000) and long-term capital gains of Rs. 8,00,000 from transfer of those units (12.5%: Rs. 1,00,000).
Row 15 and Note 2. A Foreign Institutional Investor (invented) has income of Rs. 10,00,000 in respect of securities referred to in section 210(1). Deduction is at 20%: Rs. 2,00,000. If an agreement referred to in section 159(1) or (2) applies to the investor, a certificate under section 159(8) has been furnished and the agreement provides a lower rate (say 10% for the illustration), tax is deducted at that lower rate: Rs. 1,00,000.
Row 17. An Indian business (invented) pays interest, not within serial numbers 2 to 5, to a non-resident individual. The rate is "Rates in force", which this article does not state; the Table prints no figure. Under Note 3(b) the obligation extends to the non-resident whether or not he has a presence in India.
Need help with TDS on payments to non-residents?
If you are about to pay interest, units income, fees or another sum to a non-resident, or you are a non-resident receiving such a payment, our team can help you identify the row, the payee test and the treaty position. Please contact us through the page for NRI tax filing.
Key takeaways
- No threshold: deduction is on the amount, at the rate in column E, at the earlier of credit and payment.
- Printed rates: 20%, 5%, 4% or 9%, 10%, 12.5%; serial numbers 7, 8, 9 and 17 say "Rates in force".
- Serial numbers 10 and 15: 20%, or a lower rate under an agreement where the certificate in section 159(8) is furnished (Note 2).
- Serial numbers 2 to 4: interest counts as income only up to the rate approved by the Central Government (Note 1).
- Serial number 17 reaches any payer, resident or non-resident, regardless of the non-resident's presence in India (Note 3).
Read next
- Section 393(3): winnings, cash withdrawals and payments to partners
- Section 393(4): cases where tax is not deducted at source
- Section 393(5) to (11): declaration and other rules
- Section 393: overview
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.