The Income-tax Act, 2025 puts every TDS rate and threshold in tables inside section 393, with a separate table for payments to residents and to non-residents. Salary is section 392 and TCS is section 394.
There is no TDS rate Schedule in the Income-tax Act, 2025. Schedule IX is read with section 48 and carries the tea, coffee and rubber development account deduction. TDS rates are in the tables inside section 393.
Where the TDS rates are
Section 393 is the biggest structural change in the Act. About forty separate TDS sections of the Income-tax Act, 1961 — the whole 194 series, section 195 and the 196 series — are consolidated into one section with tables.
The resident table has four columns: nature of income or sum, payer, rate and threshold limit. The non-resident table adds a payee column, because the identity of the recipient matters there.
Deduction is made on the entire amount where the amount or aggregate exceeds the threshold, at the rate in the table, at the time of credit or payment, whichever is earlier.
The Income-tax Act, 2025 takes effect from 1 April 2026 and applies from tax year 2026-27. The Income-tax Act, 1961 continues to govern every year up to 31 March 2026 because of the repeal and savings provision in section 536. The Schedule contents described here are taken from the Act as enacted, incorporating the corrigenda notified in the Gazette on 3 September 2025.
Where each provision actually sits
| Topic | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| Contractor payments | Section 194C | Section 393 — resident table |
| Professional and technical fees | Section 194J | Section 393 — resident table |
| Rent | Section 194-I | Section 393 — resident table |
| Commission and brokerage | Section 194H | Section 393 — resident table |
| Interest other than on securities | Section 194A | Section 393 — resident table |
| Payments to non-residents | Section 195 | Section 393 — non-resident table |
| Salary and PF accumulated balance | Sections 192 and 192A | Section 392 |
| Tax collected at source | Section 206C | Section 394 |
| Lower or nil deduction certificate | Section 197 | Section 395 |
| Consequences of default | Section 201 | Section 398 |
Reading the section 393 tables
Sub-section (1) — the mechanics
Where income or a sum of the nature in column B is credited, paid or distributed by the person in column C during the tax year to a resident, tax is deducted (a) on the entire amount where the amount or aggregate exceeds the threshold in column D; (b) at the rate in column D; (c) at credit or payment, whichever is earlier; and (d) subject to sub-sections (4), (5), (6), (8) and (9).
Examples from the resident table
Commission or brokerage other than insurance commission — 2% with a ₹20,000 threshold, where the payer is a specified person. Rent — 2% where the payer is not a specified person, and for a specified person 2% for machinery, plant or equipment and 10% for land, building, furniture or fittings, with a threshold of ₹50,000 for a month or part of a month.
Transfer of immovable property
1% of the higher of the consideration and the stamp duty value, with a threshold of fifty lakh rupees. This is the successor to section 194-IA, and note that the base is the higher of the two figures, not simply the price.
The non-resident table
Income of a non-resident sportsman or sports association at 20%; interest on rupee denominated bonds and specified borrowings payable by an Indian company or business trust at 5%; interest from an infrastructure debt fund at 5%; income of a non-resident unit holder of an investment fund at rates in force; and income of Foreign Institutional Investors from securities.
Conditions for no deduction
A further set of tables in the section lists, payment by payment, the conditions in which no deduction is to be made — thresholds not crossed, payments to specified institutions, and declarations. These replace what the 1961 Act carried in provisos and section 197A.
What Schedule IX actually contains
Schedule IX is read with section 48 and gives the deduction for the tea development account, coffee development account and rubber development account. The quantum is the amount deposited or 40% of the profits of the business computed before this deduction, whichever is less, allowed before set off of brought-forward losses under section 112.
Worked example
Payments in tax year 2026-27 and where each is dealt with.
| Payment | Old section | New position |
|---|---|---|
| ₹8,00,000 to a civil contractor | 194C | Row in the section 393 resident table |
| ₹3,00,000 professional fees | 194J | Row in the section 393 resident table |
| ₹90,000 a month office rent to a specified person | 194-I | 10% for building, threshold ₹50,000 a month |
| ₹25,000 commission | 194H | 2%, threshold ₹20,000 |
| Purchase of a flat for ₹80,00,000, stamp duty value ₹86,00,000 | 194-IA | 1% of ₹86,00,000 — the higher figure |
| Salary | 192 | Section 392, average rate on estimated income |
The fifth row is worth noting. The deduction base is the higher of consideration and stamp duty value, so a below-circle-rate purchase increases the tax to be deducted as well as triggering section 78 in the seller's hands.
Compliance checklist
- Re-map every TDS code in your software from a 194-series section to a section 393 table row.
- Keep salary in section 392 and TCS in section 394.
- Apply the threshold to the amount or aggregate during the tax year, not per invoice.
- Deduct at credit or payment, whichever is earlier.
- For immovable property, compute on the higher of consideration and stamp duty value.
- Check the conditions for no deduction tables before concluding that no deduction is required.
- Apply for a lower or nil rate under section 395.
Common mistakes
- Searching the Schedules for a TDS rate table; none exists.
- Citing 194C or 194J for periods from 1 April 2026.
- Applying the rent threshold annually when the table expresses it per month or part of a month.
- Deducting on the consideration alone for immovable property where the stamp duty value is higher.
- Treating salary TDS as part of section 393.
All sixteen Schedules of the Income-tax Act, 2025
Because the numbering is widely misquoted, the full list is reproduced below from the Act as enacted. Note that Schedules II to VII are all exemption lists, split by who is claiming rather than by what the income is.
| Schedule | Read with | Subject as enacted |
|---|---|---|
| I | section 9(12) | Conditions for certain activities not to constitute business connection in India |
| II | section 11 | Income not to be included in total income |
| III | section 11 | Income not to be included in total income of eligible persons |
| IV | section 11 | Income not to be included in total income of eligible non-residents, foreign companies and other such persons |
| V | section 11 | Income not to be included in total income of certain eligible persons including investment funds, business trusts and their unit holders |
| VI | section 11 | Income not to be included in total income of certain eligible persons in an International Financial Services Centre or having income therefrom |
| VII | section 11 | Persons exempt from tax |
| VIII | section 12 | Income not to be included in the total income of political parties and electoral trusts |
| IX | section 48 | Deduction for tea, coffee and rubber development accounts |
| X | section 49 | Deduction for Site Restoration Fund |
| XI | section 2(91) | Recognised provident funds, approved superannuation funds and approved gratuity funds |
| XII | section 51 | Minerals, and groups of associated minerals |
| XIII | section 45(2) | List of articles or things |
| XIV | section 55 | Insurance business |
| XV | section 123 | Deduction for life insurance premia, contribution to provident fund, subscription to certain equity shares, etc. |
| XVI | section 350 | Permitted modes of investment or deposits by a registered non-profit organisation |
This is an explanatory guide, not tax advice, and it does not reproduce the section in full. Read the bare text of the section before you rely on it, and check for later amendments, the Income-tax Rules made under the new Act, and CBDT circulars and notifications.