Section 393Tax Deducted at Source

How it works

Section 393 is the Income-tax Act, 2025 answering a drafting problem the 1961 Act had been accumulating for sixty years. Every time Parliament wanted to withhold tax on a new kind of payment it added another section: 194C, then 194H, 194-I and 194J, and eventually 194-O, 194Q, 194R and 194S, each with its own rate, threshold, provisos and exclusions, and each cross-referring to the others in ways only a specialist could hold in one head. The 2025 Act collapses that whole series into a single provision built out of tables. The payment you are making is a row, and the row tells you who has to deduct, at what rate, and above what threshold.

The most important thing to understand about the change is how little of it touches the money. This is a structural reform. A contractor payment still attracts 1% where the contractor is an individual or HUF and 2% otherwise, still tested against ₹30,000 for a single sum and ₹1,00,000 in aggregate for the year. Professional fees are still 10% above ₹50,000, technical services still 2%, commission and brokerage still 2% above ₹20,000, rent still 2% on plant, machinery and equipment and 10% on land, buildings, furniture and fittings. The rent threshold of ₹50,000 for a month or part of a month is routinely attributed to the new Act, and it does not belong to it: that came in on 1 April 2025 under the old Act, replacing the annual ₹2,40,000 test, a full year before Section 393 existed. Keeping those two dates apart is the single most useful discipline a deductor can bring to anything written about this change.

The cutover is by transaction, not by return. Section 393 governs a deduction where the credit or the payment, whichever comes first, falls on or after 1 April 2026. A deduction event that happened before that date stays on the 1961 Act and its old section number even though the statement reporting it is filed well into the 2026 calendar year, which is why the Q4 statement for FY 2025-26, due on 31 May 2026, was still an old-Act return on the old form. The Department's own illustration runs the other way: a payment for April 2026 credited on 30 April 2026 is deducted under Section 393(1), Table Sl. No. 6(i).

Section 393 runs from sub-section (1) to sub-section (11) and carries five tables. Three of them charge tax. 393(1) is the resident table, serial numbers 1 to 8, and it is where most deductors will spend all their time. 393(2) is the non-resident table, serial numbers 1 to 17. 393(3) covers payments to any person, serial numbers 1 to 7. The other two relieve rather than impose: 393(4), serial numbers 1 to 19, is the no-deduction table, and 393(6), with two entries, covers declarations for no deduction, which is where the self-declaration route familiar as Form 15G and Form 15H now sits. You will see the section described elsewhere as having three tables, or six. Three counts only the charging tables. Six appears to come from counting sub-section (5), which is prose covering the Government, the Reserve Bank of India, corporations exempt under a Central Act and notified mutual funds, and contains no table at all.

The resident table has four columns: A the serial number, B the nature of the income or sum, C the payer, and D the rate together with the threshold. Deduction is triggered on credit or payment, whichever is earlier, subject to the relief sub-sections. Most serial numbers are split further into roman-numeral sub-items, and some of those sub-items carry more than one rate in column D. That is what gives a citation its shape. A contractor payment is Section 393(1), Table Sl. No. 6(i). The 1% branch for an individual or HUF contractor is 6(i).D(a), and you append the column letter only when you are actually quoting a rate, because the row is 6(i) either way.

Some mappings are worth committing to memory. Interest on securities, old 193, is 5(i). Interest other than interest on securities, old 194A, splits by payer rather than by kind of interest: 5(ii) where the payer is a banking company, a co-operative society carrying on banking business or a post office running a notified Central Government scheme, and 5(iii) for every other specified person. Dividend, old 194, is serial number 7, the only entry in the resident table with no sub-items at all. Insurance commission, old 194D, is 1(i), and commission or brokerage other than insurance commission, old 194H, is 1(ii). Rent, old 194-I, is 2(ii), while rent paid by an individual or HUF who is not a specified person, old 194-IB, is 2(i). Purchase of immovable property, old 194-IA, is 3(i). Professional fees, technical fees, royalty and a director's remuneration, all of old 194J, sit in the single row 6(iii). Transfer of a virtual digital asset, old 194S, is 8(vi). Payments to non-residents under old 195 leave the resident table entirely and land at Section 393(2), Table Sl. No. 17, the residual entry at the end of that table, exactly as 195 was the residual provision before it.

Two overlaps catch people out. The first is commission. 1(ii) is the row where the payer is a specified person, but commission or brokerage paid by an individual or HUF who is not a specified person is picked up instead by 6(ii), the row that replaces old 194M and that also catches their contract payments and professional fees. The second is immovable property. At least one widely circulated mapping chart puts old 194-IA at 3(iii), and it does not belong there: 3(iii) is compensation or enhanced compensation on compulsory acquisition, old 194LA, at 10% with a ₹5,00,000 threshold, so following that chart on a flat purchase would put both the wrong rate and the wrong threshold on the deduction. One more piece of drafting is worth noticing while you are in the table. The enacted 6(i) has no separate sub-contractor limb the way old 194C did, so do not read one into it.

Salary is the exception the whole scheme is built around. It stays in a section of its own, Section 392, headed salary and accumulated balance due to an employee, which runs as eight prose sub-sections and contains no table and no serial numbers anywhere. Old 192A, the deduction at 10% where an employee is paid an accumulated provident fund balance of ₹50,000 or more, is now Section 392(7). The Act confirms the split from inside Section 393 itself: the column B text of 6(iii) carves out a director's remuneration on which tax is deductible under Section 392, which only makes sense if salary sits outside 393 altogether. If a conversion chart gives salary a Section 393 serial number, that chart is wrong, and it is worth asking what else in it is.

Quoting an old section number on a new return is not a cosmetic error. The section reference is validated against the financial year of the statement, so a statement for FY 2026-27 carrying 194J is rejected at TRACES rather than accepted with a warning. The deduction itself may have been perfectly correct, the challan may have been paid on time, and the return still does not go through. If the rejection lands close to the due date you inherit a late-filing consequence for what is really a labelling problem. The fix belongs upstream of the return: payroll and accounting software, deduction masters, vendor records and the internal templates that feed them all carry the old numbers, and changing them where the reference is generated is far cheaper than catching it at filing.

The forms moved with the Act, under Section 397(3)(b) read with Rule 219 of the Income-tax Rules, 2026. Form 24Q became Form 138, Form 26Q became Form 140, Form 27Q became Form 144, and the TCS return 27EQ became Form 143. The four challan-cum-statements, 26QB, 26QC, 26QD and 26QE, collapse into a single Form 141 filed under Section 393(1), with four schedules: A for rent paid by an individual or HUF, B for transfer of immovable property, C for payments to contractors and professionals by an individual or HUF, and D for virtual digital assets. Those schedules map back to Table Sl. Nos. 2(i), 3(i), 6(ii) and 8(vi) respectively. The certificates followed as well: 16B, 16C, 16D and 16E are now one Form 132, issued under Section 395(4). Quarterly due dates are unchanged at 31 July, 31 October, 31 January and 31 May. Form 141 keeps its own clock: pay within 30 days from the end of the month in which the deduction was made, and furnish the form within one month from the end of that month.

On the numeric payment codes, the four-digit codes that go on the challan and against each deduction in the return, this page does not reproduce them. Returns and challans under Section 393 do use such codes and you will need the correct one. The problem is that the published lists disagree with each other, not only on individual codes but on the range they occupy, and only the Department's own notification settles it. So take the code from the utility you are filing in, or from the CBDT notification, rather than from a blog post, this one included. A wrong payment code produces a challan that does not reconcile and a credit that never reaches the deductee, which is a much worse outcome than the minute it costs to look the code up at source.

A closing note on how settled the detail on this page is. The serial numbers above are the ones corroborated either by the Income Tax Department's own pages or by cross-references quoted from inside Section 393, where one part of the section names another by serial number. A handful of sub-items in the resident table do not have that support yet: principally the business trust, investment fund and securitisation trust entries at 4(ii) to 4(iv), and the specified senior citizen, benefit or perquisite and e-commerce entries at 8(iii) to 8(v), which currently rest on the bare text of the Act as reproduced by a single host. They are very likely right, but until a departmental page confirms them, verify them in the filing utility before you rely on them, and treat any chart that prints the whole table with equal confidence as a chart that has not checked.