Section 393 of Income Tax Act, 2025: TDS Rates, Payments Covered, Due Dates

The Income Tax Act 2025 has consolidated TDS deduction for different kinds of transactions into one umbrella section - section 393. Also, the section covers the time of TDS deduction, exemptions, lower tax deductions, etc.

Section 393 is applicable from 01st April, 2026.

What is Section 393 of the Income Tax Act?

• The provisions related to deduction of tax at source are covered under section 393 of the Income Tax Act, 2025. 
• Under the old act, the TDS provisions were divided into many sections, each covering a different kind of transaction. The provisions, which could be well fitted into one section, were unnecessarily divided into many. 
• Also, the insertion of TDS provisions for new sections became difficult, as there would be disruption in the sequence, numbering and the flow of sections of the act. 
• To ensure comfortable reference and easy insertion of provisions for new transitions, the TDS provisions for all transactions (other than salary) are covered in section 393 of the new Act. 
• TDS provisions for salary are covered under section 392 of the Income Tax Act, 2025.

Section 393 - Applicability and Scope

• Section 393 applies to specified transactions taking place from 1st April, 2026.
• For the transactions undertaken until March 31st, 2026, the provisions of the old Income Tax Act 1961 shall apply.

Payments covered under Section 393

Section 393 divides the transactions into the following categories:

• Payment to residents
  • Commission or brokerage
  • Rent
  • Payment on transfer of certain immovable property other than agricultural land
  • Income from the capital market
  • Interest income
  • Payments to contractors, fees for professional and technical services, etc.
  • Dividend
  • Others
• Payment to non-residents
• Common provisions related to payments made to any person

The prescribed rates and threshold limits are covered under the TDS rate chart.

Section 393(4) - TDS Exemptions

Despite the threshold limit, TDS does not need to be deducted in the following cases as per the provisions of section 393(4) of the Income Tax Act, 2025.

Section 393(6) - Nil TDS Certificate

The assessee can eliminate TDS deduction by submitting Form 121 to the person responsible for paying money and deducting TDS. He can make an application to the income tax authorities electronically, and should submit the certificate to each payer for nil TDS deduction.

The following category of transactions are eligible for nil TDS deduction for resident individuals.

1. payment of accumulated PF balance
2. Insurance Commission
3. Rent 
4. Income from units of mutual fund
5. Interest income
6. Life insurance policy payment
7. Dividend

TDS Deposit Due Date

As per the provisions of the new act, there has been no changes to the due dates within which TDS deduction should be remitted to the government. 

Final Word

Section 393 of the new Income Tax Act, 2025 not only covers all non salary payments but also covers the provisions related to lower deduction certificates. Aligning with the provisions of the new act, TDS provisions are simplified and tabulated for seamless reference and compliance.