Income-tax Act, 2025: new TDS sections 392/393 and payment codes

From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act. Salary TDS moved to Section 392, most other TDS to a consolidated Section 393 with payment codes, and TCS to Section 394.

• The Income-tax Act, 2025 applies from 1 April 2026 (tax year 2026-27 onwards). Transactions up to 31 March 2026 remain governed by the 1961 Act.
• Salary TDS (old Section 192) moves to Section 392.
• Non-salary TDS (old 193–196 series, e.g. 194C, 194J, 194I, 194H, 194Q) is consolidated into Section 393, organised as tables for residents, non-residents and specified transactions. Each nature of payment is identified by a payment code used in challans and returns.
• TCS (old 206C series) moves to Section 394.

What stays broadly the same

Published mapping tables show that most rates and thresholds were carried over (e.g. contractors 1%/2%, professional fees 10%, technical fees 2%). Always confirm the payment code and rate from the Act and CBDT's official mapping before configuring software.

Action list for accounts teams

• Update TDS nature-of-payment masters in Tally/ERP with the new section and payment code, effective 1 April 2026.
• Keep old-Act sections for FY 2025-26 corrections and returns.
• Update vendor onboarding forms and internal checklists.