The new Income-tax Act has gathered TDS into three sections. For payments made on or after 1 April 2026:
- Section 392 — TDS on salary (and EPF withdrawals), formerly 192 and 192A.
- Section 393 — TDS on everything else, set out in tables: payments to residents, payments to non-residents, and payments by any person. This replaces 193, the whole 194 series and 195.
- Section 394 — TCS, formerly 206C.
Challans and TDS returns now identify the payment by its section 393 entry and payment code, not by "194J" or "194C". A return for the 2026-27 quarters that uses an old section code will fail validation.
What did not change
The rates and thresholds set by the Finance Act, 2025 carried across. The ones businesses use most:
| Payment | Old section | Rate | TDS starts above |
|---|---|---|---|
| Professional fees | 194J | 10% | ₹50,000 a year |
| Technical services | 194J | 2% | ₹50,000 a year |
| Contractors | 194C | 1% individual / HUF, 2% others | ₹30,000 per payment or ₹1,00,000 a year |
| Rent — building or furniture | 194I | 10% | ₹50,000 a month |
| Rent — plant and machinery | 194I | 2% | ₹50,000 a month |
| Commission or brokerage | 194H | 2% | ₹20,000 a year |
| Interest from a bank | 194A | 10% | ₹50,000 a year (₹1,00,000 for seniors) |
| Partners' remuneration and interest | 194T | 10% | ₹20,000 a year |
Without the payee's PAN, TDS is still the higher of 20% and twice the normal rate.
The transition
Payments up to 31 March 2026 stay under the old sections — including the January–March 2026 quarter, whose returns were filed in May 2026. Everything paid from 1 April 2026 uses the new ones. If you are correcting an old return, keep the old codes for it.
Checklist for your accounts team
- Ledger and vendor masters — map every TDS ledger and vendor in Tally or your ERP to its section 393 entry.
- Challans — use the new payment codes for tax deducted from April 2026.
- Returns — make sure your return software is updated for the new schema before the quarter's filing.
- Lower-deduction certificates — check whether certificates issued under the old Act have been re-issued or remain valid for the new period.
- Form 16 and 16A — certificates for the new period quote the new sections; old-period certificates keep the old ones.
- Deposit dates are unchanged — the 7th of the following month, and 30 April for March.
This article is general information based on the law as it stood on 22 Sep 2026. It is not advice for your situation — rules and dates change, and the right answer depends on your facts. Speak to us before acting on it.