All TDS Provisions Consolidated Into Single Section 393 Under the Income-tax Act 2025

The Income-tax Act 2025, which takes effect for deduction events occurring on or after 1 April 2026, rewrites the way Tax Deducted at Source (TDS) is presented in Indian law. Under the Income-tax Act 1961, the TDS rules sat in Chapter XVII-B and were spread across a long run of sections from 192 to 206. The 2025 Act gathers all of those provisions into a single consolidated clause, Section 393, set out as a simplified table. Per the Income Tax Department's e-filing TDS FAQ, this is a presentational change and not a change in TDS rates or tax policy, so a deductor's actual liability for a payment made on 1 April 2026 is governed by the same arithmetic that applied the day before.

This matters because TDS touches almost every taxpayer: your employer withholds it from salary each month, your bank withholds it on fixed-deposit interest, and a company withholds it on professional fees. If you want to see how a deduction flows through to your annual liability, Oquilia's TDS calculator and income tax calculator both read from the same slab configuration used in the worked example below.

What the Section Says

Section 393 of the Income-tax Act 2025 consolidates every TDS provision that was previously scattered across multiple sections of the Income-tax Act 1961 into one section, presented in a simplified tabular format. The table is organised by the status of the person receiving the payment, covering three categories: payees who are residents, payees who are non-residents, and any person. According to the Income Tax Department FAQ published on the e-filing portal (incometax.gov.in), the consolidation under Section 393 is a simplified tabular presentation and not a change in TDS rates or tax policy. It applies where the deduction event occurs on or after 1 April 2026.

The practical effect is that a deductor no longer navigates between separate numbered sections to find the right rate. Instead of locating Section 192 for salary, a different section for interest and yet another for contractor payments, the deductor reads down the Section 393 table to the row that matches the nature of the payment and the residential status of the payee. The table layout can be summarised as follows.

Because residential status decides which row applies, confirming it correctly before you deduct is now the first step, not an afterthought. Oquilia's glossary explains the statutory tests in plain language at residential status, and the core mechanics of withholding at TDS. The full statutory text of the Income-tax Act 2025 is available on the government's India Code repository (indiacode.nic.in), which remains the authoritative primary source for the wording of Section 393.

One point the FAQ is explicit about: consolidation does not reset your compliance calendar or your rate. If a payment attracted a particular rate of TDS under the 1961 Act on 31 March 2026, the same rate carries into the Section 393 table from 1 April 2026. The restructuring is designed to make the rule easier to find, not to alter the sum withheld.

Worked Example

Salary is the clearest illustration because the deductor, your employer, must estimate your full-year tax and spread the withholding across the 12 months of the year. The computation uses the income-tax slabs in force for the relevant financial year. The new-regime slab structure verified in Oquilia's rate configuration for FY 2025-26 is set out below; the deductor applies whichever year's rates are in force when the salary is paid.

Take an employee drawing a gross salary of Rs 14,00,000 for the year, taxed under the new regime. The employer first allows the standard deduction of Rs 75,000, leaving taxable income of Rs 13,25,000. Applying the slabs: the first Rs 4,00,000 is nil, the next Rs 4,00,000 is taxed at 5% (Rs 20,000), the next Rs 4,00,000 at 10% (Rs 40,000), and the remaining Rs 1,25,000 at 15% (Rs 18,750). That totals Rs 78,750. Because taxable income of Rs 13,25,000 exceeds the Section 87A rebate threshold of Rs 12,00,000, no rebate applies. Adding the 4% health and education cess of Rs 3,150 gives a total tax of Rs 81,900.

Spread across the year, the monthly TDS the employer deducts under what is now Section 393 is Rs 81,900 divided by 12, or Rs 6,825 a month. The table below shows how the same logic produces a very different answer for an employee whose income lands exactly at the rebate threshold.

The first row shows the single most useful number for salaried taxpayers in the new regime: an employee whose taxable income is exactly Rs 12,00,000 pays slab tax of Rs 60,000, which is fully wiped out by the Section 87A rebate of Rs 60,000, leaving zero tax and therefore zero monthly TDS. The second row shows that once taxable income crosses Rs 12,00,000, the rebate falls away entirely and withholding begins. You can reproduce both figures with the old vs new regime calculator, which uses the same Rs 75,000 standard deduction and Rs 60,000 rebate constants. The rebate rule itself is explained at tax rebate.

Common Mistakes

The first mistake the Income Tax Department sees in TDS scrutiny is treating the 1 April 2026 consolidation as a rate change. It is not. The FAQ states plainly that Section 393 is a tabular presentation and not a change in rates, so a deductor who lowers or raises a withholding rate on the strength of the new section number has misread the law and will face a short-deduction demand.

The second mistake is misclassifying the payee's residential status. Because Section 393 is organised around the resident, non-resident and any-person categories, deducting at a resident rate for a payee who is actually non-resident, or the reverse, produces the wrong row and the wrong rate. Residential status is tested year by year, so a payee who was resident in FY 2024-25 is not automatically resident in FY 2026-27.

The third mistake is forgetting the 4% health and education cess on salary TDS. In the Rs 14,00,000 example the cess added Rs 3,150 to the annual figure; omitting it understates the monthly deduction by Rs 262 and leaves the employee with a shortfall payable as self-assessment tax at filing, often with interest.

The fourth mistake is assuming no TDS applies simply because final tax is nil after the Section 87A rebate. The rebate is available only in the old or new regime as the law prescribes, and only up to the Rs 12,00,000 threshold in the new regime for FY 2025-26; an employee at Rs 13,25,000 taxable income who assumes the rebate still applies will find Rs 81,900 of tax and Rs 6,825 a month of TDS that they did not plan for.

The fifth mistake is deducting under the old section numbers in internal payroll systems after 1 April 2026. While the rate is unchanged, challans, returns and TDS certificates should reference the structure in force. The authoritative wording to check is on indiacode.nic.in, and the operational guidance is on the e-filing portal at incometax.gov.in.

FAQ

Does Section 393 change how much TDS is deducted from my salary?

No. Per the Income Tax Department FAQ on incometax.gov.in, Section 393 of the Income-tax Act 2025 is a simplified tabular presentation of TDS rules and not a change in TDS rates or tax policy. A salary paid on or after 1 April 2026 is withheld on exactly the same basis as before; only the location of the rule in the statute has changed.

When does Section 393 start to apply?

It applies where the deduction event occurs on or after 1 April 2026. A payment made on 31 March 2026 is still governed by the Income-tax Act 1961; a payment made on 1 April 2026 falls under the consolidated Section 393 table of the Income-tax Act 2025.

Which sections of the old Act does Section 393 replace?

Under the Income-tax Act 1961, TDS provisions were spread across Chapter XVII-B, running from Section 192 onwards. The Income-tax Act 2025 gathers these scattered provisions into the single Section 393, presented as one table. The full mapping is set out in the Act's text on indiacode.nic.in.

How is the Section 393 table organised?

It is organised by the residential status of the payee, with rows for residents, non-residents and any person. The deductor identifies the nature of the payment and the payee's status, then reads the applicable rate from the matching row rather than searching across separate numbered sections.

If my taxable income is Rs 12,00,000, will my employer deduct TDS?

In the new regime for FY 2025-26, taxable income of exactly Rs 12,00,000 produces slab tax of Rs 60,000, which is fully offset by the Section 87A rebate of Rs 60,000, leaving nil tax and nil monthly TDS. Once taxable income crosses Rs 12,00,000 the rebate is lost and withholding begins, as the Rs 14,00,000 example above shows.

Do non-residents face different TDS under Section 393?

Yes, because Section 393 has a separate row category for non-resident payees. Non-resident withholding interacts with treaty relief and foreign-remittance reporting, so the residential status test must be settled before the rate is picked. See the residential status glossary entry for the statutory tests.

Where can I verify the rate for a specific payment?

The authoritative text of Section 393 is on the government's India Code repository at indiacode.nic.in, and the operational TDS FAQ is on the e-filing portal at incometax.gov.in. For salary, you can model the monthly deduction using Oquilia's income tax calculator, which applies the current slabs, the Rs 75,000 standard deduction and the Rs 60,000 rebate.