Chapter XIX - Collection and Recovery of Tax
Section 393
Section 393: tax to be deducted at source - the master TDS rate table
Section 393 groups non-salary TDS obligations into payments to residents, non-residents and any person. Each table identifies the payment, relevant persons and rate; accompanying notes govern thresholds, timing, overlap and exceptions. The section also covers nil-tax declarations, suspense-account credits and tax borne by the payer.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where any income or sum of the nature specified in column B of the Table below, is credited or paid or distributed by the person specified in column C during the tax year, to a resident, the person responsible for paying such income or sum shall deduct income-tax,— (a) on the entire amount of such income or sum, where the amount or aggregate of amounts exceeds the threshold limit specified in column D, or on sum as per Note 1 for serial number 8(ii), as the case may be; (b) at the rate specified in column D; (c) at the time of credit of such income or sum to the account of the payee or at the time of its payment in cash or by way of a cheque or a draft or by any other mode, whichever is earlier; and (d) subject to the provisions of sub-sections (4), (5), (6), (8) and (9).
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 1(i) | Any income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of insurance policies). | Any person. | Rate: Rates in force. Threshold limit: ₹20,000. |
| 1(ii) | Any income by way of commission [not being insurance commission referred to in serial number 1(i)] or brokerage. | Specified person. | Rate: 2% Threshold limit: ₹20,000. |
| 2(i) | Any income by way of rent. | Person other than specified person. | Rate: 2% Threshold limit : ₹50,000 for a month or part of a month. |
| 2(ii) | Any income by way of rent. | Specified person. | Rate: (a) 2%, for the use of any machinery or plant or equipment; and (b) 10%, for the use of any land, or building (including factory building), or land appurtenant to a building (including factory building), or furniture, or fittings. Threshold limit [for (a) and (b)]: ₹50,000 for a month or part of a month. |
Note 1.—In serial number 2(i), the tax shall be deducted on such income at the time of— (a) credit of rent to the account of the payee; or (b) payment thereof in cash or by way of a cheque or a draft or any other mode, whichever is earlier, for the last month of the tax year or the last month of tenancy.
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 3(i) | Any consideration for transfer of any immovable property (other than agricultural land). | Person [other than the person who are required to deduct tax under serial number 3(iii)]. | Rate: 1% of— (a) consideration for transfer of the immovable property; or (b) stamp duty value of such property, whichever is higher. Threshold limit: Fifty lakh rupees and as per Note 3. |
| 3(ii) | Any consideration, not being consideration in kind, under the agreement referred to in section 67(14). | Any person. | Rate: 10% Threshold limit: Nil. |
| 3(iii) | Any sum, being in the nature of— (a) compensation or the enhanced compensation; or (b) consideration or the enhanced consideration, on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land). | Any person. | Rate: 10% Threshold limit: ₹5,00,000. |
Note 1.—Consideration for transfer of any immovable property under serial number 3(i) shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property for the purposes of the threshold limit mentioned in column D. Note 2.—In case of consideration on which provisions of both serial numbers 3(i) and 3(ii) are applicable, tax shall be deducted under 3(ii) only. Note 3.—For the purposes of serial number 3(i), the income-tax shall be deducted where consideration for transfer of any immovable property or the stamp duty value of such property, is equal to or greater than fifty lakh rupees.
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 4(i) | Any income in respect of— (a) units of a Mutual Fund specified under Schedule VII (Table: Sl. No. 20 or 21); or (b) units from the Administrator of the specified undertaking; or (c) units from the specified company. | Any person. | Rate: 10% Threshold limit: ₹10,000. |
| 4(ii) | Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: Sl. Nos. 3 and 4), payable to a unitholder of a Business Trust. | Any Business Trust. | Rate: 10% Threshold limit: Nil. |
| 4(iii) | Any income, other than that proportion of income which is exempt under Schedule V (Table: Sl. No. 2), in respect of units of an investment fund specified in section 224, payable to its unitholder. | Any Investment fund specified in section 224. | Rate: 10% Threshold limit: Nil. |
| 4(iv) | Any income, in respect of an investment in a securitisation trust specified in section 221 to an investor. | Any securitisation trust specified in section 221. | Rate: 10% Threshold limit: Nil. |
| 5(i) | Any income by way of Interest on securities. | Any person. | Rate: Rates in force. Threshold limit: ₹10,000. |
| 5(ii) | Any income by way of interest other than interest on securities. | (a) A banking company; or (b) a co-operative society carrying on the business of banking; or (c) a post office for a deposit made under a scheme notified by the Central Government. | Rate: Rates in force. Threshold limit: (a) ₹1,00,000 in the case of a senior citizen; (b) ₹50,000 in case of person other than senior citizen. |
| 5(iii) | Any income being interest other than interest on securities. | Specified person [other than person in Sl. No. 5 (ii). C]. | Rate: Rates in force. Threshold limit: ₹10,000. |
Note 1.—In serial numbers 5(ii) and (iii), where the interest income credited or paid is in respect of— (a) time deposits with a banking company; or (b) time deposits with a co-operative society engaged in carrying on the business of banking; or (c) deposits with a public company formed and registered in India with the main object of carrying on business of long-term finance for construction or purchase of houses in India for residential purposes and is eligible for deduction under section 32(e), and the person mentioned in column C has not adopted core banking solutions, the threshold limit in column D shall be computed with reference to the income credited or paid by a branch of such person. Note 2.—The person responsible for making the payment referred to in serial number 5(ii) and (iii) of this Table, may at the time of making any deduction, increase or reduce the amount to be deducted for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the tax year.
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 6(i) | Any sum for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a designated person. | Any designated person. | Rate : (a) 1%, if contractor is individual or Hindu undivided family; (b) 2%, if contractor is a person other than the person mentioned in (a). Threshold limit: [for (a) and (b)] (a) ₹30,000; for any such sum; and (b) ₹1,00,000 in case of aggregate of such sums. |
| 6(ii) | Any sum— (a) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract; or (b) by way of fees for professional services; or (c) by way of commission [not being insurance commission referred to in serial number 1(i)] or brokerage. | Any person, being an individual or Hindu undivided family [other than those required to deduct incometax as per Sl. No. 6(i) and (iii) or Sl. No. 1(ii)]. | Rate: 2% Threshold limit: Fifty lakh rupees. |
| 6(iii) | Any sum by way of— (a) fees for professional services; or (b) fees for technical services; or (c) remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 392, to a director of a company; or (d) royalty; or (e) any sum referred to in section 26(2)(h). | Specified person. | Rate: (a) 2% of such sum in case of— (i) fees for technical services (not being a professional services); or (ii) royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; or (iii) payee, engaged only in the business of operation of call centre; (b) 10% of such sum in cases other than (a). Threshold limit: (i) for (a), (b), (d) and (e) of Col. B: ₹50,000. (ii) for (c) of Col. B: Nil. |
Note.—In serial number 6(i), if any sum is paid or credited for carrying out any work specified in section 402(47)(e), tax shall be deducted at source— (a) on the invoice value excluding the value of material, if such value is specified separately in the invoice; or (b) on the whole of the invoice value, if the value of material is not specified separately in the invoice.
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 7 | Any dividend (including dividend on preference shares) declared. | Any domestic company. | Rate: 10% Threshold limit: Nil. |
Note.—The tax shall be deducted at source before making any distribution or payment of dividend.
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 8(i) | Any sum under a life insurance policy, including the sum allocated as bonus on such policy, other than the amount not includible in the total income under Schedule II (Table: Sl. No. 2). | Any person. | Rate : 2% on income comprised in such sum. Threshold limit: ₹1,00,000. |
| 8(ii) | Any sum exceeding fifty lakh rupees for purchase of any goods. | Any person, being a buyer. | Rate: 0.1% Threshold limit: As per Note 1. |
| 8(iii) | Total income of a specified senior citizen after giving effect to deduction allowable under Chapter VIII and rebate allowable under section 156. | Specified bank. | Rate: Rates in force. Threshold limit: As applicable. |
| 8(iv) | Any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession of any resident. | Specified person. | Rate: 10% of value or aggregate of values of such benefit or perquisite. Threshold limit: ₹20,000. |
| 8(v) | Any sum on account of sale of goods or provision of services by an e-commerce participant, facilitated by an e-commerce operator through its digital or electronic facility or platform. | Any e-commerce operator. | Rate: 0.1% of gross amount of such sale or services or both. Threshold limit: Nil. |
| 8(vi) | Any sum by way of consideration for transfer of a virtual digital asset. | Any person. | Rate: 1% Threshold limit: Nil. |
Note 1.—(a) The deduction of tax under serial number 8(ii) shall not apply to a transaction on which tax is deductible or collectible under any of the provisions of the Act. (b) The tax shall be deducted on the sum exceeding fifty lakh rupees. Note 2.—The provisions of serial number 8(iv) shall also apply to any benefit or perquisite, whether in cash or in kind or partly in cash and partly in kind, provided to a resident and before providing such benefit or perquisite, as the case may be, the person responsible for providing such benefit or perquisite shall ensure that tax has been deducted. Note 3.—In respect of serial number 8(v)— (a) for deduction of tax, the provisions thereof shall take precedence over any other provisions of this Chapter; (b) any payment made by a purchaser of goods or recipient of services directly to an e-commerce participant for the sale of goods or provision of services or both, facilitated by an e-commerce operator, shall be deemed to be the amount credited or paid by the e-commerce operator to the e-commerce participant and this amount shall be included in the gross amount of such sale or services for the purposes of deduction of income-tax under this serial number; (c) e-commerce operator shall be deemed to be the person responsible for paying to e-commerce participant; (d) irrespective of anything contained in this Chapter, if— (i) tax has been deducted on a transaction under this serial number; or (ii) a transaction is not liable for tax deduction as provided in section 393(4) (Table: Sl. No. 11), then tax shall not be deducted on such transaction under any other provision of this Chapter; (e) clause (d) shall not apply to any amount or aggregate of amounts received or receivable by an e-commerce operator for—(i) hosting advertisements; or (ii) providing any other services, which are not in connection with the sale or services referred to in this serial number. Note 4.—In case of a transaction on which provisions of serial number 8(v) are applicable along with the provisions of serial number 8(vi) for deduction of tax, then irrespective of anything contained in Note 3, tax on such transaction shall be deducted only under the provisions of serial number 8(vi). Note 5.—The provisions of serial number 8(iii) shall take precedence over any other provisions of this Chapter and tax shall be deducted under this provision. Note 6.—For serial number 8(iv) and (vi),— (a) where the consideration or, benefit or perquisite provided, as the case may be,— (i) is in exchange of another virtual digital asset where there is no part in cash, in respect of serial number 8(iv); or (ii) is wholly in kind; or (iii) is partly in kind and partly in cash, but such part in cash is not sufficient to meet the liability of deduction of tax in respect of the whole of such payment or benefit or perquisite, the person responsible for paying or providing shall ensure that the tax required to be deducted has been paid, before releasing such consideration or providing such benefit or perquisite, as the case may be; (b) “person responsible for providing” means the person providing such benefit or perquisite, or in case of a company, the company itself including the principal officer thereof.
(2) Where any income or sum of the nature specified in column B of the Table below, is credited or paid by the person specified in column D during the tax year, to a non-resident specified in column C, the person responsible for paying such income or sum shall deduct income-tax on the amount of such income or sum,— (a) at the rate specified in column E; (b) at the time of credit of income or sum to the account of the payee or at the time of its payment in cash or by way of a cheque or a draft or by any other mode, whichever is earlier; and (c) subject to the provisions of sub-sections (4), (8) and (9).
| Sl. No. | Nature of income or sum | Payee | Payer | Rate |
|---|---|---|---|---|
| 1 | Any income referred to in section 211. | (a) A non-resident sportsman (including an athlete) or an entertainer, who is not a citizen of India; or (b) a non-resident sports association or institution. | Any person. | 20% |
| 2 | Any income by way of interest payable in respect of moneys borrowed in foreign currency from a source outside India,— (a) under a loan agreement or issue of longterm infrastructure bond on or after the 1st July, 2012 but before the 1st July, 2023; or (b) by way of issue of any longterm bond on or after the 1st October, 2014 but before the 1st July, 2023, which is approved by the Central Government in this behalf. | Any non-resident (not being a company) or a foreign company. | Any Indian company or a business trust. | 5% |
| 3 | Any income by way of interest payable in respect of moneys borrowed from a source outside India by way of issue of rupee denominated bond before the 1st July, 2023. | Any non-resident (not being a company) or a foreign company. | Any Indian company or a business trust. | 5% |
| 4 | Any income by way of interest payable in respect of moneys borrowed from a source outside India by way of issue of any longterm bond or rupee denominated bond, which is listed only on a recognised stock exchange located in any International Financial Services Centre. | Any non-resident (not being a company) or a foreign company. | Any Indian company or a business trust. | (a) 4%, where such bonds are issued on or after the 1st April, 2020 but before the 1st July, 2023; or (b) 9%, where such bonds are issued on or after the 1st July, 2023. |
| 5 | Any income by way of interest. | Any non-resident (not being a company) or a foreign company. | Any infrastructure debt fund referred to in Schedule VII (Table: Sl. No. 46). | 5% |
| 6 | Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: Sl. No. 3). | Any unit holder, being a non-resident (not being a company) or a foreign company. | Any business trust. | (a) 5%, in case of income of the nature referred to in Schedule V [Table: Sl. No. 3. B(a)]; and (b) 10%, in case of income of the nature referred to in Schedule V [Table: Sl. No. 3. B(b)]. |
| 7 | Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: Sl. No. 4). | Any unitholder, being a non-resident (not being a company) or a foreign company. | Any business trust. | Rates in force. |
| 8 | Any income, other than that proportion of income which is exempt under Schedule V (Table: Sl. No. 2), in respect of units of an investment fund specified in section 224. | Any unitholder, being a non-resident (not being a company) or a foreign company. | Any investment fund specified in section 224. | Rates in force. |
| 9 | Any income in respect of an investment in a securitisation trust specified in section 221. | Any investor, being a non-resident (not being a company) or a foreign company. | Any securitisation trust specified in section 221. | Rates in force. |
| 10 | Any income— (a) in respect of units of a Mutual Fund specified under Schedule VII (Table: Sl. No. 20 or 21); or (b) in respect of units from the specified company. | Any non-resident (not being a company) or a foreign company. | Any person. | As per Note 2. |
| 11 | Any income in respect of units referred to in section 208. | Any offshore fund. | Any person. | 10% |
| 12 | Any income by way of long-term capital gains arising from the transfer of units referred to in section 208; | Any offshore fund. | Any person. | 12.5% |
| 13 | Any income by way of interest or dividends in respect of bonds or Global Depository Receipts referred to in section 209. | Any non-resident. | Any person. | 10% |
| 14 | Any income by way of long-term capital gains arising from the transfer of bonds or Global Depository Receipts referred to in section 209. | Any non-resident. | Any person. | 12.5% |
| 15 | Any income in respect of securities referred to in section 210(1) (Table: Sl. No. 1). | Any Foreign Institutional Investor. | Any person. | As per Note 2. |
| 16 | Any income in respect of securities referred to in section 210(1) (Table: Sl. No. 1). | A specified fund referred to in Schedule VI [Note 1(g)]. | Any person. | 10% |
| 17 | Any interest (not being interest referred to against serial numbers 2, 3, 4 and 5) or any other sum chargeable under the provisions of this Act, not being income chargeable under the head “Salaries”. | Any non-resident (not being a company) or a foreign company. | Any person. | Rates in force. |
Note 1.—For serial numbers 2, 3 and 4, the interest payable shall be income to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan or the bond and its repayment. Note 2.—For serial numbers 10 and 15, tax shall be deducted at the rate of— (a) 20%; or (b) where an agreement referred to in section 159(1) or 159(2) applies to the payee and if the payee has furnished a certificate referred to in section 159(8), as the case may be, then, income-tax shall be deducted at the rate or rates of income-tax provided in such agreement for such income, if such rate is lower than 20%. Note 3.—For serial number 17,— (a) if interest is payable by the Government or a public sector bank or a public financial institution within the meaning of Schedule VII (Note 3), deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode; (b) the obligation to deduct tax at source and comply with the provisions of this serial number extend to all persons resident or non-resident, whether or not, the non-resident person has— (i) a residence or place of business or business connection in India; or (ii) any other presence in any manner whatsoever in India.
(3) Where any income or sum of the nature specified in column B of the Table below, is credited or paid by the person specified in column C during the tax year, to any person, the person responsible for making payment of such income or sum, shall deduct income-tax— (a) on the entire amount of such income or sum, where the amount or aggregate of amounts exceed the threshold limit specified in column D, or on net winnings as per Note 1 of the Table; (b) at the rate specified in column D; (c) at the time of payment thereof in cash or by way of a cheque or a draft or by any other mode, or as specified therein; and (d) subject to the provisions of sub-sections (4), (5), (6), (8) and (9).
| Sl. No. | Nature of income or sum | Payer | Rate / Threshold limit |
|---|---|---|---|
| 1 | Any income by way of winnings (other than winnings from online games as referred to in serial number 2) from— (a) any lottery; or (b) crossword puzzle; or (c) card game and other game of any sort; or (d) gambling or betting of any form or nature whatsoever. | Any person. | Rate: Rates in force. Threshold limit: ₹10,000 in case of a single transaction. |
| 2 | Any income by way of winnings from online game. | Any person. | Rate: Rates in force. Threshold limit: As per Note 1. |
| 3 | Any income by way of winnings from any horse race. | Any person, being a bookmaker or a person to whom a licence has been granted by the Government under any law for the time being in force for horse racing in any race course or for arranging for wagering or betting in any race course. | Rate: Rates in force. Threshold limit: ₹10,000 in case of a single transaction. |
| 4 | Any income, credited or paid to a person, who is or has been stocking, distributing, purchasing or selling lottery tickets, by way of commission, remuneration or prize (by whatever name called) on such tickets. | Any person. | Rate: 2% Threshold limit: ₹20,000. |
| 5 | Any sum, paid in cash, from one or more accounts maintained by any person (herein referred as recipient). | Any person, being, — (a) a banking company; (b) a co-operative society engaged in carrying on the business of banking; or (c) a post office. | Rate: 2% Threshold limit: (a) three crore rupees in case of recipient being, a cooperative society; or (b) one crore rupees in case of recipient being person other than a cooperative society. |
| 6 | Any amount referred to in section 80CCA(2)(a) of the Income-tax Act, 1961 (43 of 1961). | Any person. | Rate: 10% Threshold limit: ₹2,500. |
| 7 | Any sum in the nature of salary, remuneration, commission, bonus or interest paid to a partner of the firm or credited to his account (including capital account). | Any person, being a firm. | Rate: 10% Threshold limit: ₹20,000. |
Note 1.—For serial number 2, tax shall be deducted— (a) on net winnings in the user account of the payee at the end of the tax year; (b) where there is any withdrawal from user account during the tax year, the tax shall be deducted at the time of such withdrawal on the net winnings comprised in such withdrawal as well as on the remaining amount of net winnings in user account at the end of the tax year, where the net winnings in each case is computed in the such manner as may be prescribed. Note 2.—For serial numbers 1 and 2, where the winnings or net winnings, as the case may be,— (a) is wholly in kind; or (b) is partly in kind and partly in cash, but such part in cash is not sufficient to meet the liability of deduction of tax in respect of the whole of such winnings, then, the person responsible for paying shall ensure that the tax required to be deducted has been paid, before releasing the winnings. Note 3.—For serial number 4, the person responsible for making the payment shall deduct tax at the time of credit of such sum or at the time of payment of such sum in cash or by issue of a cheque or a draft or by any other mode, whichever is earlier.
(4) The deduction of tax at source shall not be made under the provisions referred to in column B of the Table below, in respect of the income or sum along with the conditions, specified in column C:
| Sl. No. | Provisions for tax deduction at source | Condition for no deduction on income or sum |
|---|---|---|
| 1 | Commission or Brokerage referred to in section 393(1) [Table: Sl. No. 1(ii)]. | Commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees. |
| 2 | Rent referred to in section 393(1) [Table: Sl. No. 2(ii)]. | Income by way of rent credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in Schedule V (Table: Sl. No. 4), owned directly by such business trust. |
| 3 | Compensation on acquisition of certain immovable property referred to in section 393(1) [Table: Sl. No. 3(iii)]. | Income by way of any award or agreement which has been exempted from levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013). |
| 4 | Income in respect of units referred to in section 393(1) [Table: Sl. No. 4(i)]. | If income is of the nature of capital gain. |
| 5 | Income from units of a business trust referred to in section 393(1) [Table: Sl. No. 4(ii)]. | Income of the nature referred to in Schedule V [Table: Sl. No. 3.B(b)], if the special purpose vehicle referred to in the said serial number has not exercised the option under section 200. |
| 6 | Interest on securities referred to in section 393(1) [Table: Sl. No. 5(i)]. | (a) Interest payable on— (i) National Development Bonds; (ii) such debentures, issued by such institution or authority or any other person as the Central Government may, by notification, specify in this behalf; (iii) any security of the Central Government or a State Government, other than— (A) 8% Savings (Taxable) Bonds, 2003; or (B) 7.75% Savings (Taxable) Bonds, 2018; or (C) Floating Rate Savings Bonds, 2020 (Taxable); or (D) any other security of the Central Government or State Government as the Central Government may, by notification, specify in this behalf; (b) interest payable to— (i) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), in respect of any securities owned by it or in which it has full beneficial interest; or (ii) the General Insurance Corporation of India or to any of the four companies, formed by virtue of the schemes made under section 16(1) of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), in respect of any securities owned by the Corporation or such company or in which the Corporation or such company has full beneficial interest; or (iii) any other insurer in respect of any securities owned by it or in which it has full beneficial interest; or (iv) a “business trust”, as defined in section 2(21), in respect of any securities, by a special purpose vehicle referred to in Schedule V (Table: Sl. No. 3). |
| 7 | Interest other than interest on securities referred to in section 393(1) [Table: Sl. No. 5(ii) and 5(iii)]. | (a) Interest income credited or paid to— (i) any banking company or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank); or (ii) any financial corporation established by or under a Central Act or State Act or Provincial Act; or (iii) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956); or (iv) the Unit Trust of India; or (v) any company or co-operative society carrying on the business of insurance; or (vi) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notified in this behalf before the 1st April, 2020; (b) interest income credited or paid— (i) by a co-operative society other than a co-operative bank, to a member thereof; or (ii) by a co-operative society to any other co-operative society; or (iii) in respect of deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank; or (iv) in respect of deposits (other than time deposits made on or after the 1st July, 1995) with a co-operative society, other than a co-operative society or bank referred to in sub-clause (iii), engaged in the business of banking, except when,— (A) where the total sales, gross receipts or turnover of the co-operative society exceed fifty crore rupees during the tax year immediately preceding the tax year in which such interest is credited or paid; and (B) the amount or aggregate of amounts of interest credited or paid exceeds the threshold limit mentioned in section 393(1) (Table: Sl. No. 5(ii)D); (c) interest income credited or paid— (i) by the Central Government under any provision of this Act or the Income-tax Act, 1961 (43 of 1961), or the Estate Duty Act, 1953 (34 of 1953), or the Wealth-tax Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), the Companies (Profits) Surtax Act, 1964 (7 of 1964), or the Interest-tax Act, 1974 (45 of 1974); (ii) in respect of deposits under any scheme framed by the Central Government and notified by it in this behalf; (iii) in respect of deposits (other than time deposits made on or after the 1st July, 1995) with a banking company; (iv) on the compensation amount awarded by a Motor Accidents Claims Tribunal— (A) to an individual; or (B) to a person other than an individual, where the aggregate interest on such compensation does not exceed ₹50,000 during the tax year; (v) or payable by an infrastructure capital company; or infrastructure capital fund; or infrastructure debt fund; or a public sector company; or scheduled bank in relation to a zero coupon bond issued on or after the 1st June, 2005 by such company or fund or public sector company or scheduled bank; (vi) as referred to in Schedule V (Table: Sl. No. 3); (vii) by a firm to a partner of the firm. |
| 8 | Payments to contractors referred to in section 393(1) [Table: Sl. No. 6(i)]. | (a) Where— (i) any sum credited or paid or likely to be credited or paid during the tax year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages; and (ii) that contractor owns ten or less goods carriages at any time during the tax year; and (iii) furnishes a declaration to that effect along with his Permanent Account Number to the person paying or crediting the sum; and (iv) the person responsible for paying to the contractor furnishes to the prescribed income-tax authority the particulars in such form and within such time as may be prescribed; (b) where such sum is credited or paid by individual or Hindu undivided family exclusively for personal purposes of such individual or any member of Hindu undivided family. |
| 9 | Fees for professional or technical services referred to in section 393(1) [Table: Sl. No. 6(iii)]. | Where such sum is credited or paid by individual or Hindu undivided family exclusively for personal purposes of such individual or any member of Hindu undivided family. |
| 10 | Dividend referred to in section 393(1) (Table: Sl. No. 7). | Dividend income credited or paid to— (a) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), in respect of any shares owned by it or in which it has full beneficial interest; (b) the General Insurance Corporation of India or to any of the four companies, formed by virtue of the schemes made under section 16(1) of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), in respect of any shares owned by the Corporation or such company or in which the Corporation or such company has full beneficial interest; (c) any other insurer in respect of any shares owned by it or in which it has full beneficial interest; (d) a “business trust”, as defined in section 2(21), by a special purpose vehicle referred to in Schedule V (Note 2); (e) any other person as may be notified by the Central Government in this behalf; (f) a shareholder, being an individual, if— (I) the dividend is paid by the company by any mode other than cash; and (II) amount or aggregate of amounts of such dividend distributed or paid or likely to be distributed or paid during the tax year does not exceed ₹10,000. |
| 11 | Payment by e-commerce operator to e-commerce participant referred to in section 393(1) [Table: Sl. No. 8(v)]. | Where the amount is credited or paid or likely to be credited or paid during the tax year to the account of an e-commerce participant, which is— (a) an individual or a Hindu undivided family; and (b) the gross amount of the sales or services or both during the tax year does not exceed ₹5,00,000; and (c) the e-commerce participant has furnished the Permanent Account Number or Aadhaar number to the e-commerce operator. |
| 12 | Payment on transfer of virtual digital asset referred to in section 393(1) [Table: Sl. No. 8(vi)]. | Where value or aggregate value of such consideration during the tax year does not exceed— (a) ₹50000, when payable by an individual or a Hindu undivided family,— (i) whose total sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not exceed one crore rupees in case of business or fifty lakh rupees in case of profession, during the tax year immediately preceding the tax year in which such virtual digital asset is transferred; (ii) not having any income under the head “Profits and gains of business or profession”; (b) ₹10000, when payable by any person other than the person referred to in clause (a). |
| 13 | Income from units of a business trust referred to in section 393(2) (Table: Sl. No. 6). | Income of the nature referred to in Schedule V [Table: Sl. No. 3.B(b)], if the special purpose vehicle referred to in the said clause has not exercised the option under section 200. |
| 14 | Income in respect of units of investment fund referred to in section 393(2) (Table: Sl. No. 8). | Income that is not chargeable to tax under the provisions of this Act. |
| 15 | Income in respect of units of non-residents referred to in section 393(2) (Table: Sl. No. 10). | Income payable in respect of units of the Unit Trust of India to a non-resident Indian or a non-resident Hindu undivided family, subject to prescribed conditions. |
| 16 | Income of Foreign Institutional Investors from securities referred to in section 393(2) (Table: Sl. No. 15). | Income, by way of capital gains arising from the transfer of securities referred to in section 210, if payable to a Foreign Institutional Investor. |
| 17 | Income of Specified Fund from securities referred to in section 393(2) (Table: Sl. No. 16). | Income is exempt as per Schedule VI (Table: Sl. Nos. 1 to 4). |
| 18 | Payment of certain amounts in cash referred to in section 393(3) (Table: Sl. No. 5). | Payment made to— (a) the Government; (b) any banking company or co-operative society engaged in carrying on the business of banking or a post office; (c) any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, as per the guidelines issued in this regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934); (d) any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, as per the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007). |
| 19 | Payment in respect of deposits under National Savings Scheme, etc., referred to in section 393(3) (Table: Sl. No. 6). | Payment made to heirs of an assessee. |
(5) Irrespective of anything contained in this Chapter, the tax shall not be deducted by any person from any amount payable to— (a) the Government; or (b) the Reserve Bank of India; or (c) a corporation established by or under a Central Act which is, under any law in force, exempt from income-tax on its income; or (d) a Mutual fund as specified at Schedule VII (Table: Sl. No. 20 or 21), where such amount is payable to it by way of— (A) interest; or (B) dividend in respect of any securities or shares owned by it or in which it has full beneficial interest; or (C) any other income accruing or arising to it.
(6) The deduction of tax shall not be made under provisions referred to in column C of the Table below, in the case of a person as specified in column B, if such person furnishes to the person responsible for paying any income or sum of the nature referred to in such provisions, a written declaration in duplicate in such form and manner as may be prescribed that the tax on such person’s estimated total income of the tax year in which such income or sum is to be included in computing his total income shall be nil.
| Sl. No. | Person | Provisions for tax deduction at source |
|---|---|---|
| 1 | An individual being a resident. | (a) payment of accumulated balance due to an employee referred to in section 392(7); (b) insurance Commission referred to in section 393(1) [Table: Sl. No. 1(i)]; (c) rent referred to in section 393(1) [Table: Sl. No. 2(ii)]; (d) income in respect of units referred to in section 393(1) [Table: Sl. No. 4(i)]; (e) interest referred to in section 393(1) [Table: Sl. No. 5(i), (ii) and (iii)]; (f) payment in respect of life insurance policy referred to in section 393(1) [Table: Sl. No. 8(i)]; (g) dividend referred to in section 393(1) (Table: Sl. No. 7). |
| 2 | Any person not being a company or a firm or an individual covered in Sl. No. (1). | Sl. No. (1).C(a) to (f). |
Note.—The provisions of this sub-section shall not apply in case of a person referred to in column B of the Table, other than an individual being a resident who is of the age of sixty years or more at any time during the tax year, if the aggregate of amounts of any income or sum of the nature referred to in provision mentioned in column C of this Table, is credited or paid or likely to be credited or paid during the relevant tax year in which such income or sum is to be included, exceeds the maximum amount not chargeable to tax.
(7) The person responsible for paying any income or sum of the nature referred to in sub-section (6) shall deliver or cause to be delivered, such declaration referred therein, received from the person, as specified in column B of the Table in sub-section (6) or the depository, to the prescribed income-tax authority, on or before the seventh day of the month immediately following the end of each quarter in which declaration is furnished to him as per sub-section (6).
(8) Irrespective of anything contained in sub-section (6), the deduction of tax shall not be made from the interest paid by an Offshore Banking Unit on borrowing from or deposit made on or after 1st April, 2005, by a non-resident or a person not ordinarily resident in India.
(9) Irrespective of anything contained in this Chapter, the deduction of tax shall not be made from any payment to a person for, or on behalf of, the New Pension System Trust referred to in Schedule VII (Table: Sl. No. 41).
(10) In a case other than that referred to in section 392(2)(a), where under an agreement or an arrangement, if the tax chargeable on any income of the recipient referred to in this Chapter is to be borne by the payer, then, for the purposes of deduction of tax, the income shall be increased to an amount which after deduction of tax as per provisions of this Chapter becomes equal to the net amount payable under such agreement or arrangement.
(11) The credit of any income or sum to any account, whether called “suspense account” or by any other name, in the books of account of the person liable to pay such income or sum, shall be deemed to be the credit of such income or sum to the account of the payee and the provisions of this Chapter shall apply accordingly.
Introduction
Section 393 is the principal TDS table for non-salary payments. It separates payments to residents, payments to non-residents and other specified payments; each row can set its own payer, payee, event, threshold, rate and conditions.
A correct result requires identifying the exact table row and then reading the accompanying notes and exceptions. A rate or threshold from one row cannot safely be carried into another payment category.
Key takeaways
Payment-specific TDS
The tables specify different persons, payment categories, rates and thresholds; the relevant row must be identified before applying a rate.
Timing and exceptions
The main section and table notes govern when deduction occurs and when a listed payment is outside a deduction duty.
Non-resident payments
The section contains distinct provisions for payments to non-residents, so a domestic-payment row cannot be assumed to apply.
How Section 393 works
Select the correct subsection before computing TDS. Resident payments under subsection (1) and non-resident payments under subsection (2) generally use the earlier of credit or payment, subject to their notes. Subsection (3) uses payment or the event specified in the row or note. The goods-purchase rule deducts on the amount exceeding ₹50 lakh; property row 3(i) is triggered when consideration or stamp duty value is equal to or above ₹50 lakh. Other thresholds, deduction bases and exceptions must be read in their own rows.
Table for payments to residents - Section 393(1)
Key rates and thresholds from the resident-payments table (thresholds are per year unless stated otherwise):
| Nature of income or sum | Rate | Threshold |
|---|---|---|
| Insurance commission (soliciting/procuring insurance business) | Rates in force | ₹20,000 |
| Other commission or brokerage (not insurance), paid by a "specified person" | 2% | ₹20,000 |
| Rent, paid by a person other than a specified person | 2% | ₹50,000 for a month or part of a month |
| Rent for machinery/plant/equipment, paid by a specified person | 2% | ₹50,000 for a month or part of a month |
| Rent for land/building/furniture/fittings, paid by a specified person | 10% | ₹50,000 for a month or part of a month |
| Transfer of immovable property (not agricultural land) - on consideration or stamp duty value, whichever is higher | 1% | ₹50,00,000 |
| Consideration (not in kind) under a joint development agreement (Section 67(14)) | 10% | Nil |
| Compensation/enhanced compensation on compulsory acquisition of immovable property (not agricultural land) | 10% | ₹5,00,000 |
| Income from units of specified mutual funds / UTI Administrator / specified company | 10% | ₹10,000 |
| Business trust distributed income of the nature in Schedule V Sl. Nos. 3 and 4 | 10% | Nil |
| Investment fund income (non-exempt portion) to a unitholder | 10% | Nil |
| Securitisation trust income to an investor | 10% | Nil |
| Interest on securities | Rates in force | ₹10,000 |
| Interest (other than on securities) from a bank, co-operative bank or post office | Rates in force | ₹1,00,000 for a senior citizen; ₹50,000 for others |
| Interest (other than on securities) from any other specified person | Rates in force | ₹10,000 |
| Payments to contractors by a "designated person" (individual/HUF contractor) | 1% | ₹30,000 (single sum) / ₹1,00,000 (aggregate) |
| Payments to contractors by a designated person (other contractors) | 2% | ₹30,000 (single sum) / ₹1,00,000 (aggregate) |
| Contract work / professional fees / commission or brokerage, paid by an individual/HUF not otherwise covered | 2% | ₹50,00,000 |
| Fees for technical services other than professional services; royalty for sale, distribution or exhibition of cinematographic films; or a payee engaged only in operating a call centre, under row 6(iii)(a) | 2% | ₹50,000 for columns B(a), (b), (d) and (e); no threshold for director payments in B(c) |
| Other payments within row 6(iii), including ordinary professional fees, general royalty, section 26(2)(h) sums and non-salary director remuneration, unless the 2% limb applies | 10% | ₹50,000 for columns B(a), (b), (d) and (e); no threshold for director payments in B(c) |
| Dividend (including on preference shares), declared by a domestic company | 10% | Nil |
| Sum under a life insurance policy including bonus (on the income component, excluding amounts exempt under Schedule II Sl. No. 2) | 2% | ₹1,00,000 |
| Purchase of goods by a buyer | 0.1% | ₹50,00,000 |
| Total income of a "specified senior citizen" (75+, pension + interest only), paid by a specified bank | Rates in force | As applicable |
| Benefit or perquisite from business or profession, to a resident | 10% of the value | ₹20,000 |
| Sale of goods/services by an e-commerce participant via an e-commerce operator | 0.1% of gross sale/service amount | Nil |
| Consideration for transfer of a virtual digital asset | 1% | Nil |
Table for payments to non-residents - Section 393(2)
Selected non-resident rates are summarised below. The full table specifies the payee and payer as well as the income. Note 2 expressly addresses the treaty-rate comparison for rows 10 and 15 with the section 159(8) certificate; other treaty claims require their own applicable analysis.
| Nature of income | Rate |
|---|---|
| Income of a non-resident sportsman/entertainer or non-resident sports association (Section 211) | 20% |
| Interest on foreign-currency borrowing from outside India under an approved loan agreement or long-term infrastructure bond on or after 1 July 2012 but before 1 July 2023, or an approved issue of any long-term bond on or after 1 October 2014 but before 1 July 2023 | 5% |
| Interest on rupee denominated bonds issued before 1 July 2023 | 5% |
| Interest on long-term bonds / rupee denominated bonds listed only on a recognised stock exchange in an IFSC | 4% where issued on or after 1 April 2020 but before 1 July 2023; 9% where issued on or after 1 July 2023 |
| Interest from an infrastructure debt fund (Schedule VII Sl. No. 46) | 5% |
| Business trust distributed income - Schedule V Sl. No. 3 | 5% for income under Sl. No. 3.B(a); 10% for income under Sl. No. 3.B(b) |
| Business trust distributed income - Schedule V Sl. No. 4 | Rates in force |
| Investment fund income (non-exempt portion) | Rates in force |
| Securitisation trust investment income | Rates in force |
| Income from units of a specified mutual fund / specified company | 20%, or the lower DTAA rate if a valid tax residency certificate is furnished (Note 2) |
| Income from units of an offshore fund (Section 208) | 10% |
| Long-term capital gains on transfer of offshore fund units (Section 208) | 12.5% |
| Interest or dividends on bonds/GDRs (Section 209) | 10% |
| Long-term capital gains on transfer of bonds/GDRs (Section 209) | 12.5% |
| Income from securities to a Foreign Institutional Investor (Section 210(1)) | 20%, or the lower DTAA rate if a valid tax residency certificate is furnished (Note 2) |
| Income from securities to a specified fund (Schedule VI Note 1(g)) | 10% |
| Any other interest, or any other sum chargeable under the Act (not being salary), paid to a non-resident | Rates in force |
Table for payments to any person - Section 393(3)
| Nature of income or sum | Rate | Threshold |
|---|---|---|
| Winnings from lottery, crossword puzzle, card game or other game, gambling or betting (other than online games) | Rates in force | ₹10,000 per single transaction |
| Winnings from an online game | Rates in force | As per Note 1 - computed on net winnings |
| Winnings from a horse race, paid by a bookmaker or licensed race-course operator | Rates in force | ₹10,000 per single transaction |
| Commission, remuneration or prize on lottery tickets to stockists/distributors/sellers | 2% | ₹20,000 |
| Cash withdrawal from one or more accounts with a bank, co-operative society engaged in banking, or post office | 2% | ₹3 crore where the recipient is a co-operative society; ₹1 crore for other recipients |
| Amount referred to in Section 80CCA(2)(a) of the Income-tax Act, 1961 (National Savings Scheme withdrawal) | 10% | ₹2,500 |
| Salary, remuneration, commission, bonus or interest paid by a firm to its partner | 10% | ₹20,000 |
When no TDS is required
Subsection (4) provides row-specific exclusions. These include rent paid to a REIT business trust for real estate owned directly by that trust; specified acquisition compensation exempt under the 2013 land-acquisition Act; capital-gains income from specified units; and the listed securities-interest and other-interest exceptions. The current Motor Accidents Claims Tribunal interest exclusion covers an individual without the ₹50,000 limit; for another person, the aggregate-interest condition remains ₹50,000. Read the full nineteen-row table for the recipient, instrument, turnover and other conditions.
Section 393(5) says tax is never deducted from amounts payable to the Government, the Reserve Bank of India, a Central-Act corporation exempt from income-tax, or a specified mutual fund (for interest, dividend or other income it beneficially owns).
Other examples include qualifying small goods-carriage contractors with the required declaration, PAN and reporting; personal-purpose contractor/professional payments by an individual or HUF; the listed dividend recipients; non-cash dividends to an individual up to ₹10,000; qualifying individual/HUF e-commerce participants up to ₹5 lakh with PAN/Aadhaar; and the specified ₹50,000/₹10,000 virtual-asset cases. Dividend paid by an SPV to a business trust is distinct from a payment to the SPV itself.
Self-declaration for nil deduction
Section 393(6) lets a resident individual (and, for a narrower list of payments, other non-company, non-firm persons) furnish a written declaration - in duplicate, in prescribed form - that tax on the estimated total income for the year will be nil, covering payments such as accumulated PF balance, insurance commission, rent, unit income, interest, life insurance policy payouts and dividend. This mechanism (commonly known from Forms 15G/15H) does not apply to non-senior-citizen declarants once the relevant income exceeds the basic exemption limit.
A separate electronic-depository declaration route has been enacted with effect from 1 April 2027. It is not yet operative as at this page’s 10 October 2026 review date. The current bare-law text below therefore retains subsection (6) without the future (a)/(b) renumbering and insertion.
The current subsection (7), substituted from 1 April 2026, requires delivery of the declaration to the prescribed income-tax authority on or before the seventh day of the month immediately following the end of the quarter in which it was furnished. The old monthly forwarding text is superseded.
Other exemptions and special rules
Section 393(8): no deduction from interest paid by an Offshore Banking Unit on borrowings or deposits made on or after 1 April 2005 by a non-resident or a not-ordinarily-resident person.
Section 393(9): no deduction from any payment to, or on behalf of, the New Pension System Trust (Schedule VII Sl. No. 41).
Section 393(10): where an agreement or other arrangement makes tax on the recipient’s income payable by the payer, the income is grossed up so that, after deduction under this Chapter, the balance equals the net amount payable under that agreement or arrangement. The subsection expressly excepts the cases referred to in section 392(2)(a).
Section 393(11): a credit to any "suspense account" or similarly named account in the payer's books is deemed to be a credit to the payee's account, triggering the TDS obligation just as an actual credit or payment would.
Step-by-step flow for applying Section 393
- 1
Is the payee a resident, a non-resident, or does the payment fall in the 'any person' Table?
- Resident: Use the Table in Section 393(1).
- Non-resident: Use the Table in Section 393(2).
- Any person: Use the Table in Section 393(3).
- 2
Find the serial number matching the nature of the payment and the payer in columns B and C
- 3
Does the amount (or aggregate) exceed the threshold in column D?
- No: No TDS under that serial number.
- Yes: Deduct on the entire amount, not only the excess.
- 4
Does any exemption, self-declaration or lower deduction certificate apply?
Check the no-TDS cases and self-declaration provisions in the section, and any certificate under Section 395.
- 5
Deduct at the column D rate, at the earlier of credit or payment
Without a valid PAN from the payee, the higher rate rules in Section 397(2) apply. Then deposit, file statements and issue certificates.
Practical checklist
Do
- Classify the payment and the payee’s residence before selecting a subsection and table row.
- Read that row’s payer category, threshold, rate, timing rule and notes together; verify whether an exception or certificate applies.
- Check whether the same arrangement includes multiple payment components governed by different rows.
- Document the basis for deduction or non-deduction and reconcile the amount with section 397 reporting and section 395 certificate duties.
Avoid
- Do not use a resident-payment row for a non-resident payment.
- Do not assume a threshold or self-declaration applies beyond the precise row and conditions that provide it.
Illustrative example
Worked example: paying a resident contractor
Hypothetical facts (illustration only, not a real taxpayer): A company pays a resident contractor for repair work through the year. The payments together exceed the threshold for contract payments in the Section 393(1) Table. The contractor has furnished a valid PAN and holds no lower deduction certificate.
Table
The payee is resident, so the Section 393(1) Table applies; the contract-work serial number matches the payment.
Threshold
Once the aggregate exceeds the column D threshold, TDS applies to the entire amount, including earlier payments in the year.
Timing and rate
Tax is deducted at the column D rate at the time of credit or payment, whichever is earlier.
Outcome
- The company deposits the TDS, reports it in its statement and issues a certificate under Section 395(4).
- If it misses the deduction, Section 35(b) (30% disallowance) and Section 398 (assessee in default and interest) consequences follow.
Glossary
- Deductor
- The person responsible for deducting tax from a covered payment under the applicable table row.
- Threshold
- The amount or aggregate amount stated for a particular table row that triggers or limits its deduction rule.
Frequently asked questions
What is the TDS rate on rent paid by a person other than a specified person?
2%, with a threshold of ₹50,000 for a month or part of a month, under Section 393(1) [Table Sl. No. 2(i)].
What is the TDS rate on purchase of goods above ₹50 lakh?
0.1%, applied on the sum exceeding ₹50,00,000, under Section 393(1) [Table Sl. No. 8(ii)] read with Note 1 to that table.
What is the TDS rate on dividend under the Income-tax Act, 2025?
The main resident dividend row specifies 10% before distribution or payment, with a nil threshold in that row. But subsection (4), Table row 10, contains specific exclusions, including qualifying non-cash dividends to an individual where the annual amount does not exceed ₹10,000. Check those conditions before concluding that every dividend requires deduction.
What is the TDS rate on transfer of a virtual digital asset (crypto)?
1%, with no minimum threshold under the main rate table, under Section 393(1) [Table Sl. No. 8(vi)] - though Section 393(4) [Table Sl. No. 12] provides narrower no-deduction thresholds (₹50,000 or ₹10,000 depending on the payer) in specified cases.
Need help applying this provision to your situation?
Get help applying the correct TDS rate and filing your TDS returnLast updated 10 October 2026