TDS Section Crosswalk: Old 194 Sections to Sections 392, 393 and 394 of the Income-tax Act, 2025

Quick answer

For any payment credited or paid on or after 1 April 2026, TDS is governed by the Income-tax Act, 2025: salary by section 392, other specified payments by section 393, and tax collection at source by section 394. Rates and thresholds were carried across unchanged from the 1961 Act. What changed is the citation — quote the section 393 table item, not the old 194 number.

Who this page is for

Anyone who has to put a section number on a deduction: an accounts-payable clerk choosing a code in the ERP, a finance controller signing off a quarterly statement, a founder checking whether their bookkeeper has caught up. It is written as a lookup table you come back to, not as an explainer you read once.

If you want the wider picture first — what the new Act is, and why the assessment year and the tax year are not the same thing — start with our guide to the Income-tax Act, 2025 for business owners and come back here for the numbers.

The one rule that decides which Act applies

There is only one test, and it is the same test that has always decided when TDS falls due. Section 393(1)(c) of the Income-tax Act, 2025 requires deduction:

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

So the question is never "when was the invoice dated" or "when did we approve it". It is: which came first, the credit or the payment, and did that event fall on or after 1 April 2026?

The Income Tax Department puts it in exactly these terms in its deductor guidance: if the earlier of credit or payment happens on or before 31 March 2026 the 1961 Act applies, and if it happens on or after 1 April 2026 the Income-tax Act, 2025 applies. Section 394(1)(c) applies the mirror-image test to collections — the earlier of debiting the buyer's account or receiving the amount.

Two practical consequences follow, and they trip people up in opposite directions:

• A March 2026 provision entry that credits a vendor's account is an old-Act deduction, even if the payment clears in May.
• An advance paid in April 2026 against a contract signed in 2024 is a new-Act deduction, because payment came first and it came after the cut-off.

How the new Act is organised

A common shorthand says the 2025 Act "consolidated TDS into section 393". That is not quite right, and the imprecision costs you if you are trying to find a provision.

Salary sits outside section 393 entirely, and so does TCS. If your internal note says "everything is 393 now", the payroll team and the scrap-sales team will both go looking in the wrong place.

Within section 393 the tables are addressed by serial number, so a full citation looks like section 393(1), Table serial number 6(i) — sub-section, table, serial number, sub-item. The Department's own worked example uses that form.

Why the old labels survive but no longer govern

"194C" is not wrong the way a misspelling is wrong. It is out of date for a current deduction, and precisely correct for an old one.

The labels survive for three honest reasons. They are how the profession talks. They are how every contract, purchase order and vendor-onboarding form drafted before 2026 describes the deduction. And they are still the operative citation for every deduction made up to 31 March 2026, which will remain assessable, correctable and litigable for years.

What they no longer do is govern. For a deduction on or after 1 April 2026 the operative provision is the section 393 table item, and the Department warns that quoting the old number instead may produce processing errors when the statement is filed.

The practical house style, and the one the Department itself uses, is to lead with the new citation and keep the old label as an alias: commission or brokerage — section 393(1), Table serial number 1(ii), formerly section 194H. Nobody has to relearn their vocabulary, and the compliance record still carries the right citation. Our own TDS calculator labels its sections that way for the same reason.

The crosswalk

Every row below was read from the Income-tax Act, 2025 as published in the Gazette of India on 21 August 2025, and from the Finance Act, 2026 where that Act amended it. This is our derivation from the bare Act, not an official concordance — the Department has not published a complete mapping table, and any page presenting one as official is overstating it. Each row is cited so you can check it yourself.

Salary — section 392

There is no threshold table for salary. The obligation is to estimate the year's salary income and deduct the average rate across the year, exactly as before. If your payroll runs monthly, the change is a label change. Our TDS on salary page walks through the estimate.

Payments to a resident — section 393(1)

The main table. Rate and threshold are as they stand for tax year 2026-27.

Payments to any person — section 393(3)

Section 393(3), serial number 7 is the provision most likely to catch a firm out, because it is recent in substance as well as in numbering. A firm paying its partners remuneration or interest deducts 10% once the aggregate for the tax year passes ₹20,000, including amounts merely credited to a partner's capital account. Firms filing at partnership firm ITR or LLP ITR should check their partner ledgers before the first quarterly statement.

Payments to a non-resident — section 393(2)

Seventeen serial numbers, and they interact with treaty rates under section 159, so they are not reducible to a single table you can apply without advice. The one item to know by heart is the residual: section 393(2), Table serial number 17, the old section 195, covering interest and

any other sum chargeable under the provisions of this Act, not being income chargeable under the head "Salaries"

paid to any non-resident or foreign company, at rates in force. It is the provision behind most remittance certificates, and it is the reason Form 15CA and 15CB support exists as a service at all.

Tax collection at source — section 394

Read this table even if you read nothing else, because this is where the numbers actually moved. The Finance Act, 2026 amended six of the nine rows, with effect from 1 April 2026.

Two notes worth carrying into your masters. A scrap seller who has been collecting 1% for years is now collecting 2%, and nothing about the change announces itself in the section number. And the old section 206C(1H) collection on sale of goods above ₹50 lakh has no successor anywhere in section 394 — it was dropped before the new Act took effect and did not come across.

Reverse lookup — new provision to old label

If you are working from a certificate, a credit statement or a colleague's note that quotes only the new citation, read this the other way.

Machinery sections

What has NOT changed — say this out loud to your team

This is the most reassuring fact available, and it is worth stating plainly because most of the anxiety around the new Act comes from assuming otherwise.

TDS rates and monetary thresholds were retained. The Income Tax Department states it directly: the rates and thresholds for all categories of payments have been retained as they were under the 1961 Act, and the consolidation under section 393 is a tabular presentation, not a change in rates or tax policy. You do not have to take that on trust either — every rate and threshold in the tables above was read off the section 393 tables in the gazette, so any row can be checked against the Act itself.

Also unchanged:

• The trigger. Earlier of credit or payment, under section 393(1)(c) — the same test the profession has always applied.
• The interest for default. 1% a month or part month from the date tax was deductible to the date it was deducted, and 1.5% a month or part month from deduction to actual payment, under section 398(3)(a).
• The late-statement fee. ₹200 a day, capped at the tax deductible or collectible, under section 427.
• Surcharge is not added to a resident TDS rate. The surcharge table in Part II of the First Schedule to the Finance Act, 2026 applies only where the payee is a non-resident.
• Who is a "specified person". Section 402(37): any person other than an individual or HUF, or an individual or HUF whose sales, gross receipts or turnover exceeded ₹1 crore for a business or ₹50 lakh for a profession in the immediately preceding tax year.

The trap nobody warns you about: thresholds outside the rate table

Under the 1961 Act, most exemptions lived as provisos attached to the section they qualified. The 2025 Act pulled them out into a separate table — section 393(4), "For no deduction at source". The rate table and the exemption table are read together.

If you build a payables rule from the section 393(1) rate table alone, you will over-deduct, because three common items show a nil threshold there and carry their real carve-out in section 393(4).

Section 393(4) also carries narrower carve-outs worth knowing: commission paid by BSNL or MTNL to public call office franchisees, and compensation exempt under section 96 of the land acquisition Act of 2013.

Worked examples

Assumptions stated in each case: the payee is resident, has furnished a valid PAN, holds no lower-deduction certificate under section 395, and the payer is a company and therefore a specified person and a designated person.

1. A housekeeping contract that straddles the cut-off

A company has a monthly housekeeping contract with a services firm at ₹40,000 a month. March 2026 charges are credited to the vendor's account on 31 March 2026; April charges are credited on 30 April 2026.

• March. The earlier event is credit, on 31 March 2026. Old Act. Deduct under section 194C at 2%, being ₹800, and report it on the old-Act statement for the quarter ended 31 March 2026.
• April. Credit on 30 April 2026. New Act. Deduct under section 393(1), Table serial number 6(i) at 2%, being ₹800, and quote the new citation.

Same money, same rate, two different statutes and two different citations. The Department's guidance uses this exact fact pattern.

2. Commission at the threshold

A company pays a resident agent ₹1,00,000 of commission in June 2026, the first payment of the year.

The aggregate crosses the ₹20,000 threshold, so tax is deducted on the entire amount, not on the excess. At 2% under section 393(1), Table serial number 1(ii), that is ₹2,000. Net payment ₹98,000.

Had the year's commission stopped at ₹19,000, no deduction would arise at all. The threshold is a cliff, not an allowance, and the moment the aggregate crosses it the whole amount comes into charge.

3. Purchase of goods, where the base is not the whole amount

A buyer with turnover above ₹10 crore in the preceding tax year buys ₹60,00,000 of goods from a resident supplier during tax year 2026-27.

Under section 393(1), Table serial number 8(ii) the rate is 0.1%, and Note 1(b) applies it only to the sum exceeding ₹50 lakh. Tax is 0.1% of ₹10,00,000, which is ₹1,000 — not 0.1% of ₹60,00,000.

Now suppose the supplier has not furnished a PAN. Section 397(2)(b)(i) sets the floor at 5% for this item, not the usual 20%. Tax becomes 5% of ₹10,00,000, which is ₹50,000. A tool that applies a blanket 20% would compute ₹2,00,000 and over-deduct fourfold.

4. Rent, where the threshold is monthly

A company pays ₹45,000 a month for office premises, ₹5,40,000 across the year.

Under section 393(1), Table serial number 2(ii) the threshold is ₹50,000 for a month or part of a month. At ₹45,000 a month no single month crosses it, so no deduction arises, even though ₹5,40,000 has gone out over the year. Raise the rent to ₹52,000 and deduction begins, at 10% for building rent. Reading that threshold as an annual figure is one of the easiest ways to get this wrong in either direction.

5. A small dividend to an individual shareholder

A private limited company declares ₹9,000 of dividend to an individual shareholder and pays it by bank transfer.

The rate table shows a nil threshold, which reads as "deduct from the first rupee". It is not the whole rule. Section 393(4), serial number 10(f) provides for no deduction where the shareholder is an individual, payment is by a mode other than cash, and the amount for the tax year does not exceed ₹10,000. No deduction. Pay ₹9,000.

Declare a further ₹4,000 later in the same tax year and the aggregate passes ₹10,000, at which point deduction at 10% applies under serial number 7.

What this means for your TDS returns

The statement obligation is in section 397(3)(b): after paying the tax to the credit of the Central Government, deliver a statement in the prescribed form, within the prescribed time. Forms and dates are set by the rules rather than by the Act, so check the current form on the e-filing portal rather than relying on any article, including this one.

Four things do change in practice.

1. Quote the new citation for new-Act deductions. The Department's warning is explicit: citing the old section number rather than the section 393 table item may lead to processing errors at the time of filing.
2. Old periods stay on the old framework. Revised and correction statements for periods governed by the 1961 Act continue to be filed under the old framework. You are not expected to restate a 2025-26 quarter into new section numbers.
3. The correction window is two years. Section 397(3)(f) allows a correction statement within two years from the end of the tax year in which the statement was due — and it expressly extends to statements filed under section 200 of the 1961 Act, so old-Act statements are correctable on the same footing.
4. Challan-cum-statement filings follow the same date rule. For a transaction where credit or payment fell on or after 1 April 2026, the challan-cum-statement is filed under the new Act.

For the quarter-by-quarter mechanics, our guide to filing TDS returns covers the operational side; if you would rather not run it in-house, we file them for you.

Transition-period contracts: work done before, paid after

The date the work was performed is irrelevant. Only credit and payment matter.

• Retention money released in July 2026 on a project completed in January 2026 is a new-Act deduction if the retention was never credited to the contractor's account earlier. If it was credited when the invoice was booked, the old Act governs and the release is only a cash movement.
• Year-end provisions made on 31 March 2026 for services received but not invoiced are old-Act deductions, because a provision credited to a payee's account is a credit. Provisions credited to a general "expenses payable" account rather than to an identified payee are a long-standing grey area; do not assume the Act's change alters your existing position on it, and take advice if the amounts are material.
• Advances paid on or after 1 April 2026 are new-Act deductions even under a contract signed years earlier.
• Lower or nil deduction certificates are granted under section 395 of the new Act. A certificate issued under section 197 of the 1961 Act relates to the old regime; section 536(2)(j) preserves things done under the repealed Act so far as they are not inconsistent, but do not treat that as settled for a certificate that spans the cut-off. Confirm the position with the assessing officer before relying on an old certificate for a post-April deduction.

Common mistakes

• Applying 20% for a missing PAN across the board. Section 397(2) sets a 5% floor for purchases of goods and e-commerce payments. For collection at source, the higher rate is capped at 20%.
• Charging TDS on the excess over the threshold. Except for purchases of goods, tax is on the entire amount once the threshold is crossed. Section 393(1)(a) says so in terms.
• Using one 10% rate for everything under section 393(1) Sl. No. 6(iii). Technical services that are not professional services, film royalty and call-centre payees are at 2%. A director's fee has no threshold at all.
• Treating rent's threshold as annual. It is per month or part of a month.
• Forgetting the specified-person test. An individual or HUF below the ₹1 crore or ₹50 lakh turnover test does not deduct under Sl. No. 1(ii), 2(ii) or 6(iii) at all. For contract, professional and commission payments they fall instead under Sl. No. 6(ii) at 2% above ₹50 lakh, and for rent under Sl. No. 2(i) at 2% above ₹50,000 a month.
• Assuming TCS was left alone. Six of the nine rows moved on 1 April 2026.
• Leaving old section codes in vendor masters. The master is what the ERP writes into the statement.

When it goes wrong

The disallowance is usually the expensive one. The Department's own illustration: ₹5 lakh of professional fees paid without deduction in tax year 2026-27 costs ₹1.5 lakh of disallowance under section 35(b) — on top of the tax, the interest and the fee. If your books are close to a tax audit threshold, that disallowance is what the auditor will find.

One dated change to diarise

Section 397(1)(c), as substituted by the Finance Act, 2026, takes effect on 1 October 2026. From that date a resident individual or HUF deducting tax on consideration for the transfer of immovable property bought from a non-resident — section 393(2), Table serial number 17 — no longer needs a TAN, and nor does a person deducting on a virtual digital asset transfer. Before that date the existing TAN requirement stands. If you have a property purchase from an NRI in the pipeline, the date you complete it changes what you have to register for.

What we are not publishing, and why

Several widely circulated pages carry tables of numeric payment codes for the new statements. We could not verify a single one of those codes against the gazette, the Act, or a published Department notification, and the tables in circulation do not agree with one another.

So we have left them out. A code you enter wrongly is not a cosmetic error — it lands in a statement, flows to the deductee's credit statement, and gets corrected at your cost. Take the code from the current utility or the portal's own form guidance at the time you file, and treat any code table you find in an article, this one included, as unverified until the Department publishes it.

For the same reason this page names no form numbers under the new Act. Forms are prescribed by rules, the rules were not part of what we could verify, and a wrong form number is worse than no form number.

Sources and currency

Applies to: Deductions and collections where the earlier of credit or payment falls on or after 1 April 2026 — tax year 2026-27 onward. For an earlier event, the Income-tax Act, 1961 still governs.

Every rate, threshold and citation on this page was read from the Gazette of India text of the Income-tax Act, 2025 and the Finance Act, 2026, and checked against the Income Tax Department's own deductor guidance, on 19 August 2026. The old-to-new mapping is MyFinancialAdvisory's derivation from the bare Act — the Department has not published a complete concordance. Income-tax provisions change at each Finance Act; confirm the current position before relying on a figure for a filing.

• Income-tax Act, 2025 (No. 30 of 2025) — Gazette of India Extraordinary, 21 August 2025 (sections 392 to 402)
• Finance Act, 2026 (No. 4 of 2026) — Gazette of India Extraordinary, 30 March 2026 (s.85 TCS rates, s.87 TAN, First Schedule Part II)
• Income Tax Department, e-filing portal — TDS Compliance