TDS Payment Under New Income Tax Act 2025 – All You

When reading TDS Payment Under New Income Tax Act 2025 – All You, the important part is to keep the core facts intact while presenting the context in a clearer way for readers.

What This Update Means

Readers should treat this as a tax and compliance update, not as personal advice.

Key Reader Takeaways

• The new law restructures TDS provisions into Sections 392, 393, and 394, altering compliance procedures.
• Correct selection of codes and deductee details is crucial to avoid errors…
• MAKING TDS PAYMENT UNDER NEW INCOME TAX ACT 2025 – ALL YOU NEED TO KNOW As you are aware, the Income Tax Act, 2025 will come into effect from 1st April 2026.
• With its implementation, the structure of Tax Deducted at Source (TDS) provisions has undergone a significant reorganisation and has been re-coded into a table-driven format, covering both domestic and cross-border transactions, along with applicable rates and thresholds.

LAMORC DIGITAL Context

The detailed section below preserves the source-backed information so readers can review the full context and important details in one place.

MAKING TDS PAYMENT UNDER NEW INCOME TAX ACT 2025 – ALL YOU NEED TO KNOW

As you are aware, the Income Tax Act, 2025 will come into effect from 1st April 2026. With its implementation, the structure of Tax Deducted at Source (TDS) provisions has undergone a significant reorganisation and has been re-coded into a table-driven format, covering both domestic and cross-border transactions, along with applicable rates and thresholds.

Under the new framework:

While the rates and threshold limits largely remain unchanged, there is a substantial shift in section numbering, classification, and payment codes. These changes directly impact:

In this article, we aim to simplify the process of making TDS payments under the new law, with a specific focus on:

This becomes particularly important for tax professionals as well as business entities, as selecting the correct section and payment code is crucial to avoid defaults, notices, or mismatches in TDS returns.

[Table: Sl. No. 1(I)] 2% in case for Individual 10% in case for Others 20,000 1006 194H Commission or Brokerage – others 393(1)

[Table: Sl. No. 1(ii)] 2% 20,000 1008 194I(a) Rent on machinery etc.- specified person 393(1)

[Table: Sl. No. 2(ii).D(a)] 2% 50,000 per month 1009 194I(b) Rent other than machinery etc.

– specified person 393(1)

[Table: Sl. No. 2(ii).D(b)] 10% 50,000 per month 1011 194IC Payment on any consideration, not being consideration in kind, under the agreement referred to in section 67(14). 393(1)

[Table: Sl. No. 3(ii)] 10% – 1012 194IA Payment of Compensation on Acquisition of Certain Immovable Property 393(1)

[Table: Sl. No. 3(iii)] 10% 5 Lakh 1013 194K Income payable to a resident assessee in respect of Units of a specified Mutual Fund specified under Schedule VII (Table: Sl. No. 20 or 21) or units from the Administrator of the specified undertaking or units from specified company 393(1)

[Table: Sl. No. 4(i)] 10% 10,000 1014 194LBA Certain income in the form of interest from units of a business trust to a resident unit holder 393(1)

[Table: Sl. No. 4(ii)] 10% – 1015 194LBA Certain income in the form of dividend from units of a business trust to a resident unit holder 393(1)

[Table: Sl. No. 4(ii)] 10% – 1017 194LBB 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 unit holder 393(1)

[Table: Sl. No. 4(iii)] 10% – 1018 194LBC Any income, in respect of an investment in a securitisation trust specified in section 221 to an investor. 393(1)

[Table: Sl. No. 4(iv)] 10% – 1019 193 Any income by way of Interest on securities 393(1)

[Table: Sl. No. 5(i)] 10% 10,000 1020 194A Any income by way of interest other than interest on securities, in case of deductee/payee is a senior citizen 393(1)

[Table: Sl. No. 5(ii).D(a)] 10% 1,00,000 1021 194A Any income by way of interest other than interest on securities, in case of deductee/ payee is other than senior citizen 393(1)

[Table: Sl. No. 5(ii).D(b)] 10% 50,000 1022 194A Any income being interest other than interest on securities 393(1)

[Table: Sl. No. 5(iii)] 10% 10,000 1023 194C 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 – if contractor is individual or Hindu undivided family 393(1)

[Table: Sl. No. 6(i).D(a)] 1% in case for Individual 2% in case for Others (a) ₹ 30000

for any such sum; and

in case of aggregate of such sums. 1024 194C 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 – if contractor is a person other than individual or Hindu undivided family 393(1)

[Table: Sl. No. 6(i).D(b)] 1% in case for Individual 2% in case for Others (a) ₹ 30000

for any such sum; and

in case of aggregate of such sums. 1026 194J(a) Any sum by way of–– (a) fees for technical services (not being a professional services); or (b) royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; or (c) payee, engaged only in the business of operation of call centre 393(1)

[Table: Sl. No. 6(iii).D(a)] 2% 50,000 1027 194J(b) Any sum by way of–– (a) fees for professional services; or (b) any sum referred to in section 26(2)(h) 393(1)

[Table: Sl. No. 6(iii).D(b)] 10% 50,000 1028 194J(b) Any sum by way of 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 393(1)

[Table: Sl. No. 6(iii).D(b)] 10% – 1029 194 Any dividends (including on preference shares) declared.

resident unit holder 393(1)

[Table: Sl. No. 7] 10% 10,000

(Individual) 1030 194DA 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] 393(1)

[Table: Sl. No. 8(i)] 2% 1 lakh 1031 194Q Any sum for purchase of any goods 393(1)

[Table: Sl. No. 8(ii)] 0.1% in excess of 50 lakh 1033 194R Any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession of any resident. 393(1)

[Table: Sl. No. 8(iv)] 10% 20,000 1034 194R Benefits or perquisites of business or profession where such benefit is provided in kind or where part in cash is not sufficient to meet tax liability and tax required to be deducted is paid before such benefit is released 393(1)

[Table: Sl. No. 8(iv)] Note 6 10% 20,000 1035 194O 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 393(1)

[Table: Sl. No. 8(v)] 0.1% 5 Lakh (Individual/ HUF) 1037 194S Any sum by way of consideration for transfer of a virtual digital asset by other than Individual or Hindu Undivided Family. 393(1)

[Table: Sl. No. 8(vi)] 1% 10,000 1038 194SP Any sum by way of consideration, whether in cash or in kind or partly in cash and partly in kind, for transfer of a virtual digital asset. 393(1)

[Table: Sl. No. 8(vi)] Note 6 1% 10,000 1058 194B Any income by way of winnings (other than winnings from Sl. No. 2 of the table at section 393(3)) 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 393(3)

[Table: Sl. No. 1] 30% 10000

in case of a single transactions 1059 194B Any income by way of winnings (other than winnings from Sl. No. 2 of the table at section 393(3)) 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 where consideration, is made in kind or cash is not sufficient to meet the tax liability and tax has been paid before such winnings are released 393(3)

[Table: Sl. No. 1] Note 2 30% 10000

in case of a single transactions 1060 194BA Any income by way of winnings from online game. 393(3)

[Table: Sl. No. 2] 30% – 1061 194BA Any income by way of winnings from online games, is made in kind or cash is not sufficient to meet the tax liability and tax has been paid before such winnings are released 393(3)

[Table: Sl. No. 2] Note 2 30% 10000

in case of a single transactions 1062 194BB Any income by way of winnings from any horse race. 393(3)

[Table: Sl. No. 3] 30% 10000

in case of a single transactions 1063 194G 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 393(3)

[Table: Sl. No. 4] 2% 20,000 1064 194N Payment of certain amounts in cash by bank/ post office / co-operative society to a deductee being a co-operative society 393(3)

[Table: Sl. No. 5.D(a)] 2% 3 Crore 1065 194N Payment of certain amounts in cash by bank/ post office / co-operative society to a deductee being a person other than co-operative society 393(3)

[Table: Sl. No. 5.D(b)] 2% 1 Crore 1066 194EE Any amount referred to in section 80CCA(2)(a) of the Income-tax Act, 1961 (43 of 1961). 393(3)

[Table: Sl. No. 6] 10% 2500 1067 194T 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). 393(3)

[Table: Sl. No. 7] 10% 20,000 –

[Table: Sl. No.1] 20% 1040 194LC Any income by way of interest payable in respect of monies borrowed in foreign currency from a source outside India,—

(a) under a loan agreement or issue of long term infrastructure bond on or after the 1st July, 2012 but before the 1st July, 2023; or

(b) by way of issue of any long-term bond on or after the 1st October, 2014 but before the 1st July, 2023, which is approved by the Central Govt. in this behalf. 393(2)

[Table: Sl. No. 2] 5% 1041 194LD Any income by way of interest payable in respect of monies borrowed from a source outside India by way of issue of rupee denominated bond before the 1st July, 2023. 393(2)

[Table: Sl. No. 3] 5% 1042 194LC Any income by way of interest payable in respect of monies borrowed from a source outside India by way of issue of any long-term bond or rupee denominated bond, which is listed only on a recognised stock exchange located in any International Financial Services Centre. – Issued on or after the 1st April, 2020 but before the 1st July, 2023 393(2)

[Table: Sl. No. 4.E(a)] 4% 1043 194LC Any income by way of interest payable in respect of monies borrowed from a source outside India by way of issue of any long-term bond or rupee denominated bond, which is listed only on a recognised stock exchange located in any International Financial Services Centre – Issued on or after the 1st July, 2023. 393(2)

[Table: Sl. No. 4.E(b)] 9% 1044 194LB Income by way of Interest from Infrastructure debt fund payable to a Non-Resident 393(2)

[Table: Sl. No. 5] 5% 1045 194LBA(a) Any distributed income referred to in section 223, being of the nature referred to in Schedule V [Table: Sl. No. 3.B(a)] 393(2)

[Table: Sl. No. 6.E(a)] 5% 1046 194LBA(b) Any distributed income referred to in section 223, being of the nature referred to in Schedule V [Table: Sl. No. 3.B(b)] 393(2)

[Table: Sl. No. 6.E(b)] 10% 1047 194LBC Any distributed income referred to in section 223, being of the nature referred to in Schedule V [Table: Sl. No. 4]. 393(2)

[Table: Sl. No. 7] 35% – For

Non Residents Company

Non Residents other than companies 1048 194LBB 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. 393(2)

[Table: Sl. No. 8] 10% – For

Non Residents Company

Non Residents other than companies 1049 194LBC Any income in respect of an investment in a securitisation trust specified in section 221. 393(2)

[Table: Sl. No. 9] 10% – For

Non Residents Company

Non Residents other than companies 1050 195 Any income –

(a) in respect of units of a Mutual Fund specified under Schedule VII [Table: Sl. No. 20] or [Table: Sl. No. 21]; or

(b) from the specified company. 393(2)

[Table: Sl. No. 10] 20% or rate provided in the agreement, whichever is lower 1051 196B Any income in respect of units referred to in section 208. 393(2)

[Table: Sl. No. 11] 10% 1052 196B Any income by way of long-term capital gains arising from the transfer of units referred to in section 208. 393(2)

[Table: Sl. No. 12] 12.5% 1053 196C Any income by way of interest or dividends in respect of bonds or Global Depository Receipts referred to in section 209. 393(2)

[Table: Sl. No. 13] 10% 1054 196C Any income by way of long-term capital gains arising from the transfer of bonds or Global Depository Receipts referred to in section 209. 393(2)

[Table: Sl. No. 14] 12.5% 1055 196D Any income in respect of securities referred to in section 210(1) [Table: Sl. No. 1]. 393(2)

[Table: Sl. No. 15] 20% 1056 196D Any income in respect of securities referred to in section 210(1) [Table: Sl. No. 1]. 393(2)

[Table: Sl. No. 16] 10% 1057 195 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”. 393(2)

[Table: Sl. No. 17] Average rate as applicable 1058 194B Any income by way of winnings (other than winnings from Sl. No. 2 of the table at section 393(3)) 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 393(3)

[Table: Sl. No. 1] 30% 1059 194B Any income by way of winnings (other than winnings from Sl. No. 2 of the table at section 393(3)) 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 where consideration, is made in kind or cash is not sufficient to meet the tax liability and tax has been paid before such winnings are released 393(3)

[Table: Sl. No. 1] Note 2 30% 1060 194BA Any income by way of winnings from online game. 393(3)

[Table: Sl. No. 2] 30% 1061 194BA Any income by way of winnings from online games, is made in kind or cash is not sufficient to meet the tax liability and tax has been paid before such winnings are released 393(3)

[Table: Sl. No. 2] Note 2 30% 1062 194BB Any income by way of winnings from any horse race. 393(3)

[Table: Sl. No. 3] 30% 1063 194G 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 393(3)

[Table: Sl. No. 4] 2% 1064 194N Payment of certain amounts in cash by bank/ post office/ co-operative society to a deductee being a co-operative society 393(3)

[Table: Sl. No. 5.D(a)] 2% 1065 194N Payment of certain amounts in cash by bank/ post office/ co-operative society to a deductee being a person other than co-operative society 393(3)

[Table: Sl. No. 5.D(b)] 2% 1066 194EE Any amount referred to in section 80CCA(2)(a) of the Income-tax Act, 1961 (43 of 1961). 393(3)

[Table: Sl. No. 6] 10% 1067 194T 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). 393(3)

[Table: Sl. No. 7] 10% –

[Table: Sl. No. 6.D(a)] 1% 1076 206C – MA Sale consideration exceeding threshold limit in case of sale of wrist watch 394(1)

[Table: Sl. No. 6.D(b)] 1% 1077 206C – MB Sale consideration exceeding threshold limit in case of sale of art piece such as antiques, painting, sculpture 394(1)

[Table: Sl. No. 6.D(b)] 1% 1078 206C – MC Sale consideration exceeding threshold limit in case of sale of collectibles such as coin, stamp 394(1)

[Table: Sl. No. 6.D(b)] 1% 1079 206C – MD Sale consideration exceeding threshold limit in case of sale of yacht, rowing boat, canoe, helicopter 394(1)

[Table: Sl. No. 6.D(b)] 1% 1080 206C – ME Sale consideration exceeding threshold limit in case of sale of pair of sunglasses 394(1)

[Table: Sl. No. 6.D(b)] 1% 1081 206C – MF Sale consideration exceeding threshold limit in case of sale of bag such as handbag, purse 394(1)

[Table: Sl. No. 6.D(b)] 1% 1082 206C – MG Sale consideration exceeding threshold limit in case of sale of pair of shoes 394(1)

[Table: Sl. No. 6.D(b)] 1% 1083 206C – MH Sale consideration exceeding threshold limit in case of sale of sportswear & equipment such as golf kit, ski-wear 394(1)

[Table: Sl. No. 6.D(b)] 1% 1084 206C – MI Sale consideration exceeding threshold limit in case of sale of home theatre system 394(1)

[Table: Sl. No. 6.D(b)] 1% 1085 206C – MJ Sale consideration exceeding threshold limit in case of sale of horse for horse racing in race clubs and horse for polo 394(1)

[Table: Sl. No. 6.D(b)] 1% 1086 206C – T Remittance under the Liberalised Remittance Scheme of an amount or aggregate of the amounts exceeding threshold limit for purposes of education or medical treatment (Threshold limit – ₹ 10 lakh) 394(1)

[Table: Sl. No. 7.D(a)] 2% 1087 206C – Q Remittance under the Liberalised Remittance Scheme of an amount or aggregate of the amounts exceeding threshold limit for purposes other than education or medical treatment (Threshold limit – ₹ 10 lakh) 394(1)

[Table: Sl. No. 7.D(b)] 20% 1088 206C – O Sale of “overseas tour programme package” including expenses for travel or hotel stay or boarding or lodging or any such similar or related expenditure with amount or aggregate of amounts up to ₹ 10,00,000. 394(1)

[Table: Sl. No. 8.D(a)] 2% 1089 206C – O Sale of “overseas tour programme package” including expenses for travel or hotel stay or boarding or lodging or any such similar or related expenditure with amount or aggregate of amounts above ₹ 10,00,000. 394(1)

[Table: Sl. No. 8.D(b)] 2% 1090 206C – F Use of parking lot for the purpose of business, excluding mining and quarrying of mineral oil (including petroleum and natural gas). 394(1) [Table: Sl. No. 9] 2% 1091 206C – G Use of toll plaza for the purpose of business, excluding mining and quarrying of mineral oil (including petroleum and natural gas). 394(1) [Table: Sl. No. 9] 2% 1092 206C – H Use of mine or quarry for the purpose of business, excluding mining and quarrying of mineral oil (including petroleum and natural gas). 394(1) [Table: Sl. No. 9] 2% STEPS INVOLVED IN MAKING TDS PAYMENT UNDER THE INCOME TAX ACT, 2025

The procedure for depositing TDS under the new regime has been streamlined through the e-filing portal. The step-by-step process is as follows:

Multiple section codes (up to 20 ) can be selected in a single challan under the new system. Step 10 Click ‘Continue’ and select the mode of payment / bank. Step 11 Click on ‘Pay Now’. You will be redirected to the bank portal to complete the payment. Step 12 Upon successful payment, download the challan for record-keeping and future reference MAJOR CHANGES / KEY POINTS TO BE KEEP IN MIND

1. Selection of Appropriate deductee type: Corporate and non-corporate payment separate challan needs to be paid mandatorily depending of type of deductee. Incorrect selection may lead to mismatches in TDS returns and compliance issues.

2. Selection of correct residential status of the deductee: Separate challans must be prepared and use for Resident and Non Resident Payment. Selection of residential status in challan was not there in old TDS challans, deductor need to verify this carefully while making the payment.

3. Multiple Section Codes in a Single Challan: As per the new challan system Multiple section codes can be selected for the chosen deductee type in a single challan, subject to maximum of 20 codes. If more than 20 codes are required, and additional challan must be filled.

In simple words Earlier, separate challans were required for each section. Now, multiple TDS liabilities across different sections can be paid through a single challan, significantly reducing compliance effort.

4. Tax Year Not Assessment Year: Please note from FY 2026-27 onwards assessment year concept was not there so financial year will always be selected for payment which is termed as tax year.

The new TDS payment mechanism under the Income Tax Act, 2025 reflects a clear shift towards simplification and system-driven compliance. While the fundamental principles of TDS remain unchanged, the introduction of:

ensures better accuracy, reduced duplication, and improved ease of compliance.

However, these changes also demand greater attention to detail while making payments, as incorrect selection of deductee type, residential status, or section codes may lead to reconciliation issues and notices.

In essence, the new system is simpler in design but stricter in execution, making it essential for professionals and businesses to adapt carefully.

Readers should treat this as a tax and compliance update, not as personal advice.

This article is for general information based on available source information. It should not be considered legal, tax, investment, or financial advice.