TDS Provisions under Income Tax Act, 2025 – Complete Guide with Old vs New Section Mapping
Introduction
The Income Tax Act, 2025 has brought a major structural changes to tax laws. One of the most important changes is the reorganisation of Tax Deducted at Source (TDS) provisions.
Under the Income-tax Act, 1961, taxpayers and professionals were required to refer to multiple TDS sections such as Section 192, Section 194A, Section 194C, Section 194H, Section 194I, Section 194J, Section 194Q, Section 194R, Section 194S and several others.
The Income Tax Act, 2025 simplifies this framework by consolidating various TDS provisions into a streamlined structure, primarily under Sections 392 and 393. As a result, many taxpayers are searching for answers to questions such as:
- What is the new section for 194I?
- What happened to Section 194C?
- What is Section 393 of the Income Tax Act, 2025?
- How are TDS provisions organised under the new Act?
- What is the old vs new TDS section mapping?
This comprehensive guide explains everything you need to know about TDS under the Income Tax Act, 2025, the restructuring of TDS sections, old versus new section mapping, compliance requirements in simple language.
What is TDS?
TDS (Tax Deducted at Source) is a system through which tax is deducted at the time of making specified payments.
Instead of collecting tax only when a taxpayer files their Income Tax Return, the Government collects tax throughout the year whenever income is earned.
The person making the payment deducts tax and deposits it with the Government on behalf of the recipient.
TDS may apply to:
- Salary
- Interest
- Rent
- Commission
- Brokerage
- Contractor Payments
- Professional Fees
- Purchase of Goods
- Dividend
- Virtual Digital Assets
- Partner Remuneration
- Other specified payments
Why Was the TDS Structure Changed in the Income Tax Act, 2025?
The Income-tax Act, 1961 had become very large and complex after numerous amendments over several decades.
For TDS alone, taxpayers had to remember many section numbers:
- Section 192 – Salary
- Section 194A – Interest
- Section 194C – Contractors
- Section 194H – Commission
- Section 194I – Rent
- Section 194J – Professional Fees
- Section 194Q – Purchase of Goods
- Section 194R – Benefits or Perquisites
- Section 194S – Virtual Digital Assets
The Government introduced the Income Tax Act, 2025 to make the law simpler, more organised and easier to understand.
The objective is simplification rather than introducing entirely new TDS concepts.
TDS Structure under Income Tax Act, 2025
The new Act groups TDS provisions into broader sections.
Section 392 – TDS on Salary
Section 392 deals with tax deduction from salary income.
This provision broadly corresponds to the old Section 192 of the Income-tax Act, 1961.
Section 393 – TDS on Payments Other Than Salary
Section 393 is one of the most important sections under the Income Tax Act, 2025.
It covers various non-salary payments that were earlier governed by multiple separate sections under the old Act.
This section acts as a consolidated framework for TDS compliance.
Old vs New TDS Section Mapping
The following table will help taxpayers understand the transition from the Income-tax Act, 1961 to the Income Tax Act, 2025.
| Nature of Payment | Old Section | New Section |
|---|---|---|
| Salary | 192 | 392 |
| Interest Other Than Securities | 194A | 393 |
| Contractor Payments | 194C | 393 |
| Insurance Commission | 194D | 393 |
| Commission & Brokerage | 194H | 393 |
| Rent | 194I | 393 |
| Professional Fees | 194J | 393 |
| Purchase of Goods | 194Q | 393 |
| Benefits or Perquisites | 194R | 393 |
| Virtual Digital Assets | 194S | 393 |
| Payments to Partners | 194T | 393 |
Important: While section numbers have changed, taxpayers should carefully review the detailed provisions, thresholds and rates applicable under the new law.
What is Section 393 of the Income Tax Act, 2025?
Section 393 is the principal TDS provision dealing with payments other than salary.
Instead of maintaining separate sections for every category of payment, the new law groups various TDS transactions under a common framework.
This makes it easier for businesses, accountants and tax professionals to understand and apply TDS provisions.
Payments Covered Under Section 393
Section 393 broadly covers:
TDS on Interest
Applicable on specified interest payments made by banks, financial institutions and other persons.
TDS on Rent
Covers rent paid for:
- Land
- Building
- Machinery
- Equipment
- Furniture
- Plant
TDS on Contractor Payments
Applicable to payments made for carrying out work, contracts and sub-contracts.
TDS on Commission and Brokerage
Applicable on specified commission and brokerage transactions.
TDS on Professional Fees
Covers payments made to:
- Chartered Accountants
- Advocates
- Architects
- Engineers
- Consultants
- Technical Professionals
TDS on Purchase of Goods
Applicable in specified transactions subject to prescribed conditions.
TDS on Partner Remuneration
Includes specified payments made by firms to partners.
TDS on Virtual Digital Assets (VDA’s)
Includes transactions involving cryptocurrencies and other notified virtual digital assets.
Key Compliance Requirements
Every deductor should ensure:
Correct Identification of Transactions
Review whether TDS applies before making payment.
Timely Deduction
Deduct tax at the applicable rate whenever required.
Timely Deposit
Deposit TDS within prescribed due dates.
TDS Return Filing
File quarterly TDS returns accurately.
TDS Certificate Issuance
Issue TDS certificates to deductees within the prescribed timelines.
Consequences of TDS Non-Compliance
Failure to comply with TDS provisions may lead to:
- Interest liability
- Late filing fees
- Penalties
- Income Tax notices
- Disallowance of expenses
- Litigation and assessment issues
For businesses, regular TDS review is essential to avoid unnecessary tax exposure.
Frequently Asked Questions
Is Section 194I still applicable under the Income Tax Act, 2025?
The provisions relating to TDS on rent have been reorganised under the new framework, primarily within Section 393.
What is the new section for TDS on contractor payments?
The provisions earlier covered under Section 194C have been incorporated within the consolidated TDS framework under Section 393.
Which section covers TDS on professional fees?
The provisions corresponding to old Section 194J are covered under Section 393.
What is the most important TDS section under the Income Tax Act, 2025?
Section 393 is the key provision covering most non-salary TDS transactions.
Has TDS been removed under the new Act?
No. TDS continues to be an important compliance mechanism under the Income Tax Act, 2025.
Conclusion
The Income Tax Act, 2025 has simplified the TDS framework by reorganising multiple provisions into a more structured and user-friendly format. For taxpayers, businesses, accountants and tax professionals, understanding Section 392 and Section 393 is essential for proper compliance.
If you are still referring to old sections such as 194A, 194C, 194H, 194I, 194J, 194Q or 194T, it is important to understand their corresponding provisions under the new law and update your compliance processes accordingly.