Section 393 of the Income Tax Act, 2025: Understanding the Consolidated TDS Framework – A Deep Dive into Table 1

Overview of the New Tax Legislation

India's tax landscape is set for a landmark transformation with the introduction of the Income Tax Act, 2025, which is slated to take effect from 1st April 2026. This legislation is designed to replace the decades-old Income Tax Act, 1961, with the central objective of simplifying, modernizing, and rationalizing the country's direct tax structure.

Among the most significant structural reforms introduced by the new Act is the consolidation of all Tax Deducted at Source (TDS) provisions under a single umbrella provision — Section 393. Previously, TDS obligations were scattered across multiple sections under the 1961 Act, often creating confusion and compliance challenges for assessees and deductors alike. The new framework addresses this by bringing all TDS-related provisions under one roof, making the law more accessible, organized, and easier to interpret.

Important Note: While the structural reorganization under Section 393 is a significant legislative development, it must be clearly understood that no substantial changes have been made to the underlying TDS provisions themselves. The amendments are primarily in the nature of renumbering and structural consolidation. The rates and thresholds remain largely consistent with the existing framework, barring a few updates.

Structure of Section 393: Six Tables at a Glance

Section 393 of the Income Tax Act, 2025 is organized into six distinct tables, each addressing a separate category of TDS obligations. This tabular format is a notable departure from the narrative section-based approach used in the 1961 Act and reflects a clear effort toward legislative simplification.

This article focuses exclusively on Table 1 under Section 393(1), which covers the most commonly applicable TDS categories for assessees across India. The remaining five tables will be covered in subsequent parts of this series.

Table 1 Under Section 393(1): Category-wise TDS Analysis

1. Commission and Brokerage

Reference: 393(1)-T1-S.N 1(i & ii)

TDS provisions under this entry apply to two sub-categories:

  • (i) Commission or Brokerage — Insurance sector
  • (ii) All other forms of commission or brokerage

Threshold Limit: TDS is triggered when the aggregate commission or brokerage paid exceeds Rs. 20,000 per annum.

Applicable Rate:

  • Companies / Cooperative Societies / Firms: 2%
  • Individuals / HUF: 2%

For example, if Mr. Sharma, an insurance agent, receives a commission of Rs. 25,000 in a financial year, the deductor is required to deduct TDS at 2% on the entire payment since it crosses the Rs. 20,000 threshold.

2. Rent

References: 393(1)-T1-S.N 2(i) and 393(1)-T1-S.N 2(ii)

Rent-related TDS provisions are divided into two broad categories based on the nature of the payer and the asset rented.

2(i) — Rent Payable by Individuals/HUF or Businesses

This sub-entry applies to:

  • Individuals or HUF whose gross receipts exceed the prescribed limits
  • Businesses with turnover exceeding Rs. 1 crore
  • Professionals with gross receipts exceeding Rs. 50 lakhs

Threshold: Rs. 50,000 per month