TDS Under Sections 392 and 393: Reading the New Tables and Codes

Under the Income-tax Act, 1961, every kind of TDS had its own section: 192 for salary, 194A for interest, 194C for contractors, 194J for professional fees. The Income-tax Act, 2025, in force from 1 April 2026, puts almost all of them into two sections. Section 392 covers salary. Section 393 covers nearly everything else, as rows in tables.

So instead of "TDS under section 194A", you now read references like section 393(1) [Table: Sl. No. 5(ii)]. This post explains how to read that reference, and lists the official section codes that deductors use in their TDS statements for Tax Year 2026-27, taken from the Income-tax Rules, 2026.

Payments made up to 31 March 2026 stay under the 1961 Act and its old section numbers, including in the TDS statements and Form 16/16A for FY 2025-26. The new numbers apply to payments from 1 April 2026.

How sections 392 and 393 are laid out

Other TDS machinery has new numbers too. Lower or nil deduction certificates are issued under section 395(1) (application in Form 128). The higher rate for a payee without a PAN is in section 397(2). Quarterly TDS statements are filed under section 397(3)(b).

Reading a table reference

A reference such as 393(1) [Table: Sl. No. 6(iii).D(b)] has four parts:

1. 393(1): the sub-section, which tells you the payee group (here, residents).
2. Sl. No. 6: the serial number of the row in that table. Row 6 groups payments for work and services.
3. (iii): the sub-item within the row. Here, fees paid by a "specified person" for technical or professional services.
4. D(b): the column and clause. Where a row treats two cases differently, column D splits them into (a) and (b); here (b) is professional fees, as against (a) for technical services.

Unofficial lists online sometimes give different serial numbers for the same payment. The safest source is the list of section codes in the official TDS statement forms, because deductors file against those codes and they quote the table reference in full.

The official section codes for common payments

Form 138 (the salary TDS statement that replaces Form 24Q) and Form 140 (the non-salary statement that replaces Form 26Q) each end with a list of section codes. The table below is taken from those lists in the Income-tax Rules, 2026 as notified on 20 March 2026. The "old section" column is the 1961 Act section that covered the same payment.

Codes 1001 to 1003 and 1032 are listed in Form 138; the rest are from Form 140. Non-resident payments under section 393(2) have their own codes in Form 144.

What changed in the rates

The Budget 2026 memorandum restates a few of the new rates, which confirms they carried over from the old sections. Under section 393(1) [Table: Sl. No. 6(i)], contract payments are taxed at 1% when the contractor is an individual or HUF and 2% otherwise. Under Sl. No. 6(iii), fees for technical services, film royalty and call centres are at 2% and other professional fees at 10%. Under Sl. No. 6(ii), individuals and HUFs deduct 2% on contract, commission and professional payments that fall under that row. The Finance Act, 2026 also brought supply of manpower within "work" in section 402(47), so it falls under Sl. No. 6(i), or 6(ii) where the payer is an individual or HUF covered by that row.

For thresholds and rates not quoted here, read column D of the row in the Act or ask the deductor which code and rate they applied.

Payments by individuals: one challan-cum-statement

If you are an individual paying rent above the threshold, buying property, making contract or professional payments of the kind section 194M covered, or buying a virtual digital asset, you don't need a TAN. You deposit TDS with Form 141, a challan-cum-statement under section 393(1) [Table: Sl. No. 2(i), 3(i), 6(ii) and 8(vi)]. These four rows are the successors of sections 194-IB, 194-IA, 194M and 194S. The Finance Act, 2026 also removed the TAN requirement for a resident individual or HUF buying property from a non-resident, from 1 October 2026.

Where you see these codes as a taxpayer

You deal with these codes mostly when something doesn't match:

• TDS certificates. From Tax Year 2026-27, salary TDS is certified in Form 130 and other TDS in Form 131, under section 395. These replace Form 16 and Form 16A.
• Form 168 and AIS. The TDS that deductors report against your PAN flows into Form 168 (the new Form 26AS) and AIS. If a payment shows under an unexpected section, the deductor most likely picked the wrong code; see how Form 168 relates to AIS and TIS.
• Notices and section numbers. If a notice quotes a new section and you want the old one, see old to new section numbers for notices.

If a deductor has used the wrong code or PAN, only the deductor can fix it by filing a correction statement. You can flag the entry through AIS feedback while you wait.

Frequently asked questions

Is section 194A gone?

For payments from 1 April 2026, yes. Interest TDS now sits in section 393(1) [Table: Sl. No. 5]. Interest paid up to 31 March 2026 stays under section 194A of the 1961 Act, and its TDS appears in the FY 2025-26 Form 16A and Form 26AS.

What is the difference between codes 1020 and 1021?

Both are interest from a bank, co-operative bank or post office. Code 1020 is used when the depositor is a senior citizen and 1021 for everyone else. Senior citizens have a higher threshold, so a wrong code can lead to TDS where none was due.

Which section covers TDS on salary from two employers?

Section 392, the same section as all salary TDS. To get one employer to account for salary from another, you give details in Form 122, the successor of Form 12B.

Why do some websites give different serial numbers?

Several lists were made from early drafts of the Act or the Bill. The codes and references above are from the TDS statement forms in the notified Income-tax Rules, 2026; prefer those, and check any later amendment notified on the portal.

Sources

• Income-tax Rules, 2026 (Forms 121, 128, 130, 131, 138, 140, 141, 144), notified 20 March 2026
• Finance Bill, 2026
• Memorandum explaining the provisions of the Finance Bill, 2026
• Notification No. 121/2026: revised Forms 132 and 141
• Form No. 121: Frequently Asked Questions