TDS/TCS Migration to New Sections (From 1 April 2026)

TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) Migration to New Sections (From 1 April 2026)

Applicable for FY 2025–26, Visible in Returns from AY 2026–27 : The change must be applied from 1 April 2026 itself. Do not wait for AY 2026–27, the new deduction/collection codes & rates come into force from the start of the financial year.

Payments to Residents , New Section & Code Mapping

1. Salary (Old Sec 192 → New Sec 392)

2. Provident Funds Withdrawal (192A → 392(7)) : Code 1004 → 10%

3. Insurance Commission (194D → 393(1)) : Code 1005 → 5%

4. Commission/Brokerage (194H → 393(1)) : Code 1006 → 2%

5. Rent

• Rent by Individual/ Hindu Undivided Family   ≥ ₹50,000 (194IB) → Code (blank) → 2%
• General Rent (194I)
  • Plant/Machinery/Furniture → 1008 → 2%
  • Land/Building → 1009 → 10%

6. Immovable Property Transfer (194IA/IC/LA → 393(1)) : Codes /, 1011, 1012 → 1% / 10% / 10%

7. Capital Market Distributions : Mutual funds, business trusts, securitization trusts → Codes 1013–1018 → 10% / 25%

8. Interest

• Securities (193)  to 1019 → 10%
• Other than securities (194A) to  1020–1022 → 10%

9. Contract Payments (194C)

• IND/HUF → 1023 → 1%
• Others → 1024 → 1%

10. Professional & Technical Fees (194J)

• Technical/royalty/non-compete → 1026 → 2%
• Professional/director → 1027–1028 → 10%

11. Purchase of Goods (194Q) : 1031 → 0.1%

12. Perquisite (194R)

• Cash/Convertible → 1033 → 10%
• Cash/Kind/Mixed → 1034 → 10%

13. E-Commerce (194O) : 1035 → 1%

14. Virtual Digital Assets (194S)

• IND/HUF (non-audit) → (blank) → 1%
• Others → 1037–1038 → 1%

Payments to Non-Residents : Includes PF, sports persons, interest on foreign borrowings, IFSC bonds, infra debt fund, investment funds, FIIs, GDR, business trust income. Codes 1039–1057 (5%, 10%, 12.5%, 20%, 30% depending on category)

Payments to Any Person, Winnings, Lottery, Cash Withdrawal

Tax Collected at Source Section Codes (New): Goods (Higher uniform 2% rate except motor vehicles)

• Liquor → 1068 → 2%
• Scrap → 1073 → 2%
• Minerals → 1074 → 2%

High-Value Goods (> INR 10L)

Motor vehicle → 1075 → 1%

Luxury items (watch, art, yacht, bags, sunglasses, shoes, sportswear, home theatre, etc.): Codes 1076–1085 → 1%

Liberalised Remittance Scheme (206C(1G))

• Education/Medical → 1086 → 2%
• Others → 1087 → 20%

Overseas Tour Packages

• Up to 10L → 1088 → 2%
• Above 10L → 1089 → 2%

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