Income Tax

TDS on Rent & Professional Fees: New Section 393 Codes Replacing 194-I and 194J

CA Nikhil Gupta·June 2026·7 min readTDS · ACT 2025

Reviewed by CA Nikhil Gupta · Last reviewed 26 July 2026

Two of the most commonly used TDS sections — Section 194-I (rent) and Section 194J (professional and technical fees) — get new homes under the Income-tax Act, 2025: both move into the Section 393(1) consolidated table, each with its own payment code. Note that both thresholds were already raised by the Finance Act, 2025 (effective 1 April 2025) before the renumbering — the current, higher thresholds are what carry forward into Section 393, not the older pre-FY2025-26 figures. Here's the mapping, with worked examples for both.

TDS on Rent: Old Section 194-I

Under the Income-tax Act, 1961, Section 194-I required tenants (other than individuals/HUFs not subject to audit, with some exceptions for high-rent individual tenants) to deduct TDS on rent payments:

2% — rent for plant, machinery, or equipment
10% — rent for land, building, furniture, or fittings
Original threshold (before FY2025-26): TDS applied if annual rent exceeded ₹2,40,000
Current threshold (Finance Act 2025, effective 1 April 2025 — carries into Section 393): TDS applies if rent for a month or part of a month exceeds ₹50,000

Separately, Section 194-IB required individuals/HUFs (not otherwise subject to TDS audit requirements) paying rent above ₹50,000/month to deduct TDS at 5% (reduced from 5% to 2% in recent years) — typically deducted once at year-end or on the last month of tenancy.

TDS on Professional/Technical Fees: Old Section 194J

Section 194J required deduction of TDS at:

10% — fees for professional services, royalty, or non-compete fees
2% — fees for technical services, call centre payments, or certain royalty for sale/distribution/exhibition of cinematographic films
Original threshold (before FY2025-26): TDS applied if payment in a financial year exceeded ₹30,000 per payee
Current threshold (Finance Act 2025, effective 1 April 2025 — carries into Section 393): TDS applies if payment in a financial year exceeds ₹50,000 per payee

New Section 393(1) References

Both transaction types move into the consolidated Section 393(1) table, each assigned its own table serial number and numeric payment code (analogous to how contractor payments under old Section 194C became Section 393(1), Sl. No. 6(i), Code 1017, as covered in our dedicated article). The rates described above — 2%/10% for rent depending on asset type, and 10%/2% for professional/technical fees — are reported to be carried forward unchanged. The thresholds that carry forward are the current, Finance Act 2025-amended figures already in force since 1 April 2025 — ₹50,000 for a month or part of a month for rent, and ₹50,000 per financial year for professional/technical fees — not the older pre-FY2025-26 figures (₹2,40,000/year and ₹30,000/year respectively). Only the section/code citation on TDS returns and certificates changes at the FY2026-27 transition.

⚠ Practical impact: If your business pays office rent and also engages consultants, auditors, or technical service providers, both these TDS categories will appear under Section 393(1) with different payment codes from 1 April 2026 — your accounting software should map these automatically, but it's worth confirming with your TDS software vendor before the first FY2026-27 quarterly return.

Worked Example: Office Rent

A company pays ₹65,000/month (₹7,80,000/year) for office premises:

Pre-FY2025-26 rule: Since annual rent (₹7,80,000) exceeded the old ₹2,40,000 threshold, TDS was deducted at 10% (building rent) = ₹6,500/month, under Section 194-I.
Current rule (FY2025-26 onward, carrying into Section 393 from FY2026-27): Since monthly rent (₹65,000) exceeds the current ₹50,000/month threshold, deduct TDS at 10% = ₹6,500/month — reported under Section 393(1) with the applicable payment code for building/land rent from FY2026-27. Note: a monthly rent of exactly ₹50,000 does not exceed the threshold and would not attract TDS under this rule.

Worked Example: CA Professional Fees

A business pays its CA firm ₹80,000 for the year for audit and tax advisory services:

Pre-FY2025-26 rule: Since the payment exceeded the old ₹30,000 threshold, TDS was deducted at 10% = ₹8,000, under Section 194J.
Current rule (FY2025-26 onward, carrying into Section 393 from FY2026-27): Since the payment (₹80,000) also exceeds the current ₹50,000/year threshold, deduct TDS at 10% = ₹8,000 — reported under Section 393(1) with the applicable payment code for professional fees from FY2026-27.

What About Section 194-IB (Individual Tenants)?

For individuals/HUFs paying rent above ₹50,000/month who aren't otherwise required to deduct TDS under the standard Section 194-I framework, the simplified once-a-year TDS deduction mechanism (at the rate applicable, historically 2% in recent years) is reported to continue under the Income-tax Act, 2025's renumbered provisions — including the simplified compliance (no TAN required, deduction via Form 26QC-equivalent challan-cum-statement).

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Rates unchanged — plan aheadUse our TDS calculator for rent and professional fee deductions under the new codes.

Open TDS Calculator →

Section 393 — replace “reported to continue” with the enacted current rule

Finin2min answer: For tax year 2026–27, section 393 of the Income-tax Act, 2025 is the operative consolidated TDS table. The current law carries specific rent and professional/technical payment categories with their prescribed thresholds/rates. FY 2025–26 / AY 2026–27 still uses legacy sections such as 194-I/194J. Do not describe enacted section-393 treatment as merely “reported”.

Which law/year? FY 2025–26 / AY 2026–27 is still computed and administered under the Income-tax Act, 1961. For income of the tax year beginning 1 April 2026, the Income-tax Act, 2025 applies. Do not mix an old-Act section/form with a post-1-April-2026 transaction merely because the economic rule looks similar.

Decision table

Situation	2026 treatment / control	Why it matters
FY 2025–26 rent/professional payment	Apply 1961 Act section 194-I/194J and current thresholds/rates.	Old Act still governs that financial year.
Tax year 2026–27 payment	Map transaction to the correct section 393 table entry.	Use current code/return schema from official utility.
Individual/HUF tenant simplified rent TDS	Test the separate simplified category and current prescribed statement.	Do not promise “26QC-equivalent” without the current form.
Exact threshold boundary	Apply wording “exceeds” or aggregate threshold exactly as enacted.	₹50,000 exactly can differ from ₹50,001 depending on category.

Worked practical example

Office rent of ₹65,000 a month in tax year 2026–27 should be mapped to the enacted section 393 rent entry and current filing code; the accountant should not cite 194-I merely because that was the prior-year section.

Evidence checklist

vendor/landlord master
payment ledger
PAN/declarations
TDS computation
quarterly statement/challan/certificate

Primary-source checks: Income-tax Act, 2025 · Income Tax Department TDS rates · Budget 2026 FAQ

Use this with the original article: this module tightens current-law, edge-case and evidence controls; it does not replace the article's existing explanation or your fact-specific professional review.

Frequently Asked Questions

Has the TDS rate and threshold on office rent (10% for buildings, 2% for plant/machinery) changed under the Income-tax Act 2025? ▼

The 10% rate for rent on land/buildings/furniture and 2% rate for plant/machinery/equipment are reported to be carried forward unchanged. The threshold is the current ₹50,000-per-month figure already in force since 1 April 2025 under the Finance Act 2025 amendment to Section 194-I — not the older ₹2,40,000-per-year threshold that applied before FY2025-26. The transaction moves to Section 393(1) with a new payment code, but the rate and threshold logic in force since FY2025-26 remains the same.

What happens to the simplified TDS on rent for individual tenants paying above Rs 50,000/month (old Section 194-IB)? ▼

The simplified once-a-year TDS mechanism for individuals/HUFs paying high rent — including the exemption from requiring a TAN and the challan-cum-statement based compliance — is reported to continue under the Income-tax Act, 2025's renumbered provisions, with the rate and ₹50,000/month threshold unchanged.

Does the Rs 30,000 threshold for TDS on professional fees (old Section 194J) still apply under the new Act? ▼

No. The ₹30,000 per-payee annual threshold was raised to ₹50,000 per financial year by the Finance Act 2025, effective 1 April 2025 — before the Income-tax Act, 2025 renumbering. It is this current ₹50,000 threshold, along with the 10% rate for professional services and 2% rate for technical services, that is reported to be carried forward unchanged into Section 393(1) with a new payment code from 1 April 2026.

Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Primary category: Income Tax
Official starting point: www.incometax.gov.in

Page source links

The prior page did not embed a page-specific external source. The category authority above is the minimum verification starting point; a specific instrument should be added when available.

Primary sources & related provisions

Statutory provisions referenced in this guide:

Section 195 - Income-tax Act