The Statutory Brief

IT Act 1961 → 2025 / Section 194H

TDS

Section 194H → Section 393

TDS on commission or brokerage (other than insurance commission)

Section 194H of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 1(ii); exclusion in 393(4), Sl. No. 1

Income-tax Act, 1961Section 194H

  • Rate 2% (from 1 October 2024)
  • Threshold ₹20,000 in a year (from 1 April 2025)
  • Individuals/HUFs deduct only if business turnover exceeded ₹1 crore (profession ₹50 lakh) last year
  • No TDS on BSNL/MTNL commission to PCO franchisees

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 1(ii); exclusion in 393(4), Sl. No. 1

  • Section 393(1), Table Sl. No. 1(ii): 2%
  • Threshold ₹20,000
  • Payer is a 'specified person' (section 402(37)), the same turnover test
  • BSNL/MTNL exclusion in 393(4), Table Sl. No. 1

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393. Rate, threshold and payer test unchanged.

Practice notes

  • Insurance commission (old 194D) is the separate entry 393(1), Table Sl. No. 1(i).
  • For payments from 1 April 2026, quote section 393 with the table entry in TDS returns.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS rate on commission under the new Income Tax Act 2025?

2% on commission or brokerage above ₹20,000 in the year, under section 393(1), Table Sl. No. 1(ii).

What is section 194H called in the new Income-tax Act, 2025?

Section 194H of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 1(ii); exclusion in 393(4), Sl. No. 1 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194H under the new Income Tax Act?

Consolidated into section 393. Rate, threshold and payer test unchanged.

Is section 194H still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194H of the 1961 Act. Section 393(1), Table Sl. No. 1(ii); exclusion in 393(4), Sl. No. 1 of the 2025 Act applies from tax year 2026-27.

Related sections

194J→393TDS on fees for professional or technical services, royalty and director's fees194C→393TDS on payments to contractors and sub-contractors194-I→393TDS on rent paid by businesses (and by individuals/HUFs, old 194-IB)