The Statutory Brief

IT Act 1961 → 2025 / Section 195

TDS

Section 195 → Section 393

TDS on interest and other sums paid to non-residents (residual provision)

Section 195 of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(2), Table Sl. No. 17

Income-tax Act, 1961Section 195

  • Any sum chargeable to tax paid to a non-resident (other than salary) attracts TDS at rates in force
  • Application to the AO to determine the taxable proportion (195(2))
  • Applies to residents and non-residents alike as payers
  • Form 15CA/15CB reporting for foreign remittances

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

Income-tax Act, 2025Section 393(2), Table Sl. No. 17

  • Section 393(2), Table Sl. No. 17: rates in force
  • Proportion determination now in section 395(2)
  • Note 3 keeps the 'all persons, resident or non-resident' obligation
  • Remittance reporting forms renumbered (Form 145 / Form 146, formerly 15CA / 15CB)

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

What changed

Renumbered as the residual entry of the non-resident TDS table in section 393(2). Substance unchanged.

Practice notes

  • Treaty rates still apply where the payee furnishes a tax residency certificate and other required particulars.
  • Non-residents without PAN: see section 397(2) for the higher-rate exceptions.

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 section 195 called in the new Income-tax Act, 2025?

Section 195 of the Income-tax Act, 1961 corresponds to Section 393(2), Table Sl. No. 17 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 195 under the new Income Tax Act?

Renumbered as the residual entry of the non-resident TDS table in section 393(2). Substance unchanged.

Is section 195 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 195 of the 1961 Act. Section 393(2), Table Sl. No. 17 of the 2025 Act applies from tax year 2026-27.

Related sections

206C→394Tax collected at source (TCS) on specified sales, LRS remittances, overseas tour packages, motor vehicles and parking/toll/mine leases194J→393TDS on fees for professional or technical services, royalty and director's fees54F→86Exemption on long-term capital gain from any asset other than a residential house, when net consideration is invested in a residential house