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TDS on Payment to Non Resident (Section 393) w.e.f 01.04.2026

TDS on Payment to Non Resident (Section 393) w.e.f 01.04.2026

TDS ON PAYMENTS TO NON-RESIDENT

(Section – 393, Income-Tax Act, 2025)

[With effect from 1st April, 2026]

Sl. No. Nature of income or sum Payee Payer Rate
A B C D E
1. Any income referred to in section 211.
(a) A non-resident sportsman (including an athlete) or an entertainer, who is not a citizen of India; or
(b) a non-resident sports association or institution.
Any person. 20%
2. Any income by way of interest payable in respect of moneys borrowed in foreign currency from a source outside India, —

(a) under a loan agreement or issue of long-term infrastructure bond on or after the 1st July, 2012 but before the 1st July, 2023; or
(b) by way of issue of any long-term bond on or after the 1st October, 2014 but before the 1st July, 2023,

which is approved by the Central Government in this behalf.

 Any non-resident (not being a company) or a foreign company. Any Indian company or a business trust. 5%
3. Any income by way of interest payable in respect of moneys borrowed from a source outside India by way of issue of rupee denominated bond before the 1st July, 2023. Any non-resident (not being a company) or a foreign company. Any Indian company or a business trust. 5%
4. Any income by way of interest payable in respect of moneys borrowed from a source outside India by way of issue of any long-term bond or rupee denominated bond, which is listed only on a recognized stock exchange located in any International Financial Services Centre. Any non-resident (not being a company) or a foreign company. Any Indian company or a business trust.
(a) 4%, where such bonds are issued on or after the 1st April, 2020 but before the 1st July, 2023; or
(b) 9%, where such bonds are issued on or after the 1st July, 2023.
5. Any income by way of interest. Any non-resident (not being a company) or a foreign company. Any infrastructure debt fund referred to in Schedule VII (Table: Sl. No. 46). 5%
6. Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: Sl. No. 3). Any unit holder, being a non-resident (not being a company) or a foreign company. Any business trusts.
(a) 5%, in case of income of the nature referred to in Schedule V [Table: Sl. No. 3. B(a)]; and
(b) 10%, in case of income of the nature referred to in Schedule V [Table: Sl. No. 3. B(b)].
7. Any distributed income referred to in section 223, being of the nature referred to in Schedule V (Table: Sl. No. 4). Any unitholder, being a non-resident (not being a company) or a foreign company. Any business trusts. Rates in force.
8. Any income, other than that proportion of income which is exempt under Schedule V (Table: Sl. No. 2), in respect of units of an investment fund specified in section 224. Any unitholder, being a non-resident (not being a company) or a foreign company. Any investment fund specified in section 224. Rates in force.
9. Any income in respect of an investment in a securitization trust specified in section 221. Any investor, being a non-resident (not being a company) or a foreign company. Any securitization trust specified in section 221. Rates in force.
10. Any income—

(a) in respect of units of a Mutual Fund specified under Schedule VII (Table: Sl. No. 20 or 21); or
(b) in respect of units from the specified company.
Any non-resident (not being a company) or a foreign company. Any person. As per Note 2.
11. Any income in respect of units referred to in section 208. Any offshore fund. Any person. 10%
12. Any income by way of long-term capital gains arising from the transfer of units referred to in section 208; Any offshore fund. Any person. 12.5%
13. Any income by way of interest or dividends in respect of bonds or Global Depository Receipts referred to in section 209. Any non-resident. Any person. 10%
14. Any income by way of long-term capital gains arising from the transfer of bonds or Global Depository Receipts referred to in section 209. Any non-resident. Any person. 12.5%
15. Any income in respect of securities referred to in section 210(1) (Table: Sl. No. 1). Any Foreign Institutional Investor. Any person. As per Note 2.
16. Any income in respect of securities referred to in section 210(1) (Table: Sl. No. 1).
  A specified fund referred to in Schedule VI [Note 1(g)].
Any person. 10%
17. Any interest (not being interest referred to against serial numbers 2, 3, 4 and 5) or any other sum chargeable under the provisions of this Act, not being income chargeable under the head “Salaries”. Any non-resident (not being a company) or a foreign company. Any person. Rates in force.

Note 1.—For serial numbers 2, 3 and 4, the interest payable shall be income to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan or the bond and its repayment.

Note 2.—For serial numbers 10 and 15, tax shall be deducted at the rate of—

(a) 20%; or
(b) where an agreement referred to in section 159(1) or 159(2) applies to the payee and if the payee has furnished a certificate referred to in section 159(8), as the case may be, then, income-tax shall be deducted at the rate or rates of income-tax provided in such agreement for such income, if such rate is lower than 20%.

Note 3.—For serial number 17, —

(a) if interest is payable by the Government or a public sector bank or a public financial institution within the meaning of Schedule VII (Note 3), deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode;
(b) the obligation to deduct tax at source and comply with the provisions of this serial number extend to all persons resident or non-resident, whether or not, the non-resident person has—
(i) a residence or place of business or business connection in India; or
(ii) any other presence in any manner whatsoever in India.

(3) Where any income or sum of the nature specified in column B of the Table below, is credited or paid by the person specified in column C during the tax year, to any person, the person responsible for making payment of such income or sum, shall deduct income-tax—

(a) on the entire amount of such income or sum, where the amount or aggregate of amounts exceed the threshold limit specified in column D, or on net winnings as per Note 1 of the Table;
(b) at the rate specified in column D;
(c) at the time of payment thereof in cash or by way of a cheque or a draft or by any other mode, or as specified therein; and
(d) subject to the provisions of sub-sections (4), (5), (6), (8) and (9).

 

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Name: CA P P SINGH
Qualification: LLM(P) LLB, FCA, CS, GSTCC, B.Sc. (H),
Company: PPSINGH AND ASSOCIAES
Location: NCR DELHI
Author of several books on GST, TDS, and TCS under income tax, Faculty in various institutes including IIM, CA /CS institute, and NACIN for the training of GST officers, handling ligations of income tax, GST, service tax, Delhi VAT, arbitration, commercial disputes, advisory services on project planning and implementation legal aspects, income tax, GST, Company law matter, commercial dispute, arbitration, audit& certification of various corporate and non-corporate body and NGO.

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