Section 393 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 393(1) of the Income-tax Act, 2025 has one Table for payments to residents. This article covers serial numbers 1 to 3 of that Table: commission or brokerage, rent, and payment on transfer of certain immovable property, with the Notes printed under them. It reads the Table as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. The remaining rows are in the sibling articles listed at the end.
For each row the Table gives the payer, the rate and the threshold limit. Commission on insurance business: rates in force, threshold Rs. 20,000. Other commission or brokerage by a specified person: 2%, threshold Rs. 20,000. Rent: 2% (payer not a specified person) or 2% / 10% (specified person), threshold Rs. 50,000 for a month or part of a month. Immovable property: 1% of the higher of consideration and stamp duty value, threshold fifty lakh rupees; compulsory acquisition: 10%, threshold Rs. 5,00,000.
How section 393(1) works
Where income or a sum of the nature in column B of the Table is credited, paid or distributed by the person in column C during the tax year to a resident, the person responsible for paying shall deduct income-tax:
- (a) on the entire amount, where the amount or aggregate of amounts exceeds the threshold limit in column D (or on the sum as per Note 1 for serial number 8(ii), which is outside this article);
- (b) at the rate in column D;
- (c) at the time of credit to the account of the payee or at the time of payment (cash, cheque, draft or any other mode), whichever is earlier; and
- (d) subject to sub-sections (4), (5), (6), (8) and (9) of section 393.
Payments to non-residents are in section 393(2), covered separately. For the overview of the section see our post on section 393; for the salary deduction rule see section 392. The earlier Act's provisions are mapped in our TDS sections mapping note (see our note on where the earlier Act's provisions sit in the 2025 Act). Section 393 was amended by section 84 of the Finance Act, 2026; in this article's rows the only mark is Note 3 to serial number 3, where the reference "serial number 3(i)" was substituted for "serial number 3(iii)" by the Finance Act, 2026 with effect from 1 April 2026. Later amendments, rules and notifications should be checked.
For help with TDS returns and compliance, see our page on TDS return filing.
Who is a "specified person"?
Section 402(37) defines "specified person" as (a) any person who is not an individual or Hindu undivided family, or (b) an individual or Hindu undivided family whose total sales, gross receipts or turnover from the business or profession carried on exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the tax year immediately preceding the tax year in which the income or sum is credited or paid. The test is on the immediately preceding tax year.
The Table, serial numbers 1 to 3 (each cell as printed)
| Serial number | Nature of income or sum | Payer | Rate | Threshold limit |
|---|---|---|---|---|
| 1(i) | Any income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of insurance policies) | Any person | Rates in force | Rs. 20,000 |
| 1(ii) | Any income by way of commission or brokerage | Specified person | 2% | Rs. 20,000 |
| 2(i) | Any income by way of rent | Person other than specified person | 2% | Rs. 50,000 for a month or part of a month |
| 2(ii) | Any income by way of rent | Specified person | (a) 2%, for the use of any machinery or plant or equipment; and (b) 10%, for the use of any land, or building (including factory building), or land appurtenant to a building (including factory building), or furniture, or fittings | Rs. 50,000 for a month or part of a month, for (a) and (b) |
| 3(i) | Any consideration for transfer of any immovable property (other than agricultural land) | Person | 1% of (a) consideration for transfer of the immovable property; or (b) stamp duty value of such property, whichever is higher | Fifty lakh rupees and as per Note 3 |
| 3(ii) | Any consideration, not being consideration in kind, under the agreement referred to in section 67(14) | Any person | 10% | Nil |
| 3(iii) | Any sum, being in the nature of (a) compensation or the enhanced compensation; or (b) consideration or the enhanced consideration, on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land) | Any person | 10% | Rs. 5,00,000 |
"Rates in force" is defined in section 2(90) and is the rate fixed by the annual Finance Act; this article states no figure for it. In the copy consulted the Table's page break falls inside serial numbers 2 and 3 and the header is repeated; every cell above was read from the lines on either side, and each rate and threshold agrees with the Notes.
The Notes printed under the rows
Note 1 to serial number 2. In serial number 2(i), the tax shall be deducted at the time of (a) credit of rent to the account of the payee; or (b) payment, in cash or by cheque, draft or any other mode, whichever is earlier, for the last month of the tax year or the last month of tenancy. The Note fixes the time of deduction for serial number 2(i); the amount and rate are those in the row.
Note 1 to serial number 3. For the threshold limit in column D, the consideration under serial number 3(i) is the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors.
Note 2 to serial number 3. Where both serial number 3(i) and serial number 3(ii) apply to the consideration, tax is deducted under 3(ii) only.
Note 3 to serial number 3. For serial number 3(i), tax is deducted where the consideration or the stamp duty value of the property is equal to or greater than fifty lakh rupees. (This agrees with the threshold "Fifty lakh rupees and as per Note 3" in column D.)
Definitions you need (section 402)
- Rent (section 402(29)): any payment under any lease, sub-lease, tenancy or other arrangement for the use of land, building, land appurtenant to a building, machinery, plant, equipment, furniture or fittings, whether or not owned by the payee. For serial number 2(i) only payments for land, building and land appurtenant to a building are treated as rent.
- Commission or brokerage (section 402(7)): includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another, for services rendered (not being professional services), for services in buying or selling of goods, or in relation to any transaction relating to any asset, valuable article or thing, not being securities.
- Immovable property (section 402(19)): any land (other than agricultural land) or any building or part of a building.
- Consideration for transfer of immovable property (section 402(9)) includes club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee and other charges of similar nature incidental to the transfer.
For the stamp duty value, see our post on section 78.
Worked examples
Rent, serial number 2(i). Mr. Iyer (an invented name), an individual whose turnover is below the limits in section 402(37), pays rent of Rs. 60,000 a month for a shop to Mrs. Nair (invented), not a specified person. Since the rent exceeds Rs. 50,000 for a month, the rate is 2% on the entire amount, and under Note 1 the tax is deducted at the time of credit or payment for the last month of the tax year or of the tenancy. If the rent for the whole year is the amount (12 months x Rs. 60,000 = Rs. 7,20,000), the tax is 2% of Rs. 7,20,000 = Rs. 14,400.
Rent, serial number 2(ii). Orion Traders Private Limited (invented) is a specified person (a company). It pays Rs. 70,000 a month as rent for a warehouse building. Rate for use of land or building: 10%. Threshold Rs. 50,000 for a month is exceeded, so tax is deducted on the entire amount: 10% of Rs. 70,000 = Rs. 7,000 for a month's rent. If the same company pays Rs. 55,000 a month for machinery, the rate for machinery is 2%: 2% of Rs. 55,000 = Rs. 1,100 for a month.
Immovable property, serial number 3(i). Ms. Kapoor (invented) sells a flat for Rs. 80,00,000. The stamp duty value is Rs. 90,00,000. Tax is 1% of the higher figure: 1% of Rs. 90,00,000 = Rs. 90,000. Both figures are at or above fifty lakh rupees, so Note 3 is met. If the flat is sold to two buyers who pay Rs. 30,00,000 and Rs. 20,00,000, the threshold test uses the aggregate under Note 1: Rs. 50,00,000.
Compulsory acquisition, serial number 3(iii). A State agency (invented) pays Rs. 8,00,000 as compensation for compulsory acquisition of a building. The amount exceeds Rs. 5,00,000, so tax is 10% of Rs. 8,00,000 = Rs. 80,000.
Need help with TDS on rent, commission or property?
If you are not sure whether you are a specified person, which row applies to a payment, or how to treat the month-wise threshold for rent, our team can walk you through the Table. Please contact us through the page for TDS return filing.
Key takeaways
- Tax is deducted on the entire amount once the threshold is exceeded, at the earlier of credit and payment.
- Rent: Rs. 50,000 for a month or part of a month; 2% (not specified person), or 2% for machinery, plant and equipment and 10% for land, building and furniture or fittings (specified person).
- Commission or brokerage: Rs. 20,000; 2% for a specified person; insurance commission at rates in force.
- Immovable property: 1% of the higher of consideration and stamp duty value, from fifty lakh rupees; 10% on the sum in serial number 3(ii) with a Nil threshold and in serial number 3(iii) from Rs. 5,00,000.
Read next
- Section 393 on capital market income and interest (serial numbers 4 and 5)
- Section 393 on contractors, professional and technical fees and dividend (serial numbers 6 and 7)
- Section 393 on other cases (serial number 8)
- Section 393: overview
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.