Section 194C under the
Income-tax Act, 2025
TDS on payments to contractors / sub-contractors
Topic
TDS on payments to contractors / sub-contractors — TDS provisions under the Income-tax Act, 2025 (Act 30 of 2025).
What carried over
The substance of this provision was not changed by the re-write. What moved is the citation.
Rates unchanged: 1% where the contractor is an individual/HUF, 2% otherwise; thresholds Rs 30,000 per single sum and Rs 1,00,000 in aggregate. The old 194C(4) individual/HUF payer route (Rs 50 lakh, 2%) is now Sl. No. 6(ii)(a) — which also absorbs old s.194M. Definition of 'work' now sits in s.402(47)(e).
Source
Verified against bare text of s.393(1) Table Sl. No. 6 in ICAI publication; corroborated by toolisky.com ('194C -> 393(1) Sl. 6(i)').
CBDT publishes its own correspondence utility on incometaxindia.gov.in and that is the authority. Spot-check anything high-stakes there before you rely on it.
Frequently asked
What replaces Section 194C from 1 April 2026?
Section 393(1) of the Income-tax Act, 2025, Table Sl. No. 6(i). Where the payer is an individual or HUF, the entry is Sl. No. 6(ii)(a), which also absorbs the old Section 194M. There is no standalone section numbered 194C in the new Act — you cite the table serial.
Do contractor TDS rates and thresholds change?
No. 1% where the contractor is an individual or HUF and 2% otherwise, with thresholds of Rs 30,000 per single sum and Rs 1,00,000 in aggregate, all carry over unchanged. Only the citation changes.
Where is the definition of 'work' now?
Section 402(47)(e) of the Income-tax Act, 2025.
This is a navigational aid for the 1961 → 2025 transition, not tax advice. It helps you find the right place in the new Act when you already know the old section. Confirm every citation against the bare Act and against CBDT's own correspondence utility before relying on it in a return, certificate, notice reply or opinion. The source text used here is the Act as passed, so any rate or threshold amended by the Finance Act, 2026 is not reflected; section numbers are unaffected.