New TDS Payment Codes FY 2026-27 Mapped to Old Sections

If you deducted TDS in April 2026 using Section 194C on your challan, your return is defective. This is the single biggest compliance trap facing accountants this quarter, and it is catching out both finance teams and mid-tier software still serving old dropdowns.

This guide gives you the cross-reference table, the Q4 transition rule, and the step-by-step for generating a clean challan under the new system.

Why TDS Codes Changed

The Income Tax Act 2025, effective April 1, 2026, did not just renumber a few sections. It collapsed the entire sprawling Section 192 to 194T structure of the 1961 Act into three parent sections:

• Section 392 covers TDS on salaries (replacing old Section 192).
• Section 393 covers every non-salary TDS payment to residents, non-residents, and "any person" (replacing 194A, 194C, 194H, 194I, 194J, 194K, 194N, 194Q, 194R, 194S, and every other 194-series provision).
• Section 394 covers Tax Collection at Source (replacing old Section 206C).

Instead of naming each payment type by section, the new Act assigns each payment a numeric code in a structured range. There are 92 codes in total: 42 for resident TDS, 19 for non-resident TDS, and 25 for TCS (with a small number of inferred codes awaiting formal notification).

Code Ranges at a Glance

Cross-Reference Table: Old Sections to New Codes

The table below covers the 12 most frequent payments where accountants need to act this week. Rates are as notified for FY 2026-27 and carry forward most 1961 Act thresholds.

Caveat on inferred codes: codes 1007, 1010, 1025, and 1036 appear in the sequence of draft Form 140 entries but have not been individually notified by CBDT as of April 2026. If your transaction maps to any of these, wait for the official notification or escalate to your tax consultant rather than guessing.

The Q4 FY 2025-26 Transition Rule

This is where most accountants are tripping. The trigger for applying the old Act versus the new Act is not the date you deposit TDS. It is the earlier of the credit event (when you credit the payee in your books) and the payment event (when you actually pay).

• Earlier event on or before March 31, 2026: the 1961 Act applies. Use the old section numbers on the challan, even if you deposit the TDS in April 2026. File the corresponding TDS return on the old Form 24Q, 140, 27Q, or 27EQ.
• Earlier event on or after April 1, 2026: the 2025 Act applies. Use the new numeric code. File the corresponding return on the new Form 138, 140, 143, or 144.

Worked case: You credited a contractor Rs. 5 lakh in your books on March 28, 2026 and actually paid on April 5, 2026. The earlier event is March 28. This is an old-Act transaction. Use Section 194C on the challan even though the deposit happens in April, and report it on Form 140 for Q4 FY 2025-26.

A second case: You credited and paid an architect Rs. 1 lakh on April 4, 2026. Both events are post-April 1. Use code 1027 under Section 393 1) on the challan, and report on Form 140 for Q1 FY 2026-27.

Mixing old and new Act transactions on a single challan will fail validation. Keep the two streams separate at the challan level.

How to Generate a Challan Under the New System

Log into incometax.gov.in/iec/foportal/, then navigate to e-File > e-Pay Tax.

1. Click New Payment.
2. Select Income Tax Act, 2025 (the portal now shows both Acts; picking 1961 is correct only for old-Act transactions).
3. Choose the parent section: 392, 393, or 394.
4. From the dropdown, pick the specific payment code that matches your transaction. The portal shows the code number, the old-section equivalent in brackets, and the applicable rate.
5. Enter the deductee PAN, the amount paid or credited, the TDS amount, and the deduction date.
6. Pay via net banking, NEFT/RTGS, debit card, or UPI and save the challan.

The BSR code and challan serial number from the receipt are what you later quote in Form 138 / 140 / 143 / 144 when filing the quarterly return.

Form Changes You Cannot Skip

Most accounting and payroll software is still updating code libraries and form templates through April and May 2026. If your vendor has not shipped an update, do not file on old forms as a workaround. The correct fallback is the income tax portal's native utility, which is live with the new codes.

Common Mistakes to Avoid

• Using old section numbers on new-Act transactions. Any post-April-1 transaction filed with 194C or 194J on the challan will be treated as a defective return and will block the payee's 26AS credit.
• Mixing old and new Act transactions on one challan. Generate separate challans for pre-April and post-April transactions.
• Using inferred codes 1007, 1010, 1025, 1036) without notification. Wait for the CBDT notification or escalate to your consultant.
• Filing Form 140 for Q1 FY 2026-27. Form 140 is for old-Act transactions only. For Q1 FY 2026-27, use Form 140.
• Wrong form for non-resident payments. Non-resident TDS is now Form 144, not Form 140. Codes 1039 to 1057 are non-resident specific.
• Forgetting to issue the new-format certificate. A deductee whose tax was deducted under the 2025 Act is entitled to Form 139 (salary) or Form 141 (non-salary), not old Form 16 / 16A.

Let Tax Garden Handle the Code Mapping

Across a mid-size SME with 50 to 200 vendor payments a month, manually mapping each payment to the correct code, generating the right challan, and filing on the right form creates a single-point-of-failure for vendor 26AS credits across the year.

Explore Tax Garden's Compliance Standard plan. We prepare your challans with the correct new-Act codes, file Form 138 / 140 / 143 / 144 every quarter on time, and reconcile each payee's 26AS so a wrong code never becomes a notice.

This guide is current as of April 15, 2026 and reflects the Income Tax Act 2025 effective April 1, 2026. Code mappings, parent sections 392, 393, 394), form numbers 138, 140, 143, 144), and the credit-versus-payment transition rule have been verified against the Income Tax Department tax-payments portal (incometax.gov.in/iec/foportal/), CBDT TDS compliance guidance, and published analysis from ClearTax, TaxRoutine, FutureX Solutions, and CAclubindia. Inferred codes 1007, 1010, 1025, 1036) are flagged until CBDT issues formal notification. Confirm individual mappings on the e-Pay Tax portal before generating a live challan.