TDS on Business Benefits 2026: Section 393, 10% Rate & Threshold
Updated September 2026: For TY 2026-27, qualifying benefits or perquisites arising from a resident recipient's business or profession are covered by Section 393(1), Table 8(iv) of the Income-tax Act, 2025. Old Section 194R is the legacy reference.
Current rule
- Rate: 10% where applicable.
- Threshold: ₹20,000 aggregate value during the tax year.
- Recipient: resident business/professional recipient under the statutory conditions.
- Benefit can be cash, kind or mixed.
Typical cases to review
Dealer incentives, reward products, trips, professional rewards, samples retained by recipients and other non-cash benefits require review. Ordinary pricing discounts/rebates should not automatically be treated the same as a separate incentive benefit.
In-kind benefits
Where insufficient cash exists to meet withholding, ensure the required tax is paid before release where the provision applies. Maintain recipient-wise aggregation and valuation evidence.
Finance controls
- Confirm recipient and residential status.
- Establish the business/professional nexus.
- Track annual aggregate value.
- Document valuation.
- Arrange tax before releasing qualifying in-kind benefits.
- Check PAN and certificate rules separately.
- Do not use obsolete Section 206AB non-filer logic.
Frequently asked questions
What replaced old Section 194R?
The corresponding current provision is Section 393(1), Table 8(iv).
What is the rate?
10% where the statutory conditions are met.
What is the threshold?
₹20,000 aggregate value during the tax year under the relevant item.
Can benefits in kind be covered?
Yes. The current framework addresses cash, kind and mixed benefits.
Official reference
Income Tax Department — Section 393
Last reviewed: September 2026.
More Frequently Asked Questions
What should I know about Current rule?
Rate: 10% where applicable. Threshold: ₹20,000 aggregate value during the tax year. Recipient: resident business/professional recipient under the statutory conditions. Benefit can be cash, kind or mixed.
What should I know about Typical cases to review?
Dealer incentives, reward products, trips, professional rewards, samples retained by recipients and other non-cash benefits require review. Ordinary pricing discounts/rebates should not automatically be treated the same as a separate incentive benefit.
What should I know about In-kind benefits?
Where insufficient cash exists to meet withholding, ensure the required tax is paid before release where the provision applies. Maintain recipient-wise aggregation and valuation evidence.
What should I know about Finance controls?
Confirm recipient and residential status. Establish the business/professional nexus. Track annual aggregate value. Document valuation. Arrange tax before releasing qualifying in-kind benefits. Check PAN and certificate rules separately. Do not use obsolete Section 206AB non-filer logic.
What should I know about Frequently asked questions?
What replaced old Section 194R? The corresponding current provision is Section 393(1), Table 8(iv). What is the rate? 10% where the statutory conditions are met. What is the threshold? ₹20,000 aggregate value during the tax year under the relevant item. Can benefits in kind be covered? Yes. The current framework addresses cash, kind and mixed benefits.
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