Paying a Non Resident? Complete Guide to TDS Rules 2026

If you are making payment to NRI or foreign company, TDS rules changed from April 2026. Section name updated and compliance process modified. Understanding correct tax rate helps avoid penalty and notices.

1. Section Name Change in 2026

Earlier TDS on payment to non resident was covered under Section 195. Under Income Tax Act 2025, new section is Section 393(2). Wrong section mention may create compliance issue.

2. TDS Rate Chart for Non Resident

3. Example for Better Understanding

4. DTAA Benefit (How to Reduce Tax)

Double Tax Avoidance Agreement allows lower TDS rate. NRI must provide documents to claim benefit.

• Tax Residency Certificate
• Form 10F
• PAN Card

5. Property Purchase Rule Change 2026

From October 2026, buyer may use PAN instead of TAN for TDS payment. This simplifies compliance process.

• No need to apply TAN
• Faster compliance
• Less paperwork

6. Common Mistakes to Avoid

• Wrong section reference
• Late TDS payment
• Incorrect form selection
• No PAN available
• Not checking DTAA benefit

7. FAQ