My challan and return now ask for a 'payment code' — what is it?

Question

tdsguru.in (CA firm) · Accepted Answer

It is the numeric code (1001–1067) under Section 393 that identifies the nature of the payment, replacing reliance on the old section number alone. The Income-tax Act 2025 assigns each nature of TDS payment a numeric code in the Section 393 table. For example, contractor payments map to code 1023/1024. You select the correct code when generating the TDS challan and when entering deductions in the return. Using the right code matters — a wrong code can cause a mismatch or default even if the rate and amount are correct. The old-to-new section and code mapping page lists every code.