TDS on outdoor advertising under the Income-tax Act, 2025

This guide describes common practice and our reading of public commentary on the new Act. It is not tax advice. Tax rules change and depend on your facts. Confirm the sections, rates, thresholds and form numbers with your chartered accountant before you rely on them.

What changed on 1 April 2026

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 for payments made or credited on or after 1 April 2026. Most non-salary TDS sections from the old Act, including 194C, 194-I, 194J and 194H, now sit in one section: section 393. Salary TDS has its own section (392) (ClearTax).

Section 393 is split by who you pay (India Briefing):

Sub-section	Covers
393(1)	Payments to residents, set out in a numbered table
393(2)	Payments to non-residents
393(3)	Special cases that apply to any payee

Each kind of payment is now a serial number in the table, not a separate section. Challans and TDS returns use a four-digit payment code for each entry.

Transition. If a payment was made or credited up to 31 March 2026, the 1961 Act still applies, even when the contract runs past that date. Payments or credits from 1 April 2026 fall under section 393 (India Briefing).

Old sections to new: the entries that matter for outdoor media

The table below is based on secondary sources, mainly TaxGarden and TDSMAN. We have not checked it against the gazetted text.

Payment	1961 Act	Income-tax Act, 2025 (as reported)	Payment code	Rate	Threshold
Advertising contract, payee an individual or HUF	194C	393(1), Sl. 6(i)	1023	1%	₹30,000 single payment or ₹1,00,000 in the year
Advertising contract, any other payee	194C	393(1), Sl. 6(i)	1024	2%	₹30,000 single payment or ₹1,00,000 in the year
Rent for land, building, furniture	194-I(b)	393(1), Sl. 2(ii)	1009	10%	₹50,000 a month or part of a month
Rent for plant, machinery, equipment	194-I(a)	393(1), Sl. 2(ii)	1008	2%	₹50,000 a month or part of a month
Rent paid by an individual or HUF not under tax audit	194-IB	393(1), Sl. 2(i)	—	2%	₹50,000 a month
Professional services	194J(b)	393(1), Sl. 6(iii)	1027	10%	₹50,000
Technical services	194J(a)	393(1), Sl. 6(iii)	1026	2%	₹50,000

If the payee has not given a PAN, the higher no-PAN rate applies. For contractor payments, sources give that rate as 20% (TDSMAN).

Sources number the sub-entries differently. One places rent at Sl. 2(ii) with sub-items D(a) and D(b). Another splits it by who pays. Use the serial numbers only as a guide. Your accountant’s software will pick the right payment code.

TDS your clients deduct from you

When a client or agency pays your invoice for display on a hoarding, they usually treat it as an advertising contract. Under the old Act that meant section 194C. A 1995 CBDT circular said a contract to put up a hoarding is an advertising contract and falls under 194C (CBDT Circular 715, as summarised by VJM Global). Under the new Act, “work” in the contractor entry still includes advertising (TDSMAN).

What this means in practice:

• A company or firm is deducted at 2%, and an individual or HUF at 1%.
• TDS is usually worked out on the amount before GST when GST is shown separately on the invoice. Confirm the treatment with your accountant.
• Each payment has three figures: gross, TDS and net. The net amount reaches your bank. You claim the TDS against your own tax once it appears in your credit statement.

The sub-letting exception. The same circular says that if a party rents a space and sub-lets it for a hoarding, the payment is rent (194-I), not a contract payment. A Mumbai tribunal applied this in Percept Ltd. The company had not acquired and sub-let the space, so 194C applied (The Tax Talk). Some clients therefore deduct 10% as rent instead of 1% or 2%. If that happens, check with your accountant which treatment fits your contract.

Uncertain: we have not found official confirmation that Circular 715 still applies under the 2025 Act. Its reasoning is widely cited, but ask your CA.

TDS you deduct on site rent

If you lease walls, rooftops or plots for hoardings, the rent you pay landlords is generally rent for land or building:

• 10% once the rent is more than ₹50,000 for a month or part of a month, when you are a company, a firm, an LLP or an individual or HUF under tax audit (TaxGST.in).
• 2% for individuals and HUFs not under audit, on rent above ₹50,000 a month (the old 194-IB) (TaxGST.in).
• GST shown separately on the landlord’s invoice is generally left out when working out TDS. A refundable security deposit is not treated as rent (TaxGST.in).

The threshold is per month. A ₹40,000-a-month site has no rent TDS, even though it costs ₹4.8 lakh a year. A ₹60,000-a-month site does. Many small landlords fall below the threshold. Large municipal or private sites usually do not.

Rent paid in advance for a whole year counts too. Ask your accountant how the monthly threshold applies to lump-sum or quarterly rent.

TDS on printers, mounters and designers

• Printing and mounting done to your order are usually contractor payments: 1% or 2% above the contractor thresholds.
• Creative or design fees may count as professional services (10%, above ₹50,000). Whether a design job is a contract or a professional fee depends on the facts. This is a common point of disagreement, so agree the treatment with your CA.

Forms and credit tracking

Form numbers changed with the Income-tax Rules, 2026. Commentary reports this mapping (SKLA, IndiaFilings, TaxGarden):

Purpose	Old form	New form (as reported)
Quarterly non-salary TDS return (residents)	26Q	140
TDS certificate to the payee	16A	131
Annual tax credit statement	26AS	168

Returns and certificates for tax deducted up to 31 March 2026 stay on the old forms. Some early articles disagreed on these numbers, so check the notified Rules on the income-tax portal before you file.

Whatever the form is called, the job is the same. Match every rupee of TDS on your invoices to your annual tax credit statement and to the AIS on the compliance portal. TDS that a client deducted but never deposited or reported does not reach your credit, and you cannot claim it.

Tracking it per invoice

A simple routine that works:

1. Record TDS with every payment. Log the gross, TDS and net amounts against the invoice they settle, not as one lump per client.
2. Keep a TDS-pending list. Each line shows the client, invoice, amount and quarter.
3. Check the credit statement each quarter, after the client’s return is due. Tick off what has appeared.
4. Chase what is missing. Send the client the invoice number, payment date and amount. Ask for the TDS certificate (Form 131 from April 2026, or 16A for earlier deductions).
5. On the payable side, keep the landlord’s PAN and monthly rent on the site record. You can then tell at a glance which rents cross ₹50,000 a month.

The usual failures are not about rates. They are TDS that nobody followed up, a client who quoted the wrong PAN, or a deduction under the wrong entry. Tracking per invoice catches all three.

What we are not sure about

• The serial numbers within section 393 differ between sources. The rates and thresholds agree.
• We have not found official confirmation that Circular 715 still applies under the 2025 Act.
• Whether design fees count as a contract or a professional fee depends on the facts.
• The new form numbers come from secondary commentary, not the gazette text.