We have royalty on sales from restaurant. We pay royalty to OPC. Earlier in IT act-1961, we used to pay at 10% under 194J. Now there are two code 1026 & 1027. So this scenario where it falls.
In new income tax act-2025, which code i have to use either 1026 or 1027 code.
For paying franchise or brand royalty for a restaurant to an OPC under the Income-Tax Act, 2025, you must use Code 1027 (TDS rate of 10% under Section 393(1) [Table: Sl. No. 6(iii).D(b)]). Code 1026 is reserved for Fees for Technical Services (FTS) and cinematographic film royalties, which carry a lower TDS rate of 2%.
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