A TFT substrate and the manufacturing method thereof are disclosed. The method includes: providing a substrate; forming a gate electrode on the substrate; forming a first insulation layer and an active layer on the gate electrode in turn; forming a first black matrix on the active layer; forming a source electrode and a drain electrode on the first black matrix; forming a second insulation layer on the source electrode and the drain electrode; and forming a pixel electrode on the second insulation layer. The pixel electrode is electrically connected to the source electrode or the drain electrode via the second insulation layer. In this way, the masking effect of the display panel assembled by the TFT substrate can be ensured. In addition, the coupling capacitance between the data line and the scanning line may be reduced.