TDS under the Income-tax Act 2025: new section, new forms, same rates

From 1 April 2026 the Income-tax Act 2025 replaces the 1961 Act. Rates of tax deduction at source are unchanged, but the sections and form numbers are not. For a deductor, the risk this year is not under-deduction; it is quoting the wrong section or filing on the wrong form.

What moved

The many TDS sections of the 1961 Act (192, 194C, 194J, 194I and the rest) are consolidated into Section 393 of the new Act, with the nature of payment identified within it. Returns and statements move to renumbered forms. Published mappings pair Form 138 with the old 24Q (salary), Form 140 with 26Q (other resident payments), Form 144 with 27Q (non-residents) and Form 143 with 27EQ (TCS). Challan ITNS 281 continues for deposits.

Rates, thresholds and due dates are, as far as published guidance indicates, unchanged: deposit by the 7th of the following month (30 April for March), quarterly statements by 31 July, 31 October, 31 January and 31 May.

What a deductor should check now

Section codes in the accounting and payroll software: payments must be mapped to the Section 393 nature-of-payment codes. Vendor master: nature of payment and PAN status recorded per vendor. Certificates: Form 16 and 16A equivalents issued under the new numbering. Quarterly statements: confirm with your filing utility which form applies to the quarter being filed, since the transition quarter is where errors cluster.

A mismatch between the section quoted in the challan and the statement is the most common defect flagged by the processing centre, and it is entirely avoidable with a one-time mapping exercise.

What has not changed

The commercial logic. Deduct at the right rate when crediting or paying, whichever is earlier; deposit by the 7th; file quarterly; issue certificates. Interest for late deduction and late deposit continues, as does disallowance of the expense where TDS is not deducted or deposited.

A note on this article

Form numbers and transition rules are drawn from published practitioner mappings and secondary sources; the Income-tax Rules, 2026 and CBDT notifications are authoritative. We confirm the applicable form for each quarter before filing and recommend every deductor do the same.