From 1 April 2026, the Income-tax Act, 2025 and the Income-tax Rules, 2026 take over from the 1961 Act and the 1962 Rules. For TDS and TCS, the deduction logic, rates and broad obligations carry forward largely intact. What changes, and what will actually trip up a busy accounts team, is the renumbering: new form numbers, new section references, and a date-based switch that decides which Act a given transaction sits under. Get the cut-off wrong and a return either bounces on the portal or goes out on the wrong form.
Which Act applies, and from when
The test is the earlier of credit or payment. If that date falls on or before 31 March 2026, the transaction stays under the 1961 Act, with the old forms and old section codes. If it falls on or after 1 April 2026, the 2025 Act applies.
The practical consequence catches people out. Q4 of FY 2025-26 covers January to March 2026, so the entire quarter sits before the cut-off. Those returns are filed on the old Form 24Q and 26Q with old section numbers even when you file them in May 2026. The new forms begin only with the first quarter of Tax Year 2026-27, that is April to June 2026. Filing a Q4 FY 2025-26 return on a new form number would be incorrect.
One terminology shift rides along with this: the Act replaces “Assessment Year” and “Previous Year” with a single Tax Year, which equals the financial year. It does not change how tax is computed, but every system, return and certificate needs to reference Tax Year from April 2026 onward.
The form renumbering
The quarterly return structure is unchanged. Only the numbers move.
| Old form (1961 Act) | New form (2025 Act) | Purpose |
| Form 24Q | Form 138 | Quarterly TDS on salary |
| Form 26Q | Form 140 | Quarterly TDS on non-salary payments to residents |
| Form 27Q | Form 144 | Quarterly TDS on payments to non-residents |
| Form 27EQ | Form 143 | Quarterly TCS statement |
| Form 26QB / 26QC / 26QD / 26QE | Form 141 | Consolidated PAN-based challan-cum-statements, with separate schedules |
Certificates and declarations are renumbered too:
| Old form | New form | Purpose |
| Form 16 | Form 130 | Salary TDS certificate (also covers specified senior-citizen cases) |
| Form 16A | Form 131 | Non-salary TDS certificate |
| Form 16B / 16C / 16D / 16E | Form 132 | Certificates for property, rent, contractual and similar PAN-based TDS |
| Form 27D | Form 133 | TCS certificate |
| Form 15G / 15H | Form 121 | Self-declaration for nil deduction |
| Form 13 | Form 128 | Application for a lower or nil deduction certificate |
| Form 15CA / 15CB | Form 145 / 146 | Foreign-remittance declaration and accountant’s certificate |
| Form 26AS | Form 168 | Annual tax/information statement |
Mapping the sections
The TDS and TCS provisions are reorganised into a compact cluster. The mapping that matters for day-to-day work:
| Section (2025 Act) | Deals with |
| 392 | TDS on salary |
| 393 | TDS on non-salary payments (residents and non-residents); 393(6) covers the Form 121 declaration |
| 394 | Tax collected at source |
| 395 | Certificates, and lower or nil deduction |
| 397 | Returns and reporting; 397(3)(b) for the quarterly statements |
Late-filing consequences move as well. For old-period statements, Section 234E (fee) and 271H (penalty) still apply. For statements under the 2025 Act, the references are Section 427 for the late fee and Sections 461 and 465 for penal proceedings.
It is not only renumbering
The line that the change is purely cosmetic is half right. Most of it is realignment, but a few items are substantive and worth your attention.
The tax audit report is the big one. Form 3CD is now folded into Form 26, and the TDS/TCS disclosure has shifted from the old Clause 34 into dedicated clauses with a schedule. The successor to Clause 34(b) no longer accepts a Yes/No on unreported transactions; it asks for the exact count of transactions not reported and the rupee amount involved. That cannot be reconstructed in a year-end scramble, so the count has to be tracked through the year from April 2026.
A handful of other changes: a resident buyer purchasing immovable property from a non-resident seller now deducts using PAN, without separately obtaining a TAN. CBDT guidelines are now statutorily binding on deductors under Section 400(2), so circulars on items such as perquisites and virtual digital assets carry mandatory weight. TCS rates are rationalised to a flat 2% on several categories, including overseas tour packages, removing the earlier slabs. And the correction-statement window is cut to two years from the end of the year in which the original statement was due.
Deposit and due dates
These hold steady. TDS deducted in a month is generally due by the 7th of the following month, and March deductions under the old Act are due by 30 April 2026. The quarterly filing cycle stays at 31 July, 31 October, 31 January and 31 May, but the form number depends on which side of 1 April 2026 the transaction falls.
What teams should do now
Update payroll, accounts and ERP masters with the new form numbers, section codes and FVU codes before the first Tax Year 2026-27 return, since old codes on a new-year return will throw validation errors. Keep a clean record of credit and payment dates for anything straddling the transition, so the applicable Act is never in doubt. Build the unreported-transaction count into the monthly TDS routine rather than leaving it for audit. Revise certificate templates, client advisories and internal checklists to the new references. And confirm the final notified rule schema on the e-filing portal before filing, as utilities were still settling during the changeover.
References
| Instrument | Relevance |
| Income-tax Act, 2025 (effective 1 April 2026) | New TDS/TCS provisions; Sections 392–397, 400(2), 427, 461, 465 |
| Income-tax Rules, 2026 | Renumbered forms replacing the Income-tax Rules, 1962 |
| Income-tax Act, 1961 and Rules, 1962 | Continue to govern transactions up to 31 March 2026 |
| CBDT transition FAQs and the Department’s form list | Old-to-new form mapping and section references |
| TRACES portal | Filing, corrections, certificate generation and compliance tracking |
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Disclaimer: This article is for general information and educational purposes only and reflects the position as understood on the date of writing. The Income-tax Rules, 2026, form utilities and portal schema were still being finalised around the transition, and some references may be updated subsequently. Nothing here is legal, financial or professional advice, nor an invitation or solicitation for any service. Readers should verify the current position on the income-tax e-filing portal and seek advice specific to their own circumstances before acting.
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