The Income Tax Act 2025 replaced the Income Tax Act 1961 from 1st April 2026. The Act does not impose any new tax. The intent is to simplify the existing provisions, not change the tax policy.
Tax year as per the Income Tax Act 2025 will replace the existing concept of Financial Year and Assessment Year. A Tax Year is a 12 month period that begins on the 1st of April and ends on 31st March of the following year. However, for newly established business and profession, the tax year starts from the date of establishment.
There is no separate “Assessment Year” and “Previous Year” terminology anymore.
The new Act contains 536 sections and 16 schedules, compared to 819 sections and 14 schedules in the 1961 Act. The Income Tax Rules have also been reduced from 511 rules with 399 forms to 333 rules with 190 forms.
Under the 1961 Act, TDS provisions ran from Section 192 to Section 194T — more than 60 separate sections, each with its own format, thresholds, and exceptions. The 2025 Act consolidates all of this into three sections:
1. Section 392 covers salary TDS,
2. Section 393 covers TDS on non-salary income across structured tables,
3. Section 394 handles TCS.
A summary of TDS and TCS sections in comparison with old sections.
| Old Section | New Section (2025) | Code | Nature of Payment | TDS Rate | Old Threshold | New Threshold |
| 192 | Sec 392 | 1001 | Salary income | Slab rate | Basic exemption | Same |
| 192A | Sec 392 | 1002 | Premature PF withdrawal | 10% | ₹50,000 | Same |
| 193 | 393 T1(5)(i) | 1003 | Interest on securities | 10% | ₹10,000 | Same |
| 194 | 393 T1(7) | 1004 | Dividend from company | 10% | ₹10,000 | Same |
| 194A | 393 T1(5)(ii) | 1005 | Interest (bank / post office / others) | 10% | ₹50K (Sr) / ₹40K | ₹1L (Sr) / ₹50K |
| 194B | 393 T3(1) | 1025 | Lottery / prize winnings | 30% | ₹10,000 | Same |
| 194BA | 393 T3(2) | 1026 | Online gaming winnings | 30% | No limit | Same |
| 194BB | 393 T3(3) | 1027 | Horse race winnings | 30% | ₹10,000 | Same |
| 194C | 393 T1(6)(i) | 1006 | Payment to contractors / sub-contractors | 1% / 2% | ₹30K / ₹1L | Same |
| 194D | 393 T1(1)(i) | 1011 | Insurance commission | 2% | ₹15,000 | ₹20,000 |
| 194DA | 393 T1(8)(i) | — | Life insurance maturity proceeds | 2% (↓) | ₹1,00,000 | Same |
| 194E | 393 | — | Non-resident sportsmen / entertainers | 20% | No limit | Same |
| 194G | 393 T3(4) | 1028 | Commission on lottery tickets | 2% | ₹15,000 | ₹20,000 |
| 194H | 393 T1(1)(ii) | 1008 | Commission / brokerage | 2% | ₹15,000 | ₹20,000 |
| 194I(a) | 393 T1(2)(ii) | 1010 | Rent – plant & machinery | 2% | ₹2.4L (annual) | ₹50K/month |
| 194I(b) | 393 T1(2)(ii) | 1009 | Rent – land / building / furniture | 10% | ₹2.4L (annual) | ₹50K/month |
| 194IA | 393 T1(3)(i) | 1012 | Purchase of immovable property | 1% | ₹50 lakh | Same |
| 194IB | 393 T1(2)(i) | 1013 | Rent by Individual/HUF (non-audit) | 2% (↓) | ₹50K/month | Same |
| 194IC | 393 T1(3)(ii) | 1014 | Joint development agreement (monetary) | 10% | No limit | Same |
| 194J | 393 T1(6)(iii) | 1007 | Professional / technical / director fees | 10% / 2% | ₹30,000 | ₹50,000 |
| 194K | 393 T1(4)(i) | 1015 | Income from mutual funds | 10% | ₹5,000 | ₹10,000 |
| 194LA | 393 T1(3)(iii) | 1016 | Compensation for compulsory acquisition | 10% | ₹2.5L | ₹5L |
| 194LBA | 393 T1(4)(ii) | 1017 | Income from business trust (REIT/InvIT) | 10% | No limit | Same |
| 194LBB | 393 T1(4)(iii) | 1018 | Income from investment fund | 10% | No limit | Same |
| 194LBC | 393 T1(4)(iv) | 1019 | Income from securitisation trust | 10% (↓) | No limit | Same |
| 194M | 393 T1(6)(ii) | 1020 | Payment by Ind/HUF (contract/prof/ commission) | 2% | ₹50 lakh | Same |
| 194N | 393 T3(5) | 1029 | Cash withdrawals | 2% | ₹1Cr / ₹3Cr | Same |
| 194O | 393 T1(8)(v) | 1023 | E-commerce transactions | 0.1% (↓) | ₹5 lakh | Same |
| 194P | 393 T1(8)(iii) | — | Senior citizens (75+) – bank TDS | Slab | As per slab | Same |
| 194Q | 393 T1(8)(ii) | 1021 | Purchase of goods | 0.1% | ₹50 lakh | Same |
| 194R | 393 T1(8)(iv) | 1022 | Benefits / perquisites (business/profession) | 10% | ₹20,000 | Same |
| 194S | 393 T1(8)(vi) | 1024 | Virtual digital assets (crypto/NFT) | 1% | ₹50K / ₹10K | Same |
| 194T | 393 T3(7) | 1030 | Partner remuneration (salary/interest etc.) | 10% | ₹20,000 | Same |
TDS Filing forms name also changed please refer the table below
| New Form (2026) | Replaces Old Form | Purpose / Nature of Filing |
| Form 138 | Form 24Q | TDS return for salary, pension, and specified senior citizen income |
| Form 140 | Form 26Q | TDS return for non-salary payments (resident) – professional fees, commission, brokerage, rent, etc. |
| Form 141 | 26QB, 26QC, 26QD, 26QE | Consolidated challan-cum-statement for specific transactions (see schedules below) |
| Form 144 | Form 27Q | TDS return for non-resident payments (non-salary) |
| Form 130 | Form 16 | TDS certificate for salary (issued to employees) |
| Form 168 | Form 26AS | Annual tax statement (tax credit summary) |
Form 141 – Schedule wise breakdown
| Schedule | Purpose | Old Form Replaced |
| Schedule A | Rent paid by Individual / HUF | Form 26QC |
| Schedule B | Purchase of immovable property | Form 26QB |
| Schedule C | Payment to contractor / professional by Ind/HUF | Form 26QD |
| Schedule D | Transfer of Virtual Digital Assets (Crypto) | Form 26QE |
How to pay TDS under Income Tax Act 2025?
- Login to income tax portal using TAN as user ID.
- Navigate to “e-File” → “e-Pay Tax”.
- Select Applicable Income Tax Act that is Income Tax Act 2025 and click “continue”
- Click on “New Payment”
- Select “Tax Year” that is 2026-27 from dropdown
- Then select proceed under “Pay TDS/TCS” tab
- Select “Tax Applicable (Major Head) that is Other than Company Deductee(s) – Income Tax (Other than Companies) (0021) or “Company Deductee(s) – Corporation Tax (0020)” as applicable.
- Select Residential status of deductee that is “Residential deductee” or “Non residential deductee”
- Afer that click on continue , “TDS/TCS Section-Wise Payment Details” window will open
- Select the applicable “description” from the dropdown menu. Based on that section and section code will auto populated.
- Enter tax amount that is to be remitted.
- After that click on add button displayed.
Kindly note here you can add multiple line item and do the payment in a single transaction.
- Enter details of other payments like interest, late fee etc if any
- Click on continue that will carry you to verification window
- Verify the details that you have entered in previously
- If everything seems good, please click on continue it will take you to the payment gateway, otherwise click on back button and do the necessary changes.
- Do the payment as before and download the challan from payment history for future reference.
The Income-tax Act, 2025 marks a significant step towards modernizing and simplifying India’s tax framework, particularly in the area of TDS and TCS compliance. By consolidating multiple sections into a structured format and reducing the number of forms, the Act enhances clarity, efficiency, and ease of compliance.
While the rates, thresholds, and fundamental principles of TDS remain largely unchanged, the shift to standardized sections, codes, and forms requires taxpayers and professionals to familiarize themselves with the new system.
Overall, the new framework is expected to reduce compliance burden, minimize errors, and improve transparency, making tax administration more efficient and user-friendly.
FAQ by Income tax Department: https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/tds-compliance
Author Bio
