Summary: The Income Tax Department has introduced a new TDS payment functionality on the Income Tax Portal effective from 1 April 2026 under the Income Tax Act, 2025. The biggest reform is the “Single Challan” facility, which allows taxpayers to pay TDS for multiple sections through one consolidated challan instead of filing separate challans for each deduction category. Earlier, taxpayers had to complete repetitive data entry and OTP verification for every section separately. Although the new framework replaces familiar provisions like Sections 194C and 194J with codes linked to Section 393 schedules, the system aims to simplify compliance by grouping similar payments together. Taxpayers must carefully select “Income Tax Act 2025” while making payments to avoid incorrect challans and compliance issues. Key TDS codes include salary payments under Code 1002, rent under Code 1009 at 10%, contract payments under Code 1023 at 1%, and purchase of goods under Code 1031 at 0.1%.
Arjuna (Fictional Character): Krishna, taxpayers are worried that making TDS payments will become more tedious now. Is it actually getting easier or more difficult?
Krishna (Fictional Character): Arjuna, from 1st April 2026 the department had enabled new functionality for making TDS payments on the Income tax portal. In this government has introduced an option to make payments of multiple sections in a single challan.
Arjuna (Fictional Character): Krishna, what is the biggest relief for a taxpayer who has to pay TDS under multiple heads at once?
Krishna (Fictional Character): Arjuna, the “Single Challan” facility is a major shift toward efficiency. Under the old 1961 Act, a taxpayer often had to file separate challans for different sections, which meant dealing with multiple OTP verifications and repetitive data entry for each payment. The 2025 Act now allows a taxpayer to combine multiple section codes into one single combined payment. For example, a business can now pay for both contract services and professional fees in one go, which reduces paperwork and saves significant time.
Arjuna (Fictional Character): Krishna, but many are confused because the old sections were so easy to remember. Now there are complex references like Section 393 schedule serial numbers. Isn’t that making it harder for a taxpayer?
Krishna (Fictional Character): Arjuna, Earlier, there were distinct sections like 194C or 194J which were easy to identify while making payments. Now, most resident payments are clubbed under Section 393(1) with different serial numbers and schedules. While this new structure creates initial confusion, it actually groups similar payments together. For Tax Year 2026-27, a taxpayer must strictly select “Income Tax Act 2025” on the portal to access these new codes, which range from 1001 to 1092. Selecting the old Act for new payments will lead to incorrect challans and non-compliance.
Arjuna (Fictional Character): Krishna, what are some common rates taxpayers should keep in mind to avoid getting lost in this new complexity?
Krishna (Fictional Character): Arjuna, For common payments like non-government salaries under Code 1002, the tax remains as per slab rates. Rent on buildings under Code 1009 attracts a 10% rate , while contract payments for an individual taxpayer under Code 1023 are kept at 1%. Professional fees in the 10% category now fall under Codes 1027 or 1028, and the purchase of goods remains at 0.1% under Code 1031.
Arjuna (Fictional Character): Krishna, what should taxpayers learn from this?
Krishna (Fictional Character): Arjuna, while the structure has changed from simple sections to detailed schedules, the basic principles of compliance remain the same. A taxpayer should focus on the future and keep a reference guide nearby that compares the old 1961 Act sections with the new 2025 Act codes to avoid mistakes during payment. Trust the transition, update systems to the new 2025 codes, and remember that staying updated is the best way to ensure compliance is easy rather than tedious!
Author Bio
