What changes first when teams open the new law.
The structure looks simpler, but the real work is operational. Teams will need clean crosswalks between the old sections, the new table references, the new forms, and the April 2026 cutover logic.
Section 393 becomes the main TDS map.
Resident payments sit in section 393(1), non-resident payments in section 393(2), and winnings, cash withdrawal, and partner payments in section 393(3).
Rates and thresholds mostly stay where people expect them.
The supplied source says rates, monetary thresholds, timelines, and interest exposure remain broadly unchanged under the new Act.
Lower or nil deduction access becomes wider.
The source highlights that lower or nil deduction certificates now expand to all TDS payment categories rather than only selected ones.
The April 2026 cutover depends on the taxable event timing.
The source states that the applicable law for TDS compliance turns on when the earlier of credit or payment happens. That means March and April transactions can sit in the same deposit month but still follow different Acts.
| Trigger point | Applicable law | Working note |
|---|---|---|
| Credit, payment, or deposit before 31 March 2026 | ITA 1961 | Legacy section quoting still applies. |
| Credit, payment, or deposit after 31 March 2026 | ITA 2025 | Use new section references and form codes. |
| Credit or payment before 31 March 2026, but deposit after 31 March 2026 | ITA 1961 | The deduction stays under the old Act even though the challan month changes. |
The new crosswalk you will keep opening.
This is the easiest way to understand the new structure quickly. The section references are cleaner, but they are no longer the familiar legacy section numbers that many teams use by reflex.
Salary TDS
Salary continues to stand separately instead of sitting inside the main TDS table.
Residents
Commission, rent, property transfer, interest, contracts, professional fees, dividend, goods, and more.
Non-residents
Sports income, concessional interest, trust distributions, fund income, bonds, GDR, and general section 195-type sums.
Any person
Lottery and gaming winnings, horse race winnings, lottery commission, cash withdrawal, NSS, and partner payments.
TCS
TCS moves out of the old 206C framing into a dedicated section with table-based references.
Definitions
Some meanings that once sat beside the section now need a separate read through the definitions provision.
Main resident payment buckets now routed through section 392 and section 393(1).
This is a condensed working table. It keeps the rate buckets that most teams actually need to cite, validate, or map inside software and client notes.
| Nature of payment | Legacy section | ITA 2025 reference | Rate |
|---|---|---|---|
| Salary | 192 | 392 | As per slab |
| PF withdrawal / accumulated balance | 192A | 392(7) | 10% |
| Insurance commission and other commission / brokerage | 194D / 194H | 393(1) - Sl. 1(i) / 1(ii) | 2% |
| Rent paid by individual / HUF over Rs. 50,000 per month | 194IB | 393(1) - Sl. 2(i) | 2% |
| General rent on land, building, plant, machinery, furniture | 194I | 393(1) - Sl. 2(ii) | 2% or 10% |
| Immovable property transfer / JDA / compulsory acquisition | 194IA / 194IC / 194LA | 393(1) - Sl. 3 | 1% / 10% / 10% |
| Interest on securities and interest other than securities | 193 / 194A | 393(1) - Sl. 5 | 10% |
| Contract payments and 194M-type payments | 194C / 194M | 393(1) - Sl. 6(i) / 6(ii) | 1% / 2% / 2% |
| Professional, technical, director fee, royalty, non-compete bucket | 194J | 393(1) - Sl. 6 | 2% or 10% |
| Dividend, life insurance proceeds, buyer TDS on goods | 194 / 194DA / 194Q | 393(1) - Sl. 7 / 8(i) / 8(ii) | 10% / 2% / 0.1% |
| Senior citizen scheme, perquisite-benefit, e-commerce, VDA | 194P / 194R / 194O / 194S | 393(1) - Sl. 8(iii) to 8(vi) | Slab / 10% / 0.1% / 1% |
Section 393(2) brings non-resident withholding into one cleaner bucket map.
The supplied source continues the familiar rate profile for most non-resident payments, while moving them into a single table-driven reference set.
| Nature of payment | Legacy section | ITA 2025 reference | Rate |
|---|---|---|---|
| Non-resident sportsman or sports association | 194E | 393(2) - Sl. 1 | 20% |
| Foreign currency borrowing / long-term infra bonds | 194LC | 393(2) - Sl. 2 | 5% |
| Rupee denominated bonds | 194LC | 393(2) - Sl. 3 | 5% |
| IFSC listed bonds or RDB issued during the notified windows | 194LC | 393(2) - Sl. 4.E(a) / 4.E(b) | 4% / 9% |
| Infrastructure debt fund interest | 194LB | 393(2) - Sl. 5 | 5% |
| Business trust distributions: interest, dividend, rent | 194LBA | 393(2) - Sl. 6 / 7 | 5% / 10% / rates in force |
| Investment fund income and securitization trust income | 194LBB / 194LBC(2) | 393(2) - Sl. 8 / 9 | Rates in force |
| MF units or specified company held by non-resident | 196A | 393(2) - Sl. 10 | 20% |
| Offshore fund units, bonds, GDR, FII and specified fund income | 196B / 196C / 196D | 393(2) - Sl. 11 to 16 | 10%, 12.5%, or 20% depending on the item |
| Any other general non-resident sum chargeable | 195 | 393(2) - Sl. 17 | Rates in force |
Do not stop at sections. Forms and TCS references move too.
If teams update only the TDS section map but miss return forms, certificates, and TCS references, they will still create confusion in operations and filing workflows.
| Legacy form | ITA 2025 form | Use |
|---|---|---|
| Form 13 | Form 128 | Lower or nil deduction application |
| Form 24Q | Form 138 | TDS return for salaries |
| Form 26Q | Form 140 | TDS return other than salaries |
| Form 27Q | Form 144 | TDS return for non-residents |
| Form 27EQ | Form 143 | TCS return |
| Form 16 / 16A / 27D | Form 130 / 131 / 133 | TDS salary, TDS non-salary, and TCS certificates |
| Form 49B and Form 15G / 15H | Form 134 / 135 and Form 121 | TAN application and non-deduction self-declaration |
Payments to any person
Lottery and gaming winnings remain at 30%, lottery commission and cash withdrawal stay at 2%, and partner payments stay at 10% in the supplied summary.
TCS now stands on its own.
The source note keeps the broad TCS architecture in place, including sale of goods categories, LRS, overseas tour packages, parking rights, and toll rights, but under new table references.
Some TCS changes appear only in ITA 2025.
The supplied note specifically says certain TCS reductions were made only in ITA 2025 and not in ITA 1961, which matters during the transition period.
What finance, payroll, and tax teams should update first.
If you only do three things before filings begin under the new regime, do these first and do them cleanly.
Update master references
Change section labels in ERP, payroll, AP, treasury, templates, and tax working papers.
Split March and April logic
Do not let April deposit month override the March trigger event for deductions still governed by ITA 1961.
Rebuild form controls
Return forms, certificates, and correction windows need the same attention as the section map.
Are TDS rates changing materially under ITA 2025?
Based on the supplied source, no broad rate reset has been highlighted. The main change is the new section mapping and related operational references.
Which law applies if I deduct in March 2026 but deposit in April 2026?
The source says ITA 1961 still applies where the earlier credit or payment event happened before 31 March 2026, even if the tax gets deposited later.
Where will TCS sit under the new law?
Under the supplied summary, TCS is moved into section 394 of the Income-tax Act, 2025.
What is the hardest operational change?
Miscoding the section references during the transition looks like the biggest practical risk, especially because correction statements become more time-bound.
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