TDS UNDER THE INCOME-TAX ACT, 2025

November 03, 2026

Key Provisions, Sectional Changes & Compliance Updates Effective from 1 April 2026.

1. Overview

The Income-tax Act, 2025 introduces a reorganized framework for Tax Deducted at Source (TDS). Rather than substantially changing the underlying TDS policy, the new Act consolidates and presents TDS provisions in a simplified, tabular structure.

2. Section 392 – TDS on Salary

Section 392 of the Income-tax Act, 2025 contains the provisions relating to deduction of tax at source from income chargeable under the head “Salaries.”

Major Salary-TDS Compliance Forms

Purpose	New Form Number	Earlier Form Number	Mandatory Due Dates
Quarterly Salary TDS Statement	Form No. 138	Form 24Q	Next month 31 from the end of quarter
Salary TDS Certificate	Form No. 130	Form 16	June 15 following the end of the financial year.
Employee Particulars/Claims for TDS Computation	Form No. 12BB / Prescribed Framework	Form 12BB	Submitted by employee to employer before year-end payroll processing (set by employer internal policy).

3. Section 393 – Other than Salary

Section 393 is one of the most important provisions for businesses because it covers TDS on a wide range of payments other than salary.

Compliance Due Dates

Monthly TDS Deposit: On or before the 7th of the following month (except March, which is due by April 30th).
Quarterly TDS Statements (Form 140):

Q1 (Apr–Jun): July 31st
Q2 (Jul–Sep): October 31st
Q3 (Oct–Dec): January 31st
Q4 (Jan–Mar): May 31st

4. MAJOR FORM COMPLIANCES

Form Code	Purpose / Description	Applicable Transactions / Payees	Statutory Due Date / Timeline
Form 140	Quarterly TDS Statement (Regular Returns)	Filed by regular deductors (businesses, corporates, firms) reporting non-salary deductions under Section 393 (e.g., rent, contractor fees, professional fees, interest).	Next month 31 after completion of quarter.
Form 141	Challan-cum-Statement (Unified Statement)	Used for specific single-event or localized deductions where quarterly filing is cumbersome—such as property purchases (TDS on sale of immovable property), high-value rent, or professional fees paid by specified Individuals and HUFs.	Within 30 days from the end of the month in which the deduction was made
Form 131	TDS Certificate for Non-Salary Payments	Issued by the deductor to the payee/vendor as official proof of tax deducted and deposited for payments covered under Section 393 (contractors, rent, commission, professional fees, etc.).	Within 15 days from the due date of filing the respective quarterly TDS return (Form 140).
Form 132	TDS Certificate for Property Transactions	Issued specifically to the seller of immovable property by the buyer after depositing TDS via Form 141.	Within 15 days from the due date of filing Form 141.
Form 130	Application for Lower / Nil TDS Deduction Certificate	Filed electronically by taxpayers (vendors/payees) to the Assessing Officer (AO) to request a lower or zero TDS deduction rate if their estimated annual income warrants it	Filed prior to receiving payments; valid for the specific Tax Year upon approval.

For more information on applicable tds rates read this article

5. Penalties & correction Deadlines

Nature of Default / Non-Compliance	Relevant Provision	Statutory Penalty / Interest Rate
Delayed Deduction of TDS	Interest under Sec 398	1% per month (or part of a month) from the date tax was deductible to the actual date of deduction.
Delayed Deposit of TDS (Post-Deduction)	Interest under Sec 398	1.5% per month (or part of a month) from the date of deduction to the actual date of deposit.
Late Filing of Quarterly Return (Form 140 / 141)	Late Fee	₹200 per day of delay until the return is filed (capped at the total TDS amount due).
Failure to File / Wrongful Filing Penalty	Penalty for Non-Filing	Discretionary penalty ranging from ₹10,000 to ₹1,00,000 for extended non-filing defaults.
Failure to Provide PAN / Aadhaar	Higher Deduction Rate	Tax is mandated to be deducted at 20% (or the higher specified rate) if a valid PAN is not provided.
Business Expense Disallowance	Business Tax Disallowance	30% of payments made to resident payees are disallowed as deductible business expenses if TDS is omitted or not deposited on time.

For restrictions on time limit on TDS return revision read this article

8. FORM 145 & 146

Form 145 (Online Remittance Declaration): A mandatory electronic form filed by the remitter on the e-filing portal to furnish information regarding payments made to a non-resident or foreign company before remitting funds outside India. It includes four parts (Parts A, B, C, and D) depending on the taxability and threshold limits of the remittance

Form 146 (CA Certificate): A mandatory electronic form filed by the remitter on the e-filing portal to furnish information regarding payments made to a non-resident or foreign company before remitting funds outside India. It includes four parts (Parts A, B, C, and D) depending on the taxability and threshold limits of the remittance

For more information on foreign remittance read this article

Disclaimer: This newsletter is for general informational purposes only and should not be construed as professional or legal advice. Refer to the applicable Act, Rules, Finance Act, notifications, circulars and official guidance before taking compliance decisions

Author:
Achuta Jahnavi

Prepared On:
03/11/2026

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TDS UNDER THE INCOME-TAX ACT, 2025

Key Provisions, Sectional Changes & Compliance Updates Effective from 1 April 2026.

1. Overview

2. Section 392 – TDS on Salary

3. Section 393 – Other than Salary

4. MAJOR FORM COMPLIANCES

5. Penalties & correction Deadlines

8. FORM 145 & 146

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