Compliance details last reviewed on 4 October 2026. Tax rules change often. This is general information, not tax or legal advice, so confirm specifics with your chartered accountant.
On 1 April 2026 the Income-tax Act, 1961 gave way to a new law, and every TDS section number your team knew by heart moved. The rates did not. That mix of renumbering and continuity causes mistakes: a deduction booked under the wrong Act, a return filed on the wrong form, a deposit that slips.
This guide covers TDS under the Income-tax Act 2025 from a finance team's seat. What changed, what did not, which Act governs a given payment, the monthly and quarterly calendar, a transition checklist and the mistakes to avoid. It is one part of the wider picture in our guide to B2B accounting workflows in India.
What changed on 1 April 2026
The Income-tax Act, 2025 is Act 30 of 2025. Parliament passed it on 11-12 August 2025, the President gave assent on 21 August 2025, and it came into force on 1 April 2026, replacing the 1961 Act.
For TDS the headline is consolidation. All the TDS sections from 192 to 194T of the old Act now sit under two sections of the new one: section 392 and section 393 (Income Tax Department FAQ). So "TDS section 393" is now the home for most of what used to be a long list of separate sections.
| Where it lived under the 1961 Act | Where it sits under the 2025 Act |
|---|---|
| TDS sections 192 to 194T | Sections 392 and 393 |
| Interest and prosecution for TDS defaults (section 201) | Section 398 |
| Late statement fee (section 234E) | Reported as section 427 |
| Challans and statements for Forms 26QB, 26QC, 26QD, 26QE | Form 141, for tax deducted under section 393(1) |
What did not change
The Income Tax Department states that TDS rates and monetary thresholds for all categories of payments have been retained as under the 1961 Act. Labels such as 194C and 194J are still widely used in practice, and they still apply to transactions before April 2026. Expect to see both vocabularies side by side for a long time.
Which Act applies to which transaction
The test is the earlier of the event of credit or payment. If that earlier event happened up to 31 March 2026, the old Act applies. If it happened on or after 1 April 2026, the new Act applies. Corrections to returns for the old period continue under the old Act.
Take an invoice credited on 28 March 2026 and paid on 10 April 2026. The credit came first, so the old Act applies even though cash left in April.
An invoice credited on 3 April and paid on 20 April falls under the new Act. An advance paid in March against an invoice booked in May is decided by the March payment.
This matters most for March accruals paid later, advances paid before the invoice, and corrections to statements for periods before April 2026.
The TDS calendar for 2026-27
TDS runs on a monthly deposit and a quarterly statement. The monthly rule is in general: deposit by the 7th of the month following the deduction. For March deductions by non-government deductors, the due date is 30 April. For March 2026 that was 30 April 2026.
For the cases formerly handled by Forms 26QB, 26QC, 26QD and 26QE, the challan-cum-statement is Form 141, and payment is due within 30 days from the end of the month in which tax is deducted (incometax.gov.in).
Quarterly statement due dates were seen as 31 July, 31 October, 31 January and 31 May for the last quarter. Confirm these on incometax.gov.in or with your CA before you rely on them.
| What | When | Notes |
|---|---|---|
| Deposit of tax deducted | 7th of the following month | 30 April for March deductions (non-government deductors) |
| Challan-cum-statement, Form 141 | Within 30 days from end of the month of deduction | For cases formerly under Forms 26QB, 26QC, 26QD, 26QE |
| Quarterly statements | 31 July, 31 October, 31 January, 31 May (last quarter) | Confirm with your CA |
Late deposit is the costly one. Interest on tax deducted but not deposited accrues at 1.5% per month or part of a month, from the date of deduction to the date of payment (incometax.gov.in).
Interest for late deduction has been reported at 1% per month, so confirm that figure with your CA. Late filing of a statement has been reported to carry a fee of Rs 200 per day, capped at the tax deductible, now under section 427.
TDS return forms for 2026
Under the Income-tax Rules, 2026, notified on 20 March 2026 and in force from 1 April 2026, form numbers have been reported as follows. Check the official forms list on incometax.gov.in before filing, because this is the part most likely to be mistyped from memory.
| Old form | Purpose | Reported as |
|---|---|---|
| 24Q | Quarterly statement, salary | Form 138 |
| 26Q | Quarterly statement, non-salary | Form 140 |
| 27EQ | Quarterly statement, collection at source | Form 143 |
| Form 16 | Certificate, salary | Form 130 |
| Form 16A | Certificate, non-salary | Form 131 |
Statements for periods before April 2026 keep their old forms, because corrections stay under the old Act. So for a while a finance team files on both sets.
A transition checklist for the finance team
- Split your records at 1 April 2026. Tag each deduction by the earlier of credit or payment, so it is clear which Act it belongs to.
- Review year-end accruals. List March 2026 credits paid after March and confirm they are treated under the old Act.
- Map old labels to the new sections. Keep a single reference table that your AP team uses, instead of each person remembering their own.
- Check your system. Ask your accounting or ERP vendor, including us, whether deduction rules, challans and statements are configured for the new section numbering and forms. Do not assume.
- Confirm the form list. Verify the form numbers above against the official list on incometax.gov.in for every statement and certificate you issue.
- Rebuild the calendar. Put the 7th, the 30 April exception, Form 141 timing and the quarterly dates in one shared calendar with a named owner.
- Keep old-period corrections separate. Any revision to a pre-April 2026 statement follows the old Act and old forms.
- Warn vendors. Certificates may arrive under new form names, so tell payees in advance.
- Reconcile deductions to deposits monthly. Every deduction should have a matching challan. Our procure-to-pay guide covers the payment flow it sits in.
- Get your CA to sign off the mapping once.
Common mistakes
- Using the payment date alone. The test is the earlier of credit or payment. A March credit paid in April stays under the old Act.
- Assuming rates changed. They were retained, so a missing deduction cannot be blamed on "waiting for the new rates".
- Filing on a mix of forms. Old-period corrections use old forms. New-period statements use the new ones.
- Booking but not depositing. A deduction in the ledger with no challan accrues interest at 1.5% per month from the date of deduction.
- Ignoring the neighbours. TDS interacts with GST work. Invoice data used for TDS should agree with what you report in GST e-invoicing and with the purchase side of your GSTR-2B reconciliation.
Where OpsGrids Finance fits
OpsGrids Finance covers TDS withholding, invoices, payments and allocations, and GST returns, on a full ledger. The e-invoicing (IRN), e-way bill and IMS workflows are e-invoice-ready but run against a simulated government portal today; until the live connection ships, use the official portals or your GST Suvidha Provider. Invoices are append-only, so a correction is a new row and the original stays visible. Events can be routed to people through notification rules.
A TDS workflow only works if the section numbering and forms in your system match the law. Ask your vendor, including us, to confirm that configuration against the current official forms. No software guarantees compliance: your data, the portal and your CA's judgement still decide the outcome.
FAQ
Is there a TDS section 393 under the new Act? Yes. Sections 192 to 194T of the 1961 Act are consolidated under section 392 and section 393 of the Income-tax Act, 2025, according to the Income Tax Department FAQ.
Did TDS rates change under the Income-tax Act 2025? No. The department states that TDS rates and monetary thresholds for all categories of payments have been retained as under the 1961 Act.
Which Act applies if I credited a vendor in March and paid in April? The earlier event decides. A credit up to 31 March 2026 falls under the old Act, even if the payment was made on or after 1 April.
What is the TDS deposit due date now? In general the 7th of the month following deduction, and 30 April for March deductions by non-government deductors. Form 141 cases are due within 30 days from the end of the month of deduction. Confirm with your CA.
Talk to us about your TDS workflow
Want to see how this maps to your own process? Talk to our team for a walkthrough.
Sources (checked 4 October 2026)
- Income Tax Department: TDS compliance and tax-payments FAQ pages (incometax.gov.in)
- Income Tax Department: Form 141 page (incometax.gov.in)
- PIB: Income-tax Act, 2025 comes into force, 1 April 2026 (pib.gov.in)
- Income-tax Rules, 2026, notified 20 March 2026 (incometax.gov.in; secondary reports, confirm against the official forms list)