Key Structural Changes in TDS Provisions w.e.f.1 April 2026
Table of Contents
Key Structural Changes in Tax Deducted at Source Provisions – Effective from 1 April 2026
- The Income Tax Act, 2025, has significantly reorganized the Tax Deducted at Source framework to simplify compliance and reporting. While most tax deductions at rates and thresholds remain largely unchanged, the relevant sections have been consolidated into a more streamlined structure.
- The Income Tax Act, 2025, introduces a simplified tax deduction at source framework by replacing multiple tax deduction at source sections with a consolidated structure. Section 392 now governs salary tax deducted at source, while Section 393(1) covers most resident tax deducted at source provisions such as interest, dividends, rent, commission, contracts, professional fees, property transactions, purchase of goods, and virtual digital assets. Businesses should proactively align their systems and compliance processes before 1 April 2026 to ensure a smooth transition.
Section 392 – Tax Deducted at Source on Salary Payments
Section 392 replaces the existing provisions of Section 192 of the Income Tax Act, 1961 and governs TDS deduction on salary income.
| New Section | Earlier Section | Nature of Payment |
| Section 392 | Section 192 | Salary Payments |
Section 393(1) – Consolidated Tax Deducted at Source Framework for Residents
Section 393(1) consolidates several Tax Deducted at Source provisions that were previously covered under different sections of the Income-tax Act, 1961.
| Earlier Section | Nature of Payment | New Section |
| Section 193 | Interest on Securities | Section 393(1) |
| Section 194A | Interest Other Than Securities | Section 393(1) |
| Section 194 | Dividend Income | Section 393(1) |
| Section 194D | Insurance Commission | Section 393(1) |
| Section 194H | Commission or Brokerage | Section 393(1) |
| Section 194I | Rent Payments | Section 393(1) |
| Section 194C | Contract Payments | Section 393(1) |
| Section 194J | Professional & Technical Services | Section 393(1) |
| Section 194IA | Transfer of Immovable Property | Section 393(1) |
| Section 194Q | Purchase of Goods | Section 393(1) |
| Section 194S | Virtual Digital Assets (Crypto/NFT) | Section 393(1) |
Major Categories Covered U/s 393(1)
| Category | Examples |
| Interest Income | Bank interest, securities interest, deposits |
| Dividend Income | Dividend from companies and mutual funds |
| Commission & Brokerage | Business commission, insurance commission |
| Rental Income | Land, building, plant, machinery and furniture |
| Contract Payments | Payments to contractors and sub-contractors |
| Professional Services | Legal, accounting, consultancy and technical services |
| Property Transactions | Purchase of immovable property |
| Goods Transactions | Purchase of goods exceeding prescribed limits |
| Digital Assets | Crypto and NFT transactions |
Compliance Impact from April 2026
- Existing Tax Deducted at Source provisions are regrouped u/s 393(1). Section codes and reporting formats will change. Businesses need to update Payroll software, ERP systems, tax-deducted-at-source masters and mappings, compliance workflows, and Return filing processes
- Tax Deducted at Source rates and thresholds largely remain unchanged, but section references, coding structures, and reporting requirements will need to be updated.
TDS Payment & Return Due Date Chart—FY 2026-27 (April 2026 – March 2027)
TDS Payment Due Dates
| Deduction Month | Tax Deducted at Source Payment Due Date |
|---|---|
| April 2026 | 7 May 2026 |
| May 2026 | 7 June 2026 |
| June 2026 | 7 July 2026 |
| July 2026 | 7 August 2026 |
| August 2026 | 7 September 2026 |
| September 2026 | 7 October 2026 |
| October 2026 | 7 November 2026 |
| November 2026 | 7 December 2026 |
| December 2026 | 7 January 2027 |
| January 2027 | 7 February 2027 |
| February 2027 | 7 March 2027 |
| March 2027 | 30 April 2027 |
Note: Tax Deducted at Source payment is generally made through Challan ITNS 281.
Tax Deducted at Source Return Filing Due Dates (New Forms)
| Quarter | Period | Due Date | New Form |
|---|---|---|---|
| Q1 | April – June 2026 | 31 July 2026 | Form 138 / 140 / 144 |
| Q2 | July – September 2026 | 31 October 2026 | Form 138 / 140 / 144 |
| Q3 | October – December 2026 | 31 January 2027 | Form 138 / 140 / 144 |
| Q4 | January – March 2027 | 31 May 2027 | Form 138 / 140 / 144 |
Important Tax Deducted at Source Forms (Applicable from April 2026)
| Purpose | Old Form | New Form |
|---|---|---|
| Salary Tax Deducted at Source Return | Form 24Q | Form 138 |
| Non-Salary Tax Deducted at Source Return | Form 26Q | Form 140 |
| Non-Resident Tax Deducted at Source Return | Form 27Q | Form 144 |
| Tax Deducted at Source Return | Form 27EQ | Form 143 |
| Salary Tax Deducted at Source Certificate | Form 16 | Form 130 |
| Non-Salary Tax Deducted at Source Certificate | Form 16A | Form 131 |
Key Highlights
- Section 392 replaces the existing salary tax deduction at source provisions of Section 192. Section 393 introduces a consolidated framework for most non-salary tax deduction at source provisions.
- Forms 24Q, 26Q, 27Q & 27EQ are replaced by Forms 138, 140, 144 & 143, respectively, from April 2026. Form 16 and Form 16A are replaced by Form 130 and Form 131.
- In March 2027, Tax Deducted at Source must be deposited by 30 April 2027, unlike other months where the due date is generally the 7th of the following month.
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