Every TDS and TCS section number has changed under the Income Tax Act 2025 effective April 1, 2026. If your TDS returns reference old section numbers from the 1961 Act, they will be rejected. Update your systems immediately.
The Income Tax Act 2025 replaced the Income Tax Act 1961 with effect from April 1, 2026. Every section number in the old Act has been renumbered. For businesses that deduct TDS on payments to contractors, professionals, landlords, and employees, this means every TDS challan, return, and certificate must now reference the new section numbers.
This guide provides the mapping you need to update your compliance systems.
Looking for expert help with TDS section mapping and compliance update services under Income Tax Act 2025? The team at TaxGarden helps Indian SMEs stay compliant end-to-end — filings, notices, and advisory, all in one place.
Why This Matters Right Now
TDS deducted from April 1, 2026 onwards must be reported under new section numbers. Your quarterly TDS return (Form 26Q) for Q1 FY 2026-27 (April to June 2026), due by July 31, 2026, must use the new sections.
If you file using old section numbers:
- The return may be rejected by the CPC (Centralized Processing Centre)
- Your deductees will not see the TDS credit in their Form 26AS
- You may face penalties for incorrect filing
- Deductees may receive demand notices for tax not reflected in their records
TDS Section Mapping: Old Act to New Act
Here are the most commonly used TDS sections for businesses and their new equivalents:
Salary and Employment
| Old Section (1961 Act) | New Section (2025 Act) | Nature of Payment | TDS Rate |
|---|---|---|---|
| 192 | Corresponding new section | Salary | As per slab |
| 192A | Corresponding new section | Premature PF withdrawal | 10% |
| 194B | Corresponding new section | Lottery/game winnings | 30% |
| 194BA | Corresponding new section | Online gaming winnings | 30% |
Business Payments
| Old Section (1961 Act) | New Section (2025 Act) | Nature of Payment | TDS Rate |
|---|---|---|---|
| 194C | Corresponding new section | Contractor payments | 1% (individual/HUF), 2% (others) |
| 194H | Corresponding new section | Commission/brokerage | 5% |
| 194I(a) | Corresponding new section | Rent on plant/machinery | 2% |
| 194I(b) | Corresponding new section | Rent on land/building | 10% |
| 194J | Corresponding new section | Professional/technical fees | 10% (professional), 2% (technical) |
| 194Q | Corresponding new section | Purchase of goods (above Rs 50 lakh) | 0.1% |
Interest and Dividends
| Old Section (1961 Act) | New Section (2025 Act) | Nature of Payment | TDS Rate |
|---|---|---|---|
| 194A | Corresponding new section | Interest (other than securities) | 10% |
| 194 | Corresponding new section | Dividend | 10% |
| 193 | Corresponding new section | Interest on securities | 10% |
Property and Transfers
| Old Section (1961 Act) | New Section (2025 Act) | Nature of Payment | TDS Rate |
|---|---|---|---|
| 194IA | Corresponding new section | Property purchase (above Rs 50 lakh) | 1% |
| 194IB | Corresponding new section | Rent by individual (above Rs 50,000/month) | 5% |
| 194M | Corresponding new section | Payment to resident contractor/professional by individual | 5% |
Note: The exact new section numbers under the Income Tax Act 2025 should be verified from the official CBDT notification. The rates remain largely unchanged, but the section references are entirely new.
TCS Section Mapping
Tax Collected at Source (TCS) sections have also been renumbered:
| Old Section (1961 Act) | New Section (2025 Act) | Nature of Transaction | TCS Rate |
|---|---|---|---|
| 206C(1) | Corresponding new section | Sale of specified goods (timber, scrap, minerals) | 1-5% |
| 206C(1G) | Corresponding new section | Foreign remittance under LRS | 5-20% |
| 206C(1H) | Corresponding new section | Sale of goods (above Rs 50 lakh) | 0.1% |
How to Update Your Systems
Step 1: Get the Official Mapping
Download the section mapping from the CBDT website or the e-filing portal. The Income Tax Act 2025 has been published with a concordance table mapping old sections to new ones.
Step 2: Update Your Accounting Software
Most major accounting packages (Tally, Zoho Books, Busy, Marg) are releasing updates with new section numbers. Contact your software vendor to:
- Install the latest TDS update
- Verify that new section numbers are correctly mapped
- Test a sample TDS entry before processing live transactions
Step 3: Update TDS Challan Configuration
When depositing TDS with the government:
- Use new challan codes if specified under the new Act
- Select the correct new section number in the challan form
- Verify the payment appears in Form 26AS under the correct section
Step 4: Communicate with Your CA
If your CA prepares TDS returns on your behalf, confirm that they are using new section numbers. Ask for a confirmation that Form 26Q will reference the correct sections.
Step 5: Update Internal Documentation
If you have internal policies or process documents referencing TDS sections (vendor payment policies, rent payment procedures), update the section references.
Looking for expert help with TDS return filing and compliance update under the new Income Tax Act? The team at TaxGarden helps Indian SMEs stay compliant end-to-end — filings, notices, and advisory, all in one place.
Impact on TDS Certificates
Form 16 Replaced by Form 130
For salary TDS, Form 16 has been replaced by Form 130. Employers must issue Form 130 to employees by June 15.
Form 16A
Form 16A (TDS certificate for non-salary payments) will also reference new section numbers. When you issue Form 16A to your vendors, contractors, or landlords, it must show the new section under which TDS was deducted.
Form 26AS
Form 26AS on the TRACES portal will reflect the new section numbers for TDS deducted from April 1, 2026 onwards. Earlier deductions (up to March 31, 2026) will continue to show old section numbers.
Revised TDS Rates to Note
While most TDS rates remain unchanged, a few adjustments have been made:
-
TCS on foreign remittance: Reduced from 20% to 10% for certain categories under LRS (Liberalized Remittance Scheme) for amounts above Rs 7 lakh.
-
TDS on e-commerce: The rate and threshold for e-commerce operator TDS have been rationalized.
-
Higher TDS for non-filers: Sections 206AB and 206CCA (higher TDS/TCS for non-filers of ITR) continue under new section numbers with the same rates (double the normal rate or 5%, whichever is higher).
Common Errors to Avoid
-
Mixing old and new sections in the same return. For Q1 FY 2026-27 return, every entry must use new section numbers. Do not use old sections for April transactions and new sections for May transactions.
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Not updating software before the first TDS deposit. If your software still shows old sections, the challan will reference incorrect sections.
-
Issuing Form 16A with old section numbers. Your vendor needs the correct new section reference to claim TDS credit in their ITR.
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Forgetting to update lower deduction certificates. If you hold a lower TDS deduction certificate under the old Section 197, check whether it needs to be reapplied under the new Act.
Let TaxGarden Handle Your TDS Compliance
Updating section references, filing quarterly returns, and issuing certificates under the new Act requires careful attention. TaxGarden's tax compliance service covers TDS return preparation, challan management, and certificate generation with correct new section numbers.
Frequently Asked Questions
Are TDS rates changing under the new Act?
Most TDS rates remain unchanged. The primary change is section renumbering. A few rates have been adjusted (like TCS on foreign remittance), but the core rates for contractor, professional, and rent TDS remain the same.
Do I need to re-register my TAN?
No. Your existing TAN continues to be valid. No new registration is required under the Income Tax Act 2025.
What about TDS deducted before April 1, 2026?
TDS deducted before April 1, 2026 continues to be reported under old section numbers. Only deductions from April 1, 2026 onwards use new sections.
Will Form 26Q change?
The form structure will be updated to include new section numbers. The overall filing process remains similar, but the section dropdown will show new references.
How do I find the new section number for a specific payment?
Use the concordance table published by CBDT alongside the Income Tax Act 2025. Most CA institutes (ICAI) and tax portals have also published section mapping guides.
