If you deduct TDS — on salaries, rent, contractor bills, professional fees or payments abroad — the Income-tax Act 2025 changes the labels on almost everything you file. Not the rates. The numbers. From 1 April 2026, dozens of TDS sections collapse into three, and the forms you have quoted for years get new names. Here is the full map, and what to change in practice.

The big consolidation: three sections instead of dozens

The 1961 Act scattered TDS across section 192 (salary), the long 194-series (194C, 194-I, 194-IA, 194J and friends), section 195 (non-residents) and section 197 (lower-deduction certificates). The 2025 Act compresses all of it:

  • Section 392 (earlier 192) — TDS on salaries. A straight renumbering.
  • Section 393 (earlier the entire 194-series and 195) — all non-salary TDS, presented as tables rather than prose. Section 393(1) covers payments to residents: property, rent, contracts, professional fees and the rest. Sections 393(2) and 393(3) cover payments to non-residents — the old section 195 territory.
  • Section 395 (earlier 197) — lower or NIL deduction certificates, now applied for on Form 128 (the old Form 13).

The table format is genuinely easier to read: one row per payment type, with the rate and threshold beside it. But every contract, payroll system and certificate that cites “section 194C” or “section 195” will need its references updated.

The form renames, in one table

From 1 April 2026:

  • Form 16 → Form 130 — the salary TDS certificate employees receive.
  • Form 26AS → Form 168 — the annual tax statement every taxpayer reconciles against.
  • Form 24Q → Form 138 — the quarterly salary-TDS statement employers file.
  • Forms 26QB / 26QC / 26QD / 26QE → Form 141 — a single challan-cum-statement for TDS under section 393(1) on property, rent, contractor and VDA payments.
  • Form 13 → Form 128 — the application for a lower/NIL TDS certificate under section 395.
  • Form 15CA / 15CB → Forms 145 / 146 — foreign-remittance declaration and CA certificate. Form 146 is needed where taxable remittances to a non-resident exceed ₹5 lakh in the financial year.
  • Form 10F → Form 42 — the treaty-relief particulars a non-resident files with its Tax Residency Certificate.

The short version

Rates and thresholds: unchanged. Labels: all new from 1 April 2026. Salary TDS is section 392; everything else is section 393; certificates are section 395 on Form 128. Form 16 becomes 130, 26AS becomes 168, 24Q becomes 138, the 26QB family becomes 141. For FY 2025-26 filings made during 2026, keep using the old numbers.

The transition: which numbers do you quote when?

This is where mistakes will happen, so be precise:

  • FY 2025-26 (income up to 31 March 2026): governed by the 1961 Act. The TDS returns, the Form 16 you issue to employees in mid-2026, the 26AS reconciliations for the year — all under the old numbering.
  • From 1 April 2026 (tax year 2026-27): deductions are made under sections 392/393, and the new forms apply to those deductions.
  • Old 15CA/15CB filed for remittances completed on or before 31 March 2026 remain valid. New remittances use Forms 145/146.

For a stretch of 2026, your team will work both systems in parallel: closing out FY 2025-26 compliance under the old Act while running current-year deductions under the new one. Label your working papers accordingly.

What deductors must actually change

1. Payroll and accounting software references

Check that your payroll vendor maps salary TDS to section 392 and issues Form 130 for tax year 2026-27. Most major packages will update automatically; in-house and legacy systems will not.

2. Templates, contracts and certificates

Rent agreements, contractor agreements and engagement letters often quote TDS sections. New documents should cite the new section with the old one in parentheses — “section 393(1) (earlier 194-I)” — so both parties recognise it.

3. Property and rent payments: the new Form 141

Buying property from a resident still attracts 1% TDS where the consideration or stamp duty value is ₹50 lakh or more, with no TAN required — but the challan-cum-statement is now Form 141, not 26QB. Buying from an NRI seller remains a different animal: section 393(2)/(3), no ₹50-lakh threshold, TDS on the full consideration, and the buyer needs a TAN.

4. Lower-deduction certificates

Applications go in on Form 128 under section 395. Existing workflows built around “Form 13” need only the name updated; the logic of the application is the same.

5. Payments abroad: Forms 145 and 146

If you remit to foreign vendors, consultants or shareholders, the 15CA/15CB pairing you know becomes Forms 145 and 146. The mechanics are familiar: the remitter's declaration goes with most remittances, and the CA certificate (now Form 146) is needed where taxable remittances to a non-resident cross ₹5 lakh in the financial year. Non-resident payees claiming treaty rates should now hand you a TRC plus Form 42 (the old Form 10F) — update your vendor-onboarding checklist to ask for the new number.

6. Reconciliation habits

From tax year 2026-27, your annual tax statement is Form 168. Whoever reconciles 26AS today should simply learn the new number — the discipline of matching books to the statement every quarter matters more than ever during the transition, when misquoted sections are most likely.

Nothing about TDS got harder in the 2025 Act — but for one transition year, every deductor is running two numbering systems at once. The errors will come from templates nobody re-read.

A quick map by payer type

  • Employers: deduct under section 392; file quarterly statements on Form 138 (old 24Q); issue Form 130 (old Form 16) to employees for tax year 2026-27.
  • Tenants and property buyers (resident counterparties): section 393(1); single challan-cum-statement on Form 141.
  • Businesses paying contractors and professionals: section 393(1) rows replace 194C and 194J; rates and thresholds carry over.
  • Anyone paying a non-resident: section 393(2)/(3); TAN required; treaty relief needs TRC plus Form 42; CA certificate on Form 146 above the ₹5 lakh threshold.
  • Payees expecting low tax: apply under section 395 on Form 128 for a lower or NIL deduction certificate before the payment cycle starts.

Where this touches the rest of your year

Your TDS record feeds directly into the tax audit: Form 3CD asks for it line by line, and the audit thresholds themselves now sit in section 63 of the new Act (earlier 44AB). If you make payments to non-resident sellers or shareholders, the capital gains side is covered in our guide to capital gains under the Income-tax Act 2025. And for the broader picture — returns under section 263, presumptive tax under section 58 — see what the new Act means for your business.

Our taxation practice handles TDS compliance, certificates and transition reviews for businesses of all sizes. If you would like a one-time check of your templates and systems before the new numbering bites, write to us.

SL
Reviewed by CA. Sunil Kumar Lahoti Founding Partner, S. K. Lahoti Associates, Chartered Accountants.

Frequently asked questions

Section 393 of the Income-tax Act 2025. It is a single, table-based section covering all non-salary TDS: section 393(1) deals with payments to residents (property, rent, contractors, professional fees and more), while sections 393(2) and 393(3) deal with payments to non-residents — the territory of the old section 195. Salary TDS sits separately in section 392 (earlier 192).

From 1 April 2026 the salary TDS certificate is Form 130 under the Income-tax Act 2025. For FY 2025-26 — the certificates employers issue during 2026 — the familiar Form 16 still applies, because that year is governed by the 1961 Act. The content is essentially the same; the number changes.

No. The 2025 Act is a rewrite, not a rate change. The rates and thresholds carry over; what changes is where they sit (consolidated tables in section 393) and the form numbers used to report and certify deductions.

From 1 April 2026, Forms 26QB, 26QC, 26QD and 26QE merge into a single challan-cum-statement: Form 141, used for TDS under section 393(1) on property, rent, contractor and VDA payments by specified persons. Buying from an NRI seller is different — that falls under section 393(2)/(3) and needs a TAN.

Yes. Old Forms 15CA and 15CB filed for remittances completed on or before 31 March 2026 remain valid. For remittances from 1 April 2026, the forms are 145 (remitter's declaration) and 146 (the CA certificate, needed for taxable remittances above ₹5 lakh in a financial year).