CONTENTS
Comparative Study of Income-tax Act, 2025 (ITA 2025) and Income-tax Act, 1961 (ITA 1961) I-9
TDS Map under ITA 2025I-22
TDS Rate Reckoner under the ITA 2025I-33
TCS Rate Reckoner under the ITA 2025I-49
Table showing TDS Sections of ITA 1961 and Corresponding Sections of ITA 2025I-51
Table showing TDS Rules of Income-tax Rules, 1962 & Corresponding Rules of Income-tax Rules, 2026 I-57
Table showing TDS Forms of Income-tax Rules, 2026 and Corresponding Forms of Income-tax Rules, 1962 I-61
DIVISION A
NATURE OF TDS/TCS PROVISIONS
CHAPTER 1: MODES OF PAYMENT OR COLLECTION OF INCOME-TAX 3
CHAPTER 2: TAX DEDUCTED AT SOURCE/TAX COLLECTED AT SOURCE 11
CHAPTER 3: NATURE OF TDS/TCS PROVISIONS 13
CHAPTER 4: SCHEME OF CHAPTER XIX OF ITA 2025 17
CHAPTER 5: INTERPLAY OF ITA 1961 TO ITA 2025 AND TRANSITION TO ITA 2025 30
CHAPTER 6: EXEMPTIONS FROM DEDUCTION OF TDS 37
DIVISION B
TDS PROVISIONS APPLICABLE TO RESIDENT PAYEES
CHAPTER 7: MAP OF TDS PROVISIONS RELATING TO COMMISSION OR BROKERAGE PAYABLE/PAID TO RESIDENTS 49
CHAPTER 8: DEDUCTION OF TDS ON INSURANCE COMMISSION PAYABLE/ PAID TO RESIDENTS 51
CHAPTER 9: TDS ON COMMISSION (OTHER THAN INSURANCE COMMISSION) OR BROKERAGE PAYABLE/PAID TO RESIDENTS 55
CHAPTER 10: MAP OF TDS PROVISIONS RELATING TO RENT PAYABLE/PAID TO RESIDENTS 84
CHAPTER 11: TDS PROVISIONS RELATING TO RENT PAYMENT BY A PERSON OTHER THAN A SPECIFIED PERSON 85
CHAPTER 12: TDS PROVISIONS RELATING TO RENT PAYMENT BY A SPECIFIED PERSON 89
CHAPTER 13: MAP OF TDS PROVISIONS RELATING TO CONSIDERATION OR COMPENSATION FOR IMMOVABLE PROPERTY PAYABLE/PAID TO RESIDENTS 93
CHAPTER 14: TDS ON CONSIDERATION FOR TRANSFER OF IMMOVABLE PROPERTY PAYABLE/PAID TO RESIDENTS 95
CHAPTER 15: TDS ON CONSIDERATION UNDER A JOINT DEVELOPMENT AGREEMENT PAYABLE/PAID TO RESIDENTS 101
CHAPTER 16: TDS ON COMPENSATION/CONSIDERATION FOR COMPULSORY ACQUISITION OF IMMOVABLE PROPERTY PAYABLE/PAID TO RESIDENTS 105
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CHAPTER 17: MAP OF TDS PROVISIONS RELATING TO INCOME FROM CAPITAL MARKET PAYABLE/PAID TO RESIDENTS
CHAPTER 18: TDS PROVISIONS RELATING TO INCOME IN RESPECT OF UNITS OF MUTUAL FUND PAYABLE/PAID TO RESIDENTS
CHAPTER 19: TDS PROVISIONS RELATING TO DISTRIBUTED INCOME PAYABLE/ PAID TO A UNITHOLDER OF A BUSINESS TRUST
CHAPTER 20: TDS PROVISIONS RELATING TO NON-EXEMPT INCOME IN RESPECT OF UNITS OF AN INVESTMENT FUND PAYABLE TO ITS RESIDENT UNITHOLDERS
CHAPTER 21: TDS PROVISIONS RELATING TO ANY INCOME IN RESPECT OF INVESTMENT IN A SPECIFIED SECURITISATION TRUST PAYABLE TO RESIDENT INVESTORS
CHAPTER 22: MAP OF TDS PROVISIONS RELATING TO INTEREST INCOME PAYABLE/PAID TO RESIDENTS
CHAPTER 23: TDS ON ANY INCOME BY WAY OF INTEREST ON SECURITIES PAYABLE TO RESIDENTS
CHAPTER 24: TDS PROVISIONS RELATING TO ANY INCOME BY WAY OF INTEREST OTHER THAN INTEREST ON SECURITIES PAYABLE BY SPECIFIED PERSON (OTHER THAN BANK OR POST OFFICE) TO RESIDENTS
CHAPTER 25: TDS PROVISIONS RELATING TO ANY INCOME BY WAY OF INTEREST OTHER THAN INTEREST ON SECURITIES PAYABLE TO RESIDENTS WHERE PAYER IS OTHER THAN BANK/POST OFFICE
CHAPTER 26: TDS PROVISIONS RELATING TO ANY DIVIDEND DECLARED PAID/ PAYABLE TO RESIDENTS
CHAPTER 27: MAPPING OF TDS PROVISIONS RELATING TO PAYMENTS TO RESIDENT CONTRACTORS
CHAPTER 28: TDS ON PAYMENTS TO RESIDENT CONTRACTORS WHERE PAYER IS ANY DESIGNATED PERSON
CHAPTER 29: MAPPING OF TDS ON PAYMENTS OF FEES FOR PROFESSIONAL SERVICES TO RESIDENTS
CHAPTER 30: TDS ON PAYMENTS OF FEES FOR PROFESSIONAL SERVICES, FTS, ROYALTY, NON-COMPETE FEES AND NON-EMPLOYEE DIRECTOR’S REMUNERATION OR FEES OR COMMISSION TO RESIDENTS
CHAPTER 31: TDS ON PAYMENTS OF FPS, COMMISSION AND BROKERAGE AND PAYMENTS TO CONTRACTORS, WHERE PAYER IS NON-SPECIFIED INDIVIDUALS/HUFs
CHAPTER 32: TDS ON PAYMENT OF ANY SUM UNDER A LIFE INSURANCE POLICY TO A RESIDENT WHICH IS NOT TAX-FREE
CHAPTER 33: TDS ON PAYMENT OF ANY SUM EXCEEDING ` 50 LAKHS FOR PURCHASE OF ANY GOODS TO A RESIDENT
CHAPTER 34: TDS ON TOTAL INCOME OF A RESIDENT SENIOR CITIZEN AFTER DEDUCTION ALLOWABLE UNDER CHAPTER VIII AND REBATE ALLOWABLE UNDER SECTION 156
CHAPTER 35: TDS ON ANY BENEFIT OR PERQUISITE, WHETHER CONVERTIBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR THE EXERCISE OF A PROFESSION OF ANY RESIDENT
CHAPTER 36: TDS ON ANY SUM ON ACCOUNT OF SALE OF GOODS OR PROVISION OF SERVICES BY AN E-COMMERCE PARTICIPANT, FACILITATED BY AN E-COMMERCE OPERATOR THROUGH ITS DIGITAL OR ELECTRONIC FACILITY OR PLATFORM
CHAPTER 37: TDS ON ANY SUM BY WAY OF CONSIDERATION FOR TRANSFER OF A VIRTUAL DIGITAL ASSET
CONTENTS
DIVISION C
TDS PROVISIONS APPLICABLE TO PAYMENTS TO ANY PERSON
CHAPTER 38: MAPPING OF TDS ON WINNINGS PAYABLE TO ANY PERSON 375
CHAPTER 39: TDS ON WINNINGS FROM LOTTERY, CROSSWORD PUZZLE, ETC. PAYABLE TO ANY PERSON 377
CHAPTER 40: TDS ON NET WINNINGS FROM ONLINE GAMES PAYABLE TO ANY PERSON 387
CHAPTER 41: TDS ON WINNINGS FROM HORSE RACES PAYABLE TO ANY PERSON 394
CHAPTER 42: TDS ON COMMISSION, REMUNERATION OR PRIZE ON LOTTERY TICKETS PAID OR CREDITED TO LOTTERY AGENT
CHAPTER 43: TDS DEDUCTIBLE BY BANKS/POST OFFICES ON LARGE CASH WITHDRAWALS FROM ACCOUNTS BY ACCOUNTHOLDERS 401
CHAPTER 44: TDS ON PAYMENTS IN RESPECT OF DEPOSITS UNDER NSS 407
CHAPTER 45: TDS ON INTEREST/REMUNERATION PAID OR CREDITED BY FIRM/LLP TO A PARTNER 409
CHAPTER 46: TDS ON SALARY 417
CHAPTER 47: TDS ON ACCUMULATED PF BALANCE DUE TO AN EMPLOYEE 452
DIVISION D
TDS PROVISIONS APPLICABLE WHERE PAYEE IS NON-RESIDENT
CHAPTER 48: TDS ON PAYMENT TO NON-RESIDENT SPORTS PERSONS OR SPORTS ASSOCIATIONS OR ENTERTAINERS
CHAPTER 49: TDS ON INTEREST PAYABLE IN RESPECT OF MONEYS BORROWED IN FOREIGN CURRENCY FROM A SOURCE OUTSIDE INDIA
CHAPTER 50: TDS ON INTEREST PAYABLE ON FOREIGN BORROWINGS THROUGH ISSUE OF RUPEE DENOMINATED BOND BEFORE THE 1ST JULY, 2023
CHAPTER 51: TDS ON INTEREST PAYABLE ON FOREIGN BORROWINGS BY ISSUE OF RUPEE DENOMINATED BOND, WHICH IS LISTED ONLY ON A RECOGNISED STOCK EXCHANGE LOCATED IN ANY INTERNATIONAL FINANCIAL SERVICES CENTRE
CHAPTER 52: TDS ON ANY INCOME BY WAY OF INTEREST PAYABLE TO ANY NON-RESIDENT
CHAPTER 53: TDS ON DISTRIBUTED INCOME REFERRED TO IN SECTION 223, BEING OF THE NATURE REFERRED TO IN SCHEDULE V (TABLE: SL. NO. 3)
CHAPTER 54: TDS ON DISTRIBUTED INCOME REFERRED TO IN SECTION 223, BEING OF THE NATURE REFERRED TO IN SCHEDULE V (TABLE: SL. NO. 4)
CHAPTER 55: TDS ON NON-EXEMPT INCOME IN RESPECT OF UNITS OF AN INVESTMENT FUND PAYABLE TO ITS NON-RESIDENT UNITHOLDERS
CHAPTER 56: TDS ON ANY INCOME IN RESPECT OF AN INVESTMENT IN A SECURITISATION TRUST SPECIFIED IN SECTION 221 PAYABLE TO NON-RESIDENTS
CHAPTER 57: TDS ON ANY INCOME IN RESPECT OF UNITS OF MUTUAL FUND PAYABLE TO NON-RESIDENTS
CHAPTER 58: TDS ON ANY INCOME IN RESPECT OF UNITS REFERRED TO IN SECTION 208
CHAPTER 59: TDS ON ANY INCOME BY WAY OF LONG-TERM CAPITAL GAINS ARISING FROM THE TRANSFER OF UNITS REFERRED TO IN SECTION 208 PAYABLE TO NON-RESIDENTS
CHAPTER 60: INTEREST OR DIVIDENDS IN RESPECT OF BONDS OR GLOBAL DEPOSITORY RECEIPTS PAYABLE TO NON-RESIDENTS
CHAPTER 61: TDS ON ANY INCOME BY WAY OF LONG-TERM CAPITAL GAINS ARISING FROM THE TRANSFER OF BONDS OR GDRs PAYABLE TO NON-RESIDENTS
CHAPTER 62: ANY INCOME IN RESPECT OF SECURITIES REFERRED TO IN SECTION 210(1) (TABLE: SL. NO. 1) PAYABLE TO FIIs
CHAPTER 63: ANY INCOME IN RESPECT OF SECURITIES REFERRED TO IN SECTION 210(1) (TABLE: SL. NO. 1) PAYABLE TO A SPECIFIED FUND 498
CHAPTER 64: ANY TAXABLE SUM PAYABLE TO NON-RESIDENT OTHER THAN SALARIES INCLUDING INTEREST NOT SUBJECTED TO TDS UNDER SL. NOS. 2, 3, 4 AND 5
DIVISION E TCS PROVISIONS
CHAPTER 65: TAX COLLECTED AT SOURCE (TCS) 511 DIVISION F TDS & TCS COMPLIANCE AND REPORTING
CHAPTER 66: TAX DEDUCTION AND COLLECTION ACCOUNT NUMBER 523
CHAPTER 67: PAYEE/COLLECTEE TO FURNISH HIS VALID PAN TO ESCAPE HIGHER TDS/TCS 526
CHAPTER 68: CERTIFICATE FOR DEDUCTION AT NIL/LOWER TDS 531
CHAPTER 69: NON-DEDUCTION OF TDS BASED ON DEDUCTEE’S SELF-DECLARATION 541
CHAPTER 70: NON-COLLECTION OF TCS BASED ON COLLECTEE’S SELFDECLARATION 546
CHAPTER 71: CREDIT FOR TDS DEDUCTED/TCS COLLECTED TO THE DEDUCTEE/COLLECTEE 549
CHAPTER 72: DEPOSIT OF TDS DEDUCTED/TCS COLLECTED WITH CENTRAL GOVERNMENT 553
CHAPTER 73: FILING OF TDS RETURNS/TCS RETURNS 558
CHAPTER 74: TDS CERTIFICATES/TCS CERTIFICATES 566
CHAPTER 75: QUARTERLY RETURNS BY BANKS TO REPORT INTEREST PAYMENTS 570
CHAPTER 76: CONSEQUENCES OF DEFAULT IN OBLIGATIONS RELATING TO TDS/TCS 572
APPENDICES
APPENDIX 1 : Relevant Sections of Income-tax Act, 2025 579
APPENDIX 2 : Relevant Rules of Income-tax Rules, 2026 625
APPENDIX 3 : Relevant Forms of Income-tax Rules, 2026 644
APPENDIX 4 : CBDT’s Guidance Notes & FAQs on Form numbers 121 to 150 of Income-tax Rules, 2026 788 CONTENTS
COMPARATIVE STUDY OF INCOME-TAX ACT, 2025 (ITA 2025) AND INCOME-TAX ACT, 1961 (ITA 1961)
The changes made by ITA 2025 in TDS/TCS provisions vis-a-vis ITA 1961 have been grouped in 5 categories as below:
TDS made less tedious by Income-tax Act, 2025 (ITA 2025) for deductors of TDS
TDS made less tedious by Income-tax Act, 2025 (ITA 2025) for deductees of TDS
Changes in TCS provisions
Pain-points due to changes
New avenues for litigation
Other Changes
I.TDS made less tedious by Income-tax Act, 2025 (ITA 2025) for deductors of TDS
1. LANDMARK CHANGE: Liability to deduct TDS can’t be created from a back date through a retrospective amendment which deems some item as income with retrospective effect
Section 391(1)(a) of ITA 2025 provides that “the income-tax on any income shall be payable directly by the assessee if there is no provision under this Chapter to deduct income-tax on such income at the time of payment”
If there is any retrospective amendment treating some item as income with retrospective effect, and it comes within the scope of TDS provisions retrospectively because of the amendment, tax on such income can only be recovered directly from the taxpayer. The deductor cannot be penalised for not deducting tax on the same, as the provision requiring deduction of TDS did not exist in the Act at the time the source from which TDS was to be deducted (payment made) existed. This landmark change is inspired by
COMPARATIVE STUDY OF IT ACT, 2025 AND IT ACT, 1961 I-10
judicial decisions such as Bharti Cellular Ltd. v. Assistant Commissioner of Income-tax [2024] 160 taxmann.com 12 (SC) and Canara Bank v. ITO [2009] 121 ITD 1(Nag.-Trib) [Chapter 2]
2. New Clarification regarding TDS on Joint Development Agreement
Note 2 in Sl. No.3 of the Table in section 393(1) clarifies that in case of consideration on which provisions of both serial numbers 3(i) [corresponding to section 194-IA of ITA 1961] and 3(ii) [corresponding to section 194-IC of ITA 1961] are applicable, tax shall be deducted under 3(ii) only. This new clarification was necessary as there was an overlap of TDS provisions of sections 194-IA and 194-IC in the case of JDAs, giving rise to litigation. This new clarification will bring more clarity in TDS provisions and reduce litigation. [Chapter 14]
3. TDS only on dividends declared; No TDS on deemed dividends under ITA 2025
Section 194 of ITA 1961 required a domestic company to deduct TDS not only from final dividends and interim dividends but also from deemed dividends [amounts covered by clauses (a) to (f) of section 2(22) of ITA 1961] Sl. No.7 of the Table in section 393(1) of ITA 2025 requires a domestic company to deduct TDS from “Any dividend (including dividend on preference shares) declared” and not from deemed dividends distributed or paid within the meaning of clauses (a) to (e) of section 2(40) [See Para 26.3]
4. Clarity on scope of “royalty”- Wider scope of “royalty”
The definition of “royalty” as per Explanation 2 to section 9(1)(vii) applied to section 194J. For section 194J, the scope of “royalty” inter alia included consideration for transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property and consideration for transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work. It also included consideration for rendering of services in connection with such transfers. The scope of definition of “royalty” in section 9(6)(b) applicable to Sl. No. 6(iii) of the Table is wider. It also covers consideration for grant of the aforesaid rights and consideration for any services rendered in connection with grant of such rights.
5. Threshold limit applies individual sum-wise under Sl. No. 8(ii) of the Table in section 393(1) as compared to applying threshold to aggregate purchases during FY under section 194Q
Tax is deductible under Sl. No. 8(ii) of the Table on sum as per Note 1 for serial number 8(ii). Note 1 says that “The tax shall be deducted on the sum exceeding fifty lakh rupees”. The threshold limit is to
COMPARATIVE STUDY OF IT ACT, 2025 AND IT ACT, 1961
be applied sum-wise. If any sum paid for the purchase of any goods exceeded ` 50 lakhs, TDS is to be deducted.
Under Section 194Q, the purchase of goods during the previous year from a supplier/payee had to be aggregated to determine whether the threshold limit of ` 50 lakhs had been exceeded. Under section 194Q, the “buyer”/payer was required to track, from the start of the financial year, the value of completed purchases (deliveries received) from each resident seller and payments made to him. No TDS was to be deducted for credit/payment of amount to the seller so long as the threshold of ` 50,00,000 was not crossed either in respect of deliveries received from a resident seller during the financial year or in respect of payments made to him. Once the threshold of ` 50,00,000 was crossed either in respect of deliveries by him or in respect of payments made to him, TDS was liable to be deducted on a “credit to seller or payment to him, whichever is earlier” basis. [Chapter 33]
6. More clarity in the definitions of “partner” and “firm” for TDS on partner’s remuneration and interest under Sl. No. 7 of the Table in section 393(3)
There is more clarity in the new definitions of “partner” and “firm” [Chapter 45] than there was in the definitions in ITA 1961.
TDS will have to be deducted under Sl. No. 7 of the Table in section 393(3) by traditional partnership firm under Indian Partnership Act, 1932 from remuneration/interest paid to a partner regardless of whether the firm is registered or not under Chapter VII of the Indian Partnership Act, 1932.
TDS will have to be deducted under Sl. No. 7 of the Table in section 393(3) by traditional partnership firm under Indian Partnership Act, 1932 from remuneration/interest paid to a partner regardless of whether the firm is a assessed as such or whether it is assessed as AOP.
TDS will have to be deducted under Sl. No. 7 only by an LLP which is an Indian LLP (i.e. LLP defined in section 2(1)(n) of the LLP Act, 2008 as an LLP incorporated in India) Sl. No. 7 will not apply to a foreign LLP having a place of business even if it complies with certain provisions of LLP Act as foreign LLP is a “company” and not “firm” for tax purposes.
Designated Partner of an Indian LLP who is nominee of a body corporate partner is not a “partner”. Remuneration paid to such DP will not suffer TDS under Sl. No. 7 but under section 392 as salary.
7. Clarity that TDS defaults under Sl. No. 7 of the Table in section 393(3) will result is disallowance under Section 35(b) of remuneration/ interest paid/credited to partners
There is also more clarity that TDS defaults under Sl. No. 7 of the Table in section 393(3) will result in disallowance of remuneration paid by a firm to a partner, whereas there was considerable doubt under ITA 1961 whether TDS defaults under section 194-T will lead to disallowance under section 40(a) of remuneration paid/credited to partner even though the payment was compliant with conditions and limit in section 40(b). [See Chapter 76]
8. New clarificatory provision as regards a situation benefit or perquisite provided is in exchange of another VDA where there is no part in cash
Note 6 in Sl. No. 8 of the Table in section 393(1) provides that for serial number 8(iv) [corresponding to section 194R of ITA 1961] and (vi) [corresponding to section 194S of ITA 1961],—
(a) where the consideration or, benefit or perquisite provided, as the case may be,—
(i) is in exchange of another virtual digital asset where there is no part in cash, in respect of serial number 8(iv); or (ii) is wholly in kind; or
(iii) is partly in kind and partly in cash, but such part in cash is not sufficient to meet the liability of deduction of tax in respect of the whole of such payment or benefit or perquisite,
(b) the person responsible for paying or providing shall ensure that the tax required to be deducted has been paid, before releasing such consideration or providing such benefit or perquisite, as the case may be;
The provision in Note 8(a)(i) is unclear. Hopefully, it will be clarified in the removal of difficulty guidelines to be issued by the CBDT. [See Chapter 35]
9. Clarity on TDS deduction related to payments for Advertising services by removing overlap of TDS provisions related to Commission or Brokerage and TDS provisions related to professional services
Any payment for professional services fall outside the scope of the term “commission or brokerage” since these suffer TDS under different provisions and not under TDS provisions for Commission or brokerage.
However, advertising services were not covered in the definition of “professional services” in Explanation (ii) to section 194H. Therefore, this created confusion whether advertising services would attract TDS under section 194H or under section 194J. Section 402(28) provides a uniform definition of “professional services” for all TDS provisions under the ITA 2025. Therefore, as advertising services are covered in “professional services” under section 402(28), it is clear that under
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COMPARATIVE STUDY OF IT ACT, 2025 AND IT ACT, 1961
the ITA 2025 payment for advertising services will not be regarded as commission or brokerage so as to attract TDS under Sl. No. 1(ii) of the Table in section 393(1) but will attract TDS under Sl. No. 6(iii) of Table in section 393(1). [Para 9.5]
10. Supply of manpower included in the definition of “work”
Supply of manpower to a person to work under his supervision, control or direction (and not under the supervision, control or direction of the supplier and the manpower) shall attract TDS under Sl. No. 6(i) or 6(ii) of Table of section 393(1) and not under Sl. No. 6(iii) [See Para 28.9]
11. Omission of Tedious TDS requirement based on account holder’s ITR filing track record for past 3 FYs
First proviso to section 194N of ITA 1961 required TDS @2% to be deducted by banks, banking co-operative societies and post offices from cash withdrawn from any account if cash withdrawal/aggregate cash withdrawal during a financial year exceeded the threshold of ` 20,00,000 and TDS @ 5% if threshold of ` 1,00,00,000 was exceeded in case the account holder was a belated filer or non-filer of ITRs for immediately three preceding financial years. It was obviously impractical for banks, banking co-operative societies and post offices to verify the ITR filing track record of the account holder at the time of cash withdrawal to enforce this punitive measure of TDS intended to disincentivise non-filing/belated filing of ITRs. Therefore, ITA 2025 omits the first proviso.
See items 13 to 15 below as they also will reduce TDS deduction workload for TDS deductors.
II. TDS made less tedious by Income-tax Act, 2025 (ITA 2025) for deductees of TDS (payees or recipients of amounts)/collectees of TCS
12. Code on Wages fortifies section 205/section 401 protection to salaried taxpayers
New sub-section (4) in section 18 of COW 2019 provides that where any deduction is made by the employer from the wages of an employee under this section but not deposited in the account of the trust or Government fund or any other account, as required under the provisions of the law for the time being in force, such employee shall not be held responsible for such default of the employer in depositing the same with Trust/Government Fund or any other account. Thus, the provisions of section 205 of ITA 1961 (as it existed till 31-03-2026)/section 401 of ITA 2025 have received greater legal force from section 18(4) of COW 2019 in respect of TDS deducted by the employer from the salaries of employees but
