Old TDS Sections vs New: All Section Changes Under the Income Tax Act 2025

The Biggest TDS Structural Shift in 60 Years 

The New Income Tax Act, 2025 replaces the Income Tax Act, 1961 with a simplified legal framework that reorganizes and renumbers several provisions. One of the biggest areas of interest for taxpayers, businesses, finance professionals, and tax practitioners is the restructuring of Tax Deducted at Source, TDS section changes. The Income Tax Act 2025 restructure TDS sections as an initiative aims to simplify compliance by consolidating multiple provisions into a streamlined framework. While the TDS mechanism remains largely unchanged, the section numbers governing various TDS provisions have been reassigned, making it essential to understand how the old sections map to the new ones. 

Whether you deduct TDS on salaries, contractor payments, professional fees, rent, interest, dividends, or the purchase of immovable property, referring to the correct section under the New Income Tax Act, 2025 is critical for maintaining compliance, filing accurate returns, and avoiding reporting errors.  

By the time it was replaced, the TDS section list read like an alphabet soup: 192, 192A, 193, 194, 194A, 194B, 194BA, 194BB, 194C, 194D, 194DA, 194E, 194EE, 194G, 194H, 194I, 194IA, 194IB, 194IC, 194J, 194K, 194LA, 194M, 194N, 194-O, 194P, 194Q, 194R, 194S, 194T, 195 — each with its own rate, threshold, exception, amendment history, and circular trail. 

The new Income Tax Act, 2025, effective from 1 April 2026, collapses all of this into three parent sections. 

This guide compares old vs new TDS sections to help businesses quickly identify the revised provisions. 

Part 1: The New TDS Section Structure

What Are the New TDS Sections Under Income Tax Act 2025? (Old 192–194T vs New Section 392, 393, 394)

Old: 40+ scattered TDS sections. New: 3 parent TDS sections.

Category	Old Act (1961)	New Act (2025)
Salary TDS + PF Withdrawal	Sec 192, 192A	Section 392
All Other TDS (Residents, Non-Residents & Special Cases)	Sec 193 to 194T, 195	Section 393
Tax Collection at Source (TCS)	Sec 206C	Section 394

Within Section 393, payments are split into three sub-tables:

• Table 1 (Sec 393(1)) — Payments to residents (interest, rent, commission, contractors, professionals, dividends, etc.)
• Table 2 (Sec 393(2)) — Payments to non-residents and foreign companies
• Table 3 (Sec 393(3)) — Special category payments (winnings, lottery, partners of firms)

Each entry in the table has a serial number and a corresponding 4-digit payment code (1001 to 1067). This code now replaces old section references in TDS returns, challans, and TRACES filings.

Part 2: What are The New TDS Sections VS. Old TDS Sections

The following table summarizes all TDS section changes introduced under the New Income Tax Act 2025 and TDS section mapping that provides a side-by-side comparison of every old section with its corresponding provision under the New Income Tax Act, 2025.

Old Section (1961)	What It Covered	New Section (2025)	Payment Code
192	Salary	Sec 392(1)	1001, 1002, 1003
192A	PF premature withdrawal	Sec 392	1004
193	Interest on securities	Sec 393(1) Sl. 5(i)	1013
194	Dividend	Sec 393(1) Sl. 7	1018
194A	Interest (Bank/PO/others)	Sec 393(1) Sl. 5(ii)	1014
194B	Lottery winnings	Sec 393(3) Sl. 1	—
194BA	Online game winnings	Sec 393(3) Sl. 2	—
194BB	Horse race winnings	Sec 393(3) Sl. 3	—
194C	Contractor payments	Sec 393(1) Sl. 6(i)	1017
194D	Insurance commission	Sec 393(1) Sl. 1(i)	—
194DA	Life insurance maturity	Sec 393(1) Sl. 8(i)	—
194E	Non-resident sportsmen/entertainers	Sec 393(2)	—
194EE	NSS withdrawal	Sec 393(1)	—
194G	Commission on lottery tickets	Sec 393(3) Sl. 4	—
194H	Commission/brokerage	Sec 393(1) Sl. 1(ii)	—
194I(a)	Rent — Plant & Machinery	Sec 393(1) Sl. 2(ii)	—
194I(b)	Rent — Land, Building & Furniture	Sec 393(1) Sl. 2(ii)	—
194IA	Property purchase (buyer)	Sec 393(1) Sl. 3(i)	—
194IB	Rent — Individual/HUF (non-audit)	Sec 393(1) Sl. 2(i)	—
194IC	JDA payments	Sec 393(1) Sl. 3(ii)	—
194J	Professional / Technical Fees	Sec 393(1) Sl. 6(iii)	1020, 1021
194K	Mutual fund income	Sec 393(1)	—
194M	Contractor/Professional payments by Individual/HUF	Merged into Sec 393(1) Sl. 6(ii)	—
194N	Cash withdrawals	Sec 393(1)	—
194-O	E-commerce transactions	Sec 393(1)	—
194Q	Purchase of goods	Sec 393(1)	—
194R	Business perquisites/benefits	Sec 393(1)	—
194S	VDA (Crypto/Digital Assets)	Sec 393(1)	—
194T	Payments to firm partners	Sec 393(3) Sl. 7	—
195	Payments to non-residents	Sec 393(2)	—

Also, read – TDS rate chart FY 2026-27 in detail here

Part 3: All the TDS Forms Have Changed

This is where most businesses will feel the effect of TDS section changes day-to-day. Every major TDS form has been renamed and redesigned.

What are All the New TDS Return Forms (Quarterly Filings)

Purpose	Old Form	New Form	Key Change
Quarterly TDS — Salary	Form 24Q	Form 138	Major structural redesign
Quarterly TDS — Non-salary	Form 26Q	Form 140	Major structural redesign
Quarterly TDS — Non-residents	Form 27Q	Form 144	Major structural redesign
Quarterly TCS Return	Form 27EQ	Form 143	Major structural redesign
Property / Rent / JDA / Professional / VDA (One-off Transactions)	Form 26QB, Form 26QC, Form 26QD, Form 26QE (4 separate forms)	Form 141 (Single Consolidated Form)	4 forms merged into 1

The consolidation of 26QB, 26QC, 26QD, and 26QE into a single Form 141 is a significant simplification. Earlier, a taxpayer buying a property AND paying professional fees had to use two different forms. Now it is all one form with separate schedules.

New TDS Certificates under Income Tax Act 2025

Certificate For	Old Form	New Form	Change
Salary TDS Certificate (Annual)	Form 16	Form 130	More detailed structure, 3 parts, now includes pensioners
Non-Salary TDS Certificate	Form 16A	Form 131	Redesigned
TDS Certificate for Form 141 Transactions	Form 16B / 16C / 16D	Form 132	Multiple forms replaced by one
Annual Tax Credit Statement	Form 26AS	Form 168	Integrated with AIS, more detailed
Employee Investment Declaration	Form 12BB	Form 124	Renumbered

What this means for salaried employees: The Form 16 your employer gives you every June will now be called Form 130. Same purpose, new name, more detailed format. If your employer issues a document labelled “Form 16” for Tax Year 2026-27, that is technically non-compliant — the correct form is now Form 130.

What are The New Self-Declaration Forms Under Income Tax 2025 (15G and 15H)

Purpose	Old Form	New Form	Change
Declaration for Nil TDS (Individuals Below 60)	Form 15G	Form 121	Both merged into a single form
Declaration for Nil TDS (Senior Citizens)	Form 15H	Form 121	Both merged into a single form
Application for Lower/Nil Deduction	Form 13	Form 128	Renumbered
Foreign Remittance Declaration	Form 15CA	Form 145	Renumbered
CA Certificate for Foreign Remittance	Form 15CB	Form 146	Renumbered

The merger of Form 15G and Form 15H into a single Form 121 is an important simplification. Earlier, the age-based distinction meant that someone turning 60 mid-year had to manage both forms. Now a single form applies to everyone regardless of age. Additionally, payers must allot a 26-character Unique Identification Number to every Form 121 received — ensuring better tracking during assessments.

The old Form 15G and Form 15H are not valid for Tax Year 2026-27.

Part 4: Substantive (Non-Rate) Changes to TDS Provisions

Beyond section renaming and form renumbering, several actual compliance rules have changed.

1. Manpower Supply Services — Ambiguity Resolved

This was a long-running dispute in practice. Under the old Section 194C, TDS applied to “work” contracts. But whether deploying contract workers or providing labour supply services counted as “work” — or as a “service” under Section 194J — was genuinely unclear.

The new Act explicitly includes manpower supply as “work” under Section 393. This removes the ambiguity completely.

From 1 April 2026, TDS on manpower supply invoices must be deducted — at 1% for Individual/HUF contractors, 2% for others. Businesses that had been avoiding TDS on such invoices using the ambiguity defence must now deduct from the first payment of FY 2026-27.

2. Section 194M is Merged into the Main Contractor/Professional Clause

Under the old Act, Section 194M was introduced specifically to cover contractor and professional payments by individuals and HUFs not required to audit their accounts — who were otherwise outside the scope of 194C and 194J.

Under the new Act, this is seamlessly folded into Section 393(1) Sl. No. 6(ii). There is no need for a separate section. The obligation now flows naturally from the same table that applies to specified persons.

3. MACT Interest — Now Fully Exempt from TDS

Interest awarded by the Motor Accident Claims Tribunal (MACT) to a natural person is now fully exempt from tax under the Income Tax Act, 2025.

This means no TDS applies on such interest payments at all. Earlier, this interest was treated as taxable and TDS was deducted by insurance companies or courts before releasing compensation amounts. Many accident victims were unaware they could claim refunds. That problem ends from 1 April 2026.

4. CBDT Guidelines Now Binding on All Deductors

Under the new Act, CBDT (Central Board of Direct Taxes) circulars and guidelines are explicitly made binding on deductors — not just persuasive. This closes a long-standing gap where some large deductors would dispute the applicability of circulars in litigation.

5. NRI Property Purchase — PAN-Based TDS, No TAN Required

When a resident buys immovable property from a non-resident, the buyer is required to deduct TDS. Under the old system, this often required the buyer to obtain a Tax Deduction Account Number (TAN), which was cumbersome for one-off transactions.

Under the new Act, the buyer simply uses their PAN instead of TAN for such transactions — significantly reducing compliance friction in NRI property sales.

6. Form 141 — One Form Instead of Four

Earlier, TDS payments for the following required separate forms:

• Property purchase → Form 26QB
• Rent payment → Form 26QC
• JDA (Joint Development Agreement) → Form 26QD
• Professional fees → Form 26QE

From 1 April 2026, all four are handled through a single Form 141 with separate schedules. One form, one submission, one tracking number.

Part 5: The 4-Digit Payment Code System

Under the old TDS framework, filings referenced section numbers directly (e.g., Section 194C for contractors). Under the new framework, TDS challans and TRACES filings use numeric codes from 1001 to 1067, each corresponding to a specific row in the Section 393 table.

For example:

• What was Section 192 (salary) is now code 1001 (regular salary), 1002 (government employee salary), 1003 (salary advance)
• What was Section 194C (contractor) is now code 1017
• What was Section 194J (professional) is now 1020 (technical) or 1021 (professional)

This matters practically: If your accounting software, ERP, or TDS filing tool still uses the old section names in its dropdown menus, filings for payments made from 1 April 2026 onwards will trigger validation errors on the TRACES portal. A correction statement would then need to be filed.

Part 6: The TDS Compliance Checklist (What You Need to Do Now)

To comply with the latest TDS section changes, businesses should complete the following checklist.

For employers and payroll teams:

• Update payroll software to reference Section 392 instead of Section 192
• Collect fresh investment declarations from employees under the new Act’s section references
• Issue Form 130 (not Form 16) for Tax Year 2026-27 salary TDS certificates, by 15 June 2027

For accounts and finance teams:

• Update TDS filing software with new payment codes (1001–1067)
• Stop using old section references (194C, 194J, 194I, etc.) for any payment from 1 April 2026
• Use Form 141 for property, rent, JDA, professional, and VDA transactions (instead of 26QB/C/D/E)

For CAs and tax professionals:

• Q4 FY 2025-26 returns must be filed using old forms and old section references
• From Q1 FY 2026-27, file under the new system with new forms and new codes
• Ensure clients are advised that Form 15G and Form 15H are no longer valid — use Form 121 instead

For individuals:

• If you pay rent above ₹50,000/month, update your TDS challan process to use new section
• If you submit Form 15G or 15H at your bank, submit Form 121 from now on
• When you receive your annual TDS certificate, it should say Form 130 (salary) or Form 131 (other income)

Summary Table of TDS Section Changes: Old TDS Forms vs New TDS Forms at a Glance

Businesses should update their systems for the [SECONDARY] new TDS sections from April 2026 to avoid filing errors.

Old Form	New Form	What It Is
Form 16	Form 130	Salary TDS certificate
Form 16A	Form 131	Non-salary TDS certificate
Form 16B / 16C / 16D	Form 132	TDS certificate for one-off transactions
Form 24Q	Form 138	Quarterly TDS return (salary)
Form 26Q	Form 140	Quarterly TDS return (non-salary)
Form 26QB / 26QC / 26QD / 26QE	Form 141	TDS for property, rent, JDA, professional, VDA transactions
Form 27Q	Form 144	Quarterly TDS return (non-residents)
Form 27EQ	Form 143	Quarterly TCS return
Form 26AS	Form 168	Annual tax credit / information statement
Form 15G + Form 15H	Form 121	Nil TDS declaration (all ages, merged)
Form 13	Form 128	Application for lower/nil deduction certificate
Form 15CA	Form 145	Foreign remittance declaration
Form 15CB	Form 146	CA certificate for foreign remittance
Form 12BB	Form 124	Investment/deduction declaration by employee

These changes are among the biggest TDS & TCS Updates 2026 that taxpayers and deductors need to prepare for.

FAQs

The Bottom Line

The new Income Tax Act 2025 is a structural overhaul dressed up as a simplification exercise — and in many ways, it genuinely is simpler. But “simpler” does not mean “requires no action.” For every business, employer, and CA in India, there is a concrete transition to-do list.

The section numbers are gone. The old forms are gone. The old payment codes are gone. The new system is more logical and more automation-ready. But you have to make the switch — and make it accurately. Understanding these TDS section changes will help businesses update their payroll, ERP, and tax compliance processes before the new law becomes effective.