If there is one area where the Income Tax Act, 2025 delivers its biggest simplification, it is TDS. The old Act had 65 separate TDS/TCS sections — each with its own threshold, rate, and compliance requirements. The new Act consolidates everything into just three sections.
The New TDS Structure
- Section 392: TDS on Salary (replaces old Section 192)
- Section 393: TDS on all non-salary payments (replaces old 194A, 194C, 194H, 194I, 194J, 194Q, 194R, 194T, and dozens more)
- Section 394: TCS provisions (replaces old Section 206C)
Each payment type is now identified by a Serial Item (SI) entry and a new Payment Code within Section 393.
Key Old-to-New Mapping
Here are the most commonly used provisions and their new references:
- Contractors (Individual/HUF): Old 194C → New 393(1) SI.6(i), Payment Code 1023, Rate 1%
- Contractors (Others): Old 194C → Payment Code 1024, Rate 2%
- Professional Services: Old 194J → Payment Code 1027, Rate 10%
- Technical Services: Old 194J → Payment Code 1026, Rate 2%
- Rent (Land/Building): Old 194I(b) → Payment Code 1009, Rate 10%
- Commission/Brokerage: Old 194H → Payment Code 1006, Rate 2%
- Goods Purchase: Old 194Q → Payment Code 1031, Rate 0.1%
- Partnership Distribution: Old 194T → Payment Code 1067, Rate 10%
What Actually Changed (Not Just Renumbered)
Manpower supply services are now explicitly defined as "work" — ending the long-running 194C vs 194J ambiguity. This attracts 1%/2% TDS instead of the disputed 10%.
CBDT guidelines on TDS matters are now legally binding on deductors and tax authorities — not merely advisory.
Tax audit disclosures now require exact counts of unreported TDS/TCS transactions. The old yes/no checkbox approach is gone.
New Forms
- Form 16 → Form 130 (salary TDS certificate)
- Form 16A → Form 131 (non-salary TDS certificate)
- Form 24Q → Form 138 (quarterly TDS return)
The threshold limits remain largely unchanged — the Act is a structural recodification, not a rate overhaul. But every accounting software, ERP system, and TDS compliance template needs updating with the new section numbers, payment codes, and form references before July 2026.
Comments (5)
Printing the old-to-new mapping for the office. This is exactly the quick reference we needed.
CBDT guidelines being legally binding now is a massive change. No more "advisory only" arguments.
Payment codes are new to me. Every accounts team needs to update their Tally/ERP mappings ASAP.
Manpower supply finally classified as "work" — this ended so many disputes at one stroke.
65 sections down to 3. The consolidation alone justifies the new Act. Great reference table Karan.