Is this TCS under the new Act guidance a substitute for filing advice?

No. It is an educational readiness note. Use the official portal and get case-specific CA review where facts, amounts, residency, or notices are complex.

Should I rely only on prefilled data?

No. Prefill is useful, but the return position should be matched with Form 16, AIS, Form 26AS, bank records, books, broker reports, challans, and working papers.

What should I preserve after taking a position?

Keep the official reference, computation note, supporting documents, portal acknowledgement, challans, and any professional review note in one folder.

TCS Under Income-tax Act, 2025: Section 394 Guide

A practical TCS guide for sellers and collectors under the new income-tax law, with records for collection, deposit, returns, and customer reconciliation.

This guide is written for Indian taxpayers, founders, finance teams, and return filers adjusting to the Income-tax Act, 2025 and Finance Act 2025 changes. It is an educational readiness note, not a promise of tax outcome, refund speed, or notice avoidance. Always match the position with the official portal, notified forms, and the taxpayer's own documents.

What changed

TCS is collected from a buyer or customer in specified cases. It should be configured in billing, ledger, tax deposit, and return systems before recurring transactions start.

Point	Practical meaning
1	TCS applies only where the collection rule fits the transaction.
2	Customer PAN, invoices, challans, and returns should reconcile.
3	TCS credits can affect customer AIS and return matching.

Why it matters now

The transition creates a year-selection problem. AY 2026-27 return work, Tax Year 2026-27 current compliance, old notices, and new forms can appear together in the same month. A clean file should show the period, law reference, portal form, payment or return type, and supporting evidence.

Practical example

A seller subject to TCS should verify transaction category, customer PAN, invoice narration, collection amount, challan, and customer credit reporting in one monthly review.

Records to keep

Customer master
Invoices
TCS challans
Return acknowledgement

Step-by-step checklist

Identify whether TCS compliance under the 2025 Act affects AY 2026-27 filing, Tax Year 2026-27 compliance, or both.
Read the official source and map the rule to your income head, taxpayer type, and dates.
Collect source records, computation notes, challans, statements, and declarations before filing or payment.
Check whether the position changes the ITR form, schedule, tax payment, TDS/TCS, or disclosure route.
Preserve the final return, acknowledgement, e-verification proof, and supporting working papers.

Official sources

Reference	Link
Income Tax Department - TDS compliance under 2025 Act	Open source
Income Tax Department - Income-tax Act, 2025 PDF	Open source
Income Tax Department - Forms under the 2025 Act	Open source

Common mistakes to avoid

Using a familiar old form number without checking the current official form.
Mixing AY 2026-27 filing records with Tax Year 2026-27 payment or TDS records.
Treating a headline slab, rebate, or threshold as the final computation.
Filing or paying before reconciling AIS, Form 26AS, challans, books, and certificates.
Not preserving the official source and computation note used for the decision.

How MyeCA helps

MyeCA helps taxpayers and businesses organize records, compare filing routes, prepare document checklists, review tax-credit mismatches, and decide when a CA-led review is useful before filing or responding.

Final checklist

Confirm the year, read the official source, collect supporting records, prepare a short computation note, check the return or payment route, and preserve acknowledgement proof after submission.