TDS Under Income-tax Act, 2025: Sections 392 and 393 Guide
Understand TDS compliance under the Income-tax Act, 2025, including salary and non-salary deduction checks, certificates, returns, and reconciliation.
The Income-tax Act, 2025 consolidates and re-numbers TDS provisions. Sections 392 and 393 govern the deduction obligation — covering who must deduct, from which payments, at what threshold and rate, and through which return and certificate route. For deductors already familiar with the older Act, the substantive logic is broadly continuous, but the section references, form numbers, and compliance sequences have changed and need to be verified against notified provisions before filing.
This note is an educational guide. It is not a substitute for a case-specific CA review, particularly where non-resident vendors, special rates, or pending notices are involved.
What the new Act requires deductors to track
TDS is transaction-level compliance. Each payment carries its own identification chain: the payment type, the deductee, the applicable threshold, the rate, the deduction timing, the challan, the quarterly return, and the certificate issued to the deductee. Disrupting any link in that chain creates a mismatch that shows up either in the deductee's AIS credit or in a departmental query.
| Point | Practical meaning |
|---|---|
| 1 | TDS compliance should be reviewed by payment type and date. |
| 2 | Salary and non-salary deduction routes need separate records. |
| 3 | Deductors should reconcile challans, returns, certificates, and AIS credits. |
Why AY 2026-27 filing and current-period compliance can conflict
A deductor managing Tax Year 2026-27 ongoing compliance alongside AY 2026-27 return filings will encounter both old-Act and new-Act references in the same period. Salary TDS computed under the old Act for a March 2026 payroll and professional fees deducted under the new Act from April 2026 must each be placed correctly by period, section reference, and return form. Treating them as one bucket is a common source of return corrections.
A practical example
A company paying professional fees in April 2026 should identify the applicable provision under the Income-tax Act, 2025, confirm the rate and threshold under Sections 392 and 393, deduct the correct amount at the time of credit or payment (whichever is earlier), deposit the challan within the due date, file the quarterly TDS return for the correct period, and issue a TDS certificate to the vendor. The vendor's PAN and the invoice date both feed into the return filing and into what the vendor sees in Form 26AS.
Records to maintain
- Vendor invoice with payment date, nature of service, and PAN
- Residency confirmation where applicable (non-resident transactions have separate rate and return implications)
- TDS challan with BSR code, serial number, and deposit date
- Quarterly TDS return and filed acknowledgement
- TDS certificate issued to the vendor
Step-by-step checklist
- Identify whether TDS 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 errors deductors should watch for
- Referencing an old section number on a challan or return prepared for Tax Year 2026-27 without verifying the current notified form.
- Running AY 2026-27 correction returns and Tax Year 2026-27 original returns from the same working file without clear period separation.
- Reading a threshold or rate from the section heading and treating it as the final withholding amount, without factoring in applicable surcharge and cess.
- Filing or depositing before reconciling AIS credits, Form 26AS, challans, books, and TDS certificates.
- Not preserving the official source and computation note behind the rate and deduction amount applied.
How MyeCA helps
MyeCA helps deductors structure their TDS records by payment type and period, validate challan mapping, identify which sections of the Income-tax Act, 2025 apply to specific transactions, and prepare return-ready documentation. For complex transactions — non-resident vendors, large professional-fee payments, or multi-party structures — a CA-led review through MyeCA reduces the risk of notices and correction returns.
Final checklist
Confirm the applicable provisions under Sections 392 and 393 of the Income-tax Act, 2025. Collect payment records, PAN details, and residency confirmations. Prepare challan workings and match them against ledger entries. Verify the correct quarterly return form. File only after reconciling AIS, Form 26AS, and books. Preserve the full working paper set along with the portal acknowledgement.