TDS & TCS Return Filing — On Time, Every Time

The IT Act 2025 replaces the IT Act, 1961 from April 1, 2026. For TDS/TCS, the key changes are: (1) New section numbers — Section 392 (salary TDS), Section 393 (all other TDS), Section 394 (TCS) replace the old 192–196D and 206C series. (2) New form numbers — Form 138 replaces 24Q, Form 140 replaces 26Q, Form 144 replaces 27Q. (3) New certificate forms — Form 130 replaces Form 16, Form 131 replaces Form 16A. (4) "Tax Year" replaces Previous Year + Assessment Year. Importantly, tax rates and due dates remain unchanged.

For Q4 FY 2025-26 (January–March 2026), use the old forms — 24Q and 26Q — even though you will be filing in May/June 2026. The governing law for those transactions (payments made up to 31 March 2026) is still the Income Tax Act, 1961. The new forms (138, 140) apply only to payments made from April 1, 2026 onwards under Tax Year 2026-27. Using new form numbers for Q4 FY 2025-26 returns will cause TRACES validation errors.

The old 194-series (194C, 194J, 194I, 194A etc.) is completely retired. Under IT Act 2025, all TDS is consolidated into three sections: Section 392 — Salary TDS (was Section 192); Section 393 — All other TDS on residents and non-residents, organised in a table format with numeric payment codes 1001–1067; Section 394 — All TCS provisions (was Section 206C). Using old section codes (like 194C) in challan or return filings for April 2026 transactions will trigger portal validation errors.

Any person or entity that deducts TDS — including employers, companies, LLPs, partnership firms, HUFs and individuals in certain cases — is required to file TDS returns quarterly. Having a valid TAN is mandatory. Under IT Act 2025, the obligation continues under Section 392 (salary) and Section 393 (other payments). The threshold limits for deduction remain the same.

The late filing fee of ₹200 per day continues under the new Act (equivalent of old Section 234E), charged from the due date until filing — capped at the total TDS amount. Additionally, a penalty of ₹10,000 to ₹1,00,000 may be imposed for failure to file within 1 year of the due date (equivalent of old Section 271H). Importantly, Sections 206AB and 206CCA (which imposed higher TDS on non-filers of ITR) have been removed in IT Act 2025, relieving a significant compliance burden on deductors.

Under IT Act 2025, the confusing terms "Previous Year" and "Assessment Year" are replaced by a single concept: Tax Year. Tax Year 2026-27 = April 1, 2026 to March 31, 2027. For TDS, this means Form 130 (new Form 16) will show "Tax Year 2026-27" instead of "Assessment Year 2027-28". All ERP, payroll, and TDS software must reference Tax Year for transactions from April 1, 2026 onwards. FY 2025-26 returns still reference the old Financial Year / Assessment Year terminology.

Under IT Act 2025, the salary TDS certificate is Form 130 (replacing old Form 16) and the non-salary TDS certificate is Form 131 (replacing old Form 16A). Once the quarterly return (Form 138 or 140) is filed and processed on TRACES, we download these certificates from the TRACES portal and send them to you via WhatsApp or email. They are digitally signed and ready to issue to your employees or deductees.

Yes. Correction returns can be filed under both old IT Act 1961 and new IT Act 2025 frameworks on TRACES. If there are errors in PAN, challan details, or TDS amounts, we file the correction. Our Annual Plan includes one correction return free. For single-quarter clients, correction returns are available at an additional charge. Please share the PRN of the original filing when requesting a correction.