Taxpayers are mostly responsible for calculating, paying, and reporting their own taxes under India’s GST system. Although this self-assessment approach is intended to make things easier and faster, there must be security measures in place for everything to function properly. GST audits serve as that protection. The government uses them to ensure that companies maintain integrity and compliance.

Turnover-Based (Annual Reconciliation)

In the current 2025-26 framework, businesses with sales above ₹2 crore must file an annual return in GSTR-9. If your business crosses the ₹5 crore turnover mark, you must also file a reconciliation statement in GSTR-9C.

The process has become more integrated with the Invoice Management System (IMS). This system tracks which invoices you accepted throughout the year to ensure your Input Tax Credit (ITC) matches your supplier’s records. While self-certification is common, businesses crossing high thresholds often now seek professional certification to align with the new Form No. 26 requirements under the Income Tax Act 2025.

Key Points:

• Applies to businesses with turnover above ₹2 crore for GSTR-9.
• GSTR-9C is mandatory for turnover above ₹5 crore.
• Uses IMS data to auto-populate and verify ITC claims.
• Focuses on matching GST returns with the audited financial books.

Departmental Audit (Section 65)

This audit is conducted by tax officers, usually at the direction of the GST Commissioner. The business gets at least 15 working days’ written notice before the audit begins through Form GST ADT-01.

The audit can happen at your office or at the GST department. Usually, it is over within three months, but in complex cases, the Commissioner may extend it by an additional six months. After the process, the findings are sent to you in Form GST ADT-04. This report highlights any mistakes, missing tax payments, or wrongly claimed credits.

Why It Matters:

• Ensures taxes and ITC claims match actual business activity.
• Flags bad bookkeeping or attempts to dodge taxes.
• Allows officers to initiate recovery under Section 73, 74, or the newer Section 74A.

Special Audit (Section 66)

This audit is only ordered when there is a strong reason to suspect the value of tax has not been correctly declared or the credit availed is out of normal limits. The GST Commissioner will order the audit, and a CA or CMA chosen by the authorities carries it out.

The nominated auditor reports back within 90 days, though this can be extended to 180 days. You will have a chance to respond to any irregularities before any penalties begin. If the audit proves there is fraud or hidden sales, the department can begin steps to recover lost revenue or even prosecute.

Why This Audit Happens:

• Used for serious cases like suspected tax fraud or highly complex transactions.
• An independent expert reviews the situation for the tax department.
• The cost of this audit is paid for by the government, not the taxpayer.

Audit Type	Conducted By	When	Duration	Main Focus
Annual Reconciliation	Taxpayer / Professional	Sales > ₹2cr (GSTR-9) / ₹5cr (GSTR-9C)	Annual	Books vs. Returns
Departmental Audit	GST Department	Selected based on risk	3-9 Months	General Compliance
Special Audit	Govt. Appointed CA/CMA	Suspicious or complex cases	90-180 Days	Fraud Investigation

Conclusion

GST audits are important for maintaining the fairness of India’s tax system. The approach saves time for honest taxpayers by emphasising self-assessment and IMS-based data for the majority of enterprises. However, department-led and special audits continue to be efficient methods for identifying significant errors. In the present digital era of the 2025–2026 tax regime, being aware of these audits allows you to operate your business clearly and gain the assurance of tax authorities.

Every company that employs a director, a lawyer, an IT consultant, or a chartered accountant eventually has to pay professional or technical fees. The law mandates that a small sum be deducted and paid with the government prior to the payment reaching the person receiving it. This deduction, known as tax deducted at source, or TDS, is now covered by Section 393 of the Income Tax Act, 2025 for professional and technical fees.

This provision was governed by Section 194J of the previous Income Tax Act, 1961, until March 31, 2026. Along with a number of other TDS provisions, it was combined into Section 393 of the new Act on April 1st, 2026. The rates and thresholds haven’t changed, but the section number, payment codes, and a few forms have. It’s important to get the categorisation and rate correct because a mistake here could result in unwanted notices and disallowed expenses.

Who Is Required to Deduct TDS?

Not everyone making a payment for professional or technical services has to deduct TDS. The obligation applies to:

• Companies, partnership firms, and LLPs
• Co-operative societies and local authorities
• Government departments and bodies set up under law
• Trusts, universities, and educational institutions
• Individuals or HUFs whose turnover crossed Rs 1 crore (business) or Rs 50 lakh (profession) in the previous financial year

If your turnover crossed these limits in FY 2025-26, you must deduct TDS on professional and technical payments through FY 2026-27. Individuals paying for purely personal services, like a doctor’s visit for a family member, don’t need to deduct TDS even if their income is high.

Rates and the Threshold Limit

Section 393 applies different rates depending on the nature of the payment. Professional fees, paid to a chartered accountant, lawyer, doctor, architect, or engineer, attract TDS at 10%. Technical fees, covering managerial, technical, or consultancy services that aren’t tied to a recognised profession, attract a lower rate of 2%. Royalty payments and non-compete fees are taxed at 10% as well.

The threshold for deduction is Rs 50,000 per payee, per financial year. This limit is calculated separately for each category, professional fees, technical fees, and royalty aren’t added together. So if you pay someone Rs 40,000 as technical fees and Rs 45,000 as professional fees in the same year, no TDS applies to either, since each stays under its own limit. Once a category crosses Rs 50,000, TDS applies to every payment in that category from that point on, not just the amount above the threshold.

Director remuneration works differently. Sitting fees, commission, or any non-salary payment to a director attracts TDS at 10% right from the first rupee, with no threshold at all. If a payee hasn’t shared their PAN, the rate jumps to 20% regardless of the payment type.

Software and Filing Compliance

Payments made for the right to use computer software, such as annual licence fees for accounting or ERP tools, are treated as royalty and taxed at 10% once they cross the Rs 50,000 mark. Custom software development, where a developer is paid to write code, usually falls under technical or professional fees instead, depending on how the service is classified.

On the compliance side, TDS must be deposited by the 7th of the month following deduction, except for March, where the deadline extends to April 30th. Deductors also need to file quarterly returns and issue TDS certificates to payees within the prescribed time. Missing a deduction isn’t just a compliance gap, it can lead to 30% of the payment being disallowed as a business expense, along with monthly interest and a penalty equal to the TDS amount.

Conclusion

The essential compliance work has not significantly changed because Section 393 maintains the same rates and thresholds that companies were used to under the previous Section 194J. The forms associated with certificates, the payment codes used in refunds, and the section reference have all changed. Businesses should avoid the fines related to misclassification or missed deductions and ensure a seamless transition by updating their systems and maintaining a clear, category-wise record of payments.

Taxpayers frequently face cash flow issues as a result of tax deducted at source, or TDS. Before releasing your income, the payer deducts tax, which occasionally exceeds your real tax obligation. When that occurs, the government keeps your money until you request a refund, which can take many months to process.

This can be handled in a more straightforward manner. Eligible taxpayers may request a certificate from the Income Tax Department that provides a reduced or zero TDS deduction. Form 13 was the previous name for this filing, which was submitted in accordance with Section 197 of the Income Tax Act of 1961. This same application has been renamed as Form 128, filed under Section 395, effective of April 1, 2026, in accordance with the Income Tax Act, 2025. The terms have changed, but the objective and procedure are essentially the same.

Who Can Apply for This Certificate

Any person whose actual tax liability is lower than the TDS being deducted can apply. This includes individuals, freelancers, contractors, businesses, and non-resident Indians. The income should fall under specific categories such as salary, interest, rent, professional fees, commission, or capital gains. Common applicants include:

• Property sellers, especially NRIs, who face TDS on the full sale value instead of the actual profit
• Freelancers and consultants receiving professional fees
• Individuals earning interest, dividend, or rental income
• Businesses expecting lower taxable profit than the TDS rate suggests

If your estimated tax for the year justifies a lower rate, you can apply anytime during the financial year. There’s no fixed deadline, but applying early helps cover the full year’s income, since TDS gets deducted as income accrues.

Documents and Filing Process

Filing Form 128 requires proper documentation to support your claim. Keep these ready before you start:

• PAN card and tax deduction account details of the payer
• Financial statements and audit reports for the previous three years
• Income tax returns and assessment orders for the same period
• An estimated profit and loss statement for the current year
• Details of any past TDS defaults, if applicable

The application is filed electronically through the TRACES portal. Once submitted, the jurisdictional assessing officer reviews the details and may ask for clarification before approving or rejecting it. Form 128 also groups applicants into categories, and the annexures you attach depend on which category fits your case, for instance, whether the payer’s details are known or whether the number of payers exceeds a hundred.

Steps to Apply Online

Applying online keeps the process quick and traceable. Here’s how it works:

1. Log into the TRACES portal and select the option to submit a new request.
2. Choose Form 128 (shown alongside its earlier name, Form 13, on most portals for now).
3. Fill in your applicant details, income particulars, and existing tax credits.
4. Attach the required financial documents and supporting evidence.
5. Submit the form and note the acknowledgment number generated.

Once approved, the certificate specifies the rate at which tax should be deducted, or confirms that no deduction is needed. This certificate is valid for the financial year mentioned in it, unless the Assessing Officer cancels it earlier. You then share a copy with your payer so they can adjust the deduction accordingly.

Conclusion

With a lower or zero TDS certificate, you can avoid excessive deductions and keep your working capital free rather than locked up in a refund claim. This application is now known as Form 128 due to the implementation of the Income Tax Act, 2025; however, the fundamental advantage for taxpayers remains the same. Applying early in the financial year gives you the best opportunity of faster processing and prompt relief from excess TDS if your income qualifies.

A key component of properly managing your taxes is controlling interest income from savings accounts, fixed deposits, and recurring deposits. Banks and other financial institutions typically deduct tax at source, or TDS, if your interest exceeds the specified maximum. However, you can avoid that deduction by filing Form 15G or Form 15H if your annual total income remains below the taxable limit.

Understanding Eligibility and Important Differences

These forms act as a declaration to the bank that it should not deduct TDS from your interest income in certain situations. They serve the same basic purpose, but they apply to different taxpayers.

Form 15G: It is for individuals below 60 years of age and for Hindu Undivided Families (HUFs). You can submit it only if your estimated total income for the financial year stays below the basic exemption limit and you meet the other required conditions.

Form 15H: It is for senior citizens, meaning people who are 60 years or older. The income condition still applies, but this form is meant only for senior citizens. Both forms are available only to residents, so non-residents cannot use them.

You should always give correct and complete information while filing these forms. A wrong declaration can create serious problems under the Income Tax Act, including penalties and, in some cases, imprisonment.

How to File the Form

Whenever possible, you should file Form 15G or Form 15H at the start of the financial year. This helps the bank in preventing TDS before it begins. Consider it as informing the bank of your tax situation ahead of time to prevent needless tax deductions.

Here’s how to submit it:

• Collect the appropriate form via your bank’s portal or the Income Tax Department’s website.
• Enter your name, PAN, residential status, and contact information precisely as they are on file.
• Mention how much you anticipate earning overall during the financial year.
• A self-attested copy of your PAN card should be attached.
• Fill out the form and send it to your bank or financial institution online or offline.
• As evidence of submission, keep the acknowledgement secure.

If your PAN is missing or invalid, the bank will usually deduct TDS at a higher rate. So it’s always better to check that detail before submitting the form.

If You Miss the Deadline

Don’t worry if you fail to fill in the form before the bank takes TDS. The bank may cease deducting TDS for the remaining period of the year, but you can still submit it later. You can file your income tax return after the financial year concludes to get a refund if the bank has already deducted tax. People frequently become confused at this point. A late filing does not totally revoke the benefit. It simply indicates that you may have already paid some taxes, which you will need to recover later through your return.

Conclusion

Forms 15G and 15H help eligible taxpayers avoid unnecessary TDS on interest income. If your total income stays below the taxable limit, filing the right form on time can save you from avoidable deductions and future refund work. The main thing is simple: check your eligibility, fill in the details correctly, and submit the form early.

Every company that employs a director, a lawyer, an IT consultant, or a chartered accountant eventually has to pay professional or technical fees. The law mandates that a small sum be deducted and paid with the government prior to the payment reaching the person receiving it. This deduction, known as tax deducted at source, or TDS, is now covered by Section 393 of the Income Tax Act, 2025 for professional and technical fees.

This provision was governed by Section 194J of the previous Income Tax Act, 1961, until March 31, 2026. Along with a number of other TDS provisions, it was combined into Section 393 of the new Act on April 1st, 2026. The rates and thresholds haven’t changed, but the section number, payment codes, and a few forms have. It’s important to get the categorisation and rate correct because a mistake here could result in unwanted notices and disallowed expenses.

Who Is Required to Deduct TDS?

Not everyone making a payment for professional or technical services has to deduct TDS. The obligation applies to:

• Companies, partnership firms, and LLPs
• Co-operative societies and local authorities
• Government departments and bodies set up under law
• Trusts, universities, and educational institutions
• Individuals or HUFs whose turnover crossed Rs 1 crore (business) or Rs 50 lakh (profession) in the previous financial year

If your turnover crossed these limits in FY 2025-26, you must deduct TDS on professional and technical payments through FY 2026-27. Individuals paying for purely personal services, like a doctor’s visit for a family member, don’t need to deduct TDS even if their income is high.

Rates and the Threshold Limit

Section 393 applies different rates depending on the nature of the payment. Professional fees, paid to a chartered accountant, lawyer, doctor, architect, or engineer, attract TDS at 10%. Technical fees, covering managerial, technical, or consultancy services that aren’t tied to a recognised profession, attract a lower rate of 2%. Royalty payments and non-compete fees are taxed at 10% as well.

The threshold for deduction is Rs 50,000 per payee, per financial year. This limit is calculated separately for each category, professional fees, technical fees, and royalty aren’t added together. So if you pay someone Rs 40,000 as technical fees and Rs 45,000 as professional fees in the same year, no TDS applies to either, since each stays under its own limit. Once a category crosses Rs 50,000, TDS applies to every payment in that category from that point on, not just the amount above the threshold.

Director remuneration works differently. Sitting fees, commission, or any non-salary payment to a director attracts TDS at 10% right from the first rupee, with no threshold at all. If a payee hasn’t shared their PAN, the rate jumps to 20% regardless of the payment type.

Software and Filing Compliance

Payments made for the right to use computer software, such as annual licence fees for accounting or ERP tools, are treated as royalty and taxed at 10% once they cross the Rs 50,000 mark. Custom software development, where a developer is paid to write code, usually falls under technical or professional fees instead, depending on how the service is classified.

On the compliance side, TDS must be deposited by the 7th of the month following deduction, except for March, where the deadline extends to April 30th. Deductors also need to file quarterly returns and issue TDS certificates to payees within the prescribed time. Missing a deduction isn’t just a compliance gap, it can lead to 30% of the payment being disallowed as a business expense, along with monthly interest and a penalty equal to the TDS amount.

Conclusion

The essential compliance work has not significantly changed because Section 393 maintains the same rates and thresholds that companies were used to under the previous Section 194J. The forms associated with certificates, the payment codes used in refunds, and the section reference have all changed. Businesses should avoid the fines related to misclassification or missed deductions and ensure a seamless transition by updating their systems and maintaining a clear, category-wise record of payments.

A complete understanding of tax liabilities and credits is necessary for effective personal financial management. Form 26AS, which serves as a consolidated tax statement and provides a comprehensive summary of all tax transactions related to your PAN, is issued by the Income Tax Department of India. Verify that the taxes that were deducted from your income have been correctly deposited with the government before filing your income tax return.

The Importance of Verification

Form 26AS serves as proof of tax deducted at source. Employers, banks, and other financial institutions deduct TDS and file quarterly returns, which then reflect in your statement. When you verify these entries, you ensure that the TDS shown in your salary slips or interest certificates matches the government records. This reconciliation prevents discrepancies during the tax filing process and helps you claim the full tax credit you are entitled to. If there is a mismatch, it often indicates that a deductor failed to deposit the tax or made a filing error, allowing you to address the issue promptly.

How to Access and Review Your Statement

You can use your bank’s net banking service or the official income tax e-filing portal to view your tax credit statement. Take these easy steps to view it using the e-filing portal:

• Enter your password and PAN or Aadhaar to access the official Income Tax e-filing website.
• Click on View Form 26AS after choosing Income Tax Returns from the e-File option.
• Accept the agreements and click “Proceed” to confirm the redirection to the TRACES portal.
• To see or download the document, select the appropriate evaluation year and your preferred format (e.g., HTML or PDF).
• If you download the PDF, be aware that it is secured and often needs your date of birth in the format DDMMYYYY to open.

After you receive the document, thoroughly compare it to your own records. Verify the accuracy of the deductor information, particularly the TAN, and your personal information. Check your physical TDS certificates for any discrepancies in the amount or timing of the tax deposit.

Resolving Inconsistencies

The first thing to do is get in touch with the deductor, which might be your bank or company, if you see missing entries or wrong amounts. Ask them to check and correct any problems in their TDS return filings. It’s a good idea to write down your communications and subsequent actions. These problems are frequently the result of administrative hold-ups or small reporting mistakes that the deductor can correct by submitting an updated return. It is far simpler to find and fix these issues if you regularly check your Form 26AS during the financial year rather than waiting until the filing deadline.

Conclusion

For every taxpayer to guarantee tax compliance and make proper credit claims, Form 26AS is a crucial instrument. You can ease the preparation of your annual tax returns and keep control over your financial data by routinely checking this statement. By ensuring that your tax payments are accurately recorded, this proactive strategy not only saves time during the filing season but also gives peace of mind. Maintaining awareness of your tax status is essential to competent financial management and guarantees a more seamless interaction with tax authorities.

Businesses in India buy and sell products worth crores every day. Compliance for high-value trade has been simplified under the Income Tax Act, 2025, which went into effect on April 1, 2026. Section 393 imposes a 0.1% tax on purchases exceeding Rs 50 lakh when a buyer’s turnover exceeds Rs 10 crore. This emphasis on high-value transactions continues to be a fundamental compliance need for companies nationwide in order to determine their income promptly.

Important Guidelines and Requirements

Section 393 requires buyers to deduct taxes. This is applicable to any business that made more than Rs 10 crore in income in the previous tax year and buys more than Rs 50 lakh worth of products from a single resident vendor each year. The buyer is required to remove 0.1% of the amount over the Rs 50 lakh barrier upon credit or payment, whichever comes first. For this particular provision, there are no reduced or zero deduction certificates.

Important Aspects of Compliance

• Who Takes Action: The buyer whose turnover in the previous tax year exceeded Rs 10 crore.
• Threshold: Each seller’s total yearly purchase of Rs 50 lakh.
• Rate: 0.1% (if the vendor fails to provide a valid PAN, the rate rises to 5%).
• Timing: Either actual payment or credit to the seller’s account, whichever comes first.

“Goods” refers to movable items such as scrap, cars, and commodities. If GST is specified individually on the invoice, it is not included in the TDS basis.

Section 393’s implementation

Since the TCS provision under Section 206C(1H) was eliminated on April 1, 2025, the buyer is now fully responsible for ensuring that the sale of goods complies with tax laws. The compliance burden is greatly reduced because there is no longer a situation in which both TDS and TCS apply to the same transaction. No tax deduction is necessary under this clause if the acquisition is less than Rs 50 lakh or the buyer does not meet the Rs 10 crore turnover level.

Reporting and Compliance

• PAN: The transaction is subject to a 5% TDS charge if a PAN is not provided.
• Deposits: By the seventh of the next month (April 30 for the month of March), tax must be deposited via the electronic payment method (Challan 281).
• Returns: In accordance with the Income Tax Rules, 2026, buyers are required to file quarterly returns and provide the payees with the appropriate tax deduction certificates.

Exemptions and Useful Actions

These rules do not apply to some parties, such as government departments and entities that are exempt from income tax under the Act. Compliance is still simple:

• To determine applicability, check turnover from previous years in advance.
• Keep track of per-party purchase totals starting on April 1st, the first day of the tax year.
• To avoid increased deduction rates, obtain PANs up front.
• Accurately aggregate purchase values.

The buyer is considered an assessee-in-default and is subject to interest at a rate of 1% per month for late reductions and 1.5% for late deposits if they fail to deduct or deposit tax.

Conclusion

Section 393 compliance is required for the purchase of goods valued at more than Rs 50 lakh for businesses with a turnover of more than Rs 10 crore. The compliance environment has been simplified with the removal of the previous TCS rules, and the buyer now bears main accountability. To prevent validation issues during filing, make sure your accounting systems are updated to reflect the new section references under the Income Tax Act, 2025. Throughout the tax year, your company will have flawless tax compliance if you keep track of individual restrictions and keep correct records.

Quarterly TDS returns have carried the familiar names for years: Form 24Q, 26Q, 27Q, and 27EQ. That changed from 1st April 2026, when the Income Tax Act, 2025, came into force and renumbered every one of these forms. Those still using the old names in payroll templates or filing checklists need to update them, since returns submitted under old numbers for this period get rejected on validation.

What the New Forms Cover

Each old form now has a direct replacement, and the underlying purpose hasn’t changed:

• Form 24Q is now Form 138, used for TDS on salary payments.
• Form 26Q is now Form 140, used for TDS on non-salary payments to residents.
• Form 27Q is now Form 144, used for TDS on payments to non-residents.
• Form 27EQ is now Form 143, used for Tax Collected at Source.

For Q1 of FY 2026-27, covering April to June, all four returns share the same due date, 31st July 2026. This is a genuine change for TCS filers, who used to submit Form 27EQ two weeks earlier than the TDS returns. Under Form 143, that gap has closed, and TCS collectors now follow the same schedule as everyone else.

Filing the Return Correctly

Before you build the return, reconcile every TDS deposit made during the quarter against your bank challans, and confirm each one was tagged under Tax Year 2026-27 rather than the older Assessment Year format. A mismatch here can misallocate a payment to the wrong year’s records and create reconciliation trouble later.

It helps to work through the filing in order:

1. Confirm the correct form for each deduction category, Form 138 for salary, Form 140 for resident non-salary, Form 144 for non-resident payments, and Form 143 for TCS.
2. Verify the updated section code for every payment type against the current CBDT mapping, rather than relying on last year’s codes from memory.
3. Match deductee PAN details carefully, since PAN errors are a common reason for correction filings later on.
4. Generate the return file using an RPU or FVU utility version that supports the new form numbers.
5. Submit the return on the portal and save the acknowledgement once accepted.
6. Issue TDS certificates to deductees soon after filing. The salary certificate, earlier called Form 16, now goes by the name Form 130, though its content and purpose haven’t changed.

Penalties and a More Stringent Correction Window

Missing the due date still carries the same consequences as before. A late fee of Rs 200 per day applies under Section 234E, capped at the total TDS or TCS amount for that quarter, with no discretion to waive it once a return is filed late. Persistent or inaccurate filing can also draw a penalty ranging from Rs 10,000 to Rs 100,000 under Section 271H.

One more change worth noting, corrections to a filed statement, such as fixing a wrong PAN or an incorrect section code, must generally be made within two years from the end of the relevant financial year. Older statements with uncorrected errors may fall outside this window soon, so it’s worth clearing them up alongside your current filing.

Conclusion

Filing Q1 FY 2026-27 correctly is less about learning something new and more about updating labels, codes, and templates that stayed unchanged for years. Confirm the right form for each payment category, verify section codes against the current mapping, and reconcile your challans before the 31st July deadline. Getting this first quarter right makes every filing after it considerably smoother.

Residencial status of a person is the primary criteria that decides how foreign assets and income are taxed in India. Residents, resident but not ordinarily resident (RNOR), and non-residents (NRIs) are defined by the Income Tax Act, 2025. Each category specifies what information is required and how much of your overseas income is taxable.

Residential Status

A person is considered a Resident and Ordinarily Resident (ROR) if they stay in India for 182 days or more during the year or for 365 days or more during the previous four years along with at least 60 days in the current year. Additionally, Indian citizens with Indian income over 15 lakh rupees not taxed elsewhere are “deemed residents”.

• ROR: Taxable on total global income, including all foreign earnings.
• RNOR: Taxed only on income received or accrued in India or from a business controlled from India.
• NRI: Taxed only on income that arises or is received in India.

Taxation of Foreign Income

1. For RORs: Global income such as salary, dividends, capital gains, and business profits earned abroad is taxable in India as if earned domestically. However, they can claim foreign tax credit (FTC) for taxes paid abroad under India’s Double Taxation Avoidance Agreements (DTAAs).
2. For RNORs: Foreign income not received in India is generally not taxable. Only income sourced from India or a business set up in India is taxed. This status is vital for returning NRIs.
3. For NRIs: Only income that accrues, arises, or is received in India is taxable. Foreign salaries, rents, or investments held outside India are exempt from Indian taxation.

Taxation of Foreign Assets

Owning a foreign asset does not automatically create tax liability unless it generates income. Yet, residents (RORs) must disclose such assets every year in their income tax return under Schedule FA.

• Reportable Assets: These include foreign bank accounts, immovable property abroad, foreign company shares, and cryptocurrency wallets maintained on overseas exchanges.
• Disclosure Rules: Under the 2026 Budget updates, while non-disclosure can invite a penalty of 10 lakh rupees, prosecution is now waived for non-immovable assets valued below 20 lakh rupees if the error was unintentional.

Double Taxation Avoidance Agreement (DTAA)

When the same income is taxed in both India and another country, taxpayers can claim relief under DTAAs. The relief is given in two forms:

• Exemption method: Income taxed abroad is exempt in India.
• Credit method: Tax paid abroad is adjusted against Indian tax payable.

To claim credit, one must submit Form 44 (formerly Form 67) before filing the return and maintain proof of taxes paid abroad. This data is now integrated into the Form 168 (Unified AIS) for easier verification.

The Black Money Act and Penalties

The Black Money (Undisclosed Foreign Income and Assets) Act, 2015, remains the primary tool against hidden offshore wealth. It covers:

• A fixed 30% tax on unreported foreign income or assets.
• A penalty equal to three times the tax amount.
• The FAST-DS 2026 Scheme: A new 6-month window allows taxpayers to declare old undisclosed assets below 1 crore rupees with a specialised tax and fee structure to gain immunity from prosecution.

Under the Income Tax Act 2025

The Income Tax Act 2025, in force since April 1, 2026, continues the concept of global taxation for residents while enhancing digital compliance. It utilises automated verification through the Common Reporting Standard (CRS) to check foreign holdings. The new law has simplified Schedule FA and made digital record-keeping for foreign tax credits more robust. Special provisions also exist for returning NRIs to prevent double taxation during their transition year.

Conclusion

Residency is the basis for India’s tax system. RNORs are partially liable, residents are taxed on their worldwide income, while NRIs are only taxed on income earned in India. Foreign assets must be declared in order to avoid hefty penalties, even if they are not necessarily taxable. The law promotes truthful reporting through Form 44 and DTAA benefits to prevent double taxation. Your foreign assets and income are taken into account when calculating your taxes if you live in India and work overseas. Financial security depends on transparency and accurate filing under the Income Tax Act of 2025.

Every salaried employee looked forward to Form 16 at the beginning of the financial year for more than 60 years. It served as the foundation for each ITR file and verified the amount of tax that the employer had deducted and deposited. Form 130 will take its place under the Income Tax Act, 2025. Millions of salaried employees are affected by this change, so knowing when it applies and what it looks like may help avoid confusion when it does.

When Form 130 Is Really Important

It’s worth being precise here, since there’s often confusion about timing. Form 16 continues to apply for FY 2025-26, and employers must issue it by 15th June 2026, exactly as before. Form 130 comes into effect from Tax Year 2026-27, which runs from April 2026 to March 2027. The first Form 130 that employees receive will be issued by 15th June 2027, once this tax year closes. So salaried employees filing returns right now still work with Form 16, but TDS deducted from April 2026 onward is already being recorded under the new system that Form 130 will eventually reflect.

What Form 130 Looks Like

Form 130 is issued under Section 395(4)(b) of the Income Tax Act, 2025, and it serves the same core purpose as Form 16, certifying tax deducted from salary and deposited with the government. It also extends to pensioners and specified senior citizens who have authorised a bank to deduct tax on their interest income, a group Form 16 never fully covered.

Structurally, Form 130 has three parts instead of two:

• Part A carries employer and employee details, along with the employment period, a field that wasn’t explicitly required before.
• Part B summarises the income paid and TDS deducted, reconciled against the employer’s quarterly filings.
• Part C contains detailed annexures, covering salary computation, or pension and interest income for senior citizens

Like its predecessor, Form 130 can only be generated through the TRACES portal, and only after the employer has filed the corresponding quarterly TDS return, now called Form 138, which replaces the earlier Form 24Q. Any version issued outside TRACES isn’t considered valid.

What Employees Should Watch For

Even though Form 130 won’t arrive until mid-2027, a few practical points are worth keeping in mind as this transition unfolds:

• Confirm your employer is filing Form 138 correctly each quarter, since Form 130 depends entirely on this filing being accurate
• Watch for the new employment period field in Part A, especially if you changed jobs during the year
• Once issued, cross-check the TDS figures in Form 130 against Form 168, the new version of Form 26AS, sometimes called the Tax Passbook
• Any mismatch between the two documents should be resolved with the employer before filing the ITR, not after

Since the certificate is generated only after quarterly filings are processed, delays on the employer’s side can push back when you actually receive it, so it helps to raise queries early if your payroll team seems behind schedule.

Conclusion

Salaried employees still have one more filing season with the well-known Form 16 before the move fully takes effect, and Form 130 isn’t arriving overnight. The fundamental change, quarterly filings under Form 138, a wider reach that includes pensioners, and a more complex three-part structure that will influence how income and deductions are reported after Form 130 finally arrives in mid-2027 have already begun.