With effect from 1 April 2026, the Income-tax Act, 2025, which received Presidential assent on 21 August 2025, has replaced the Income-tax Act, 1961 after more than six decades. The new law is essentially a restructuring and redrafting exercise. It is not a change in tax policy, and its stated objective is to make the statute shorter, clearer and easier to administer.

The New Act and the Old Act: A Comparison

Structure. The 1961 Act, amended repeatedly over 65 years, had grown to about 819 sections including inserted provisions. The 2025 Act contains 536 sections arranged in 23 chapters and 16 schedules, and its overall length is reported to be roughly half of the earlier text.

Terminology. The 1961 Act worked with two parallel concepts, the previous year in which income is earned and the assessment year in which it is taxed. The 2025 Act replaces both with a single Tax Year.

Drafting. Long provisos and explanations have given way to shorter sentences, tables and formulae. Income not forming part of total income has been moved to the schedules, deductions from salary have been tabulated at one place, and the expression “notwithstanding” has been replaced by “irrespective”.

Policy. No new tax has been introduced. Rates and slabs are unchanged, and both the new and the old tax regimes for individuals and Hindu undivided families continue.

Tax Year: The Most Visible Change

Under Section 3, a Tax Year is the twelve-month period of the financial year commencing on 1 April. The first Tax Year under the new Act is 2026-27. Income earned in that year is assessed after the year ends, exactly as previous year income was assessed in the following assessment year, but the reference to an assessment year no longer arises. One income now carries one year label, which removes a long-standing source of confusion, particularly in returns, notices and correspondence.

Transition: Where the 1961 Act Still Applies

Income up to Financial Year 2025-26 (Assessment Year 2026-27) continues to be governed by the 1961 Act, even where the return, audit or assessment is completed after 1 April 2026. Tax audit reports, Form 3CD, scrutiny assessments, rectifications and penalty proceedings for earlier years will therefore continue under the old provisions, subject to the savings clauses of the new Act. Professionals will have to work with both statutes in parallel for several years.

Regimes, Deductions and Renumbering

The new tax regime, introduced in 2020 and made the default regime in 2023, has been codified in the 2025 Act (Section 202 is the counterpart of Section 115BAC), while the old regime remains available as an option. The deduction framework of Chapter VI-A has been restructured, and almost every provision now carries a new section number. By way of illustration, the charging provision is Section 2, and the penalty for under-reporting of income, formerly Section 270A, appears as Section 295. The Department has made a mapping utility available, and it should be used when updating references in templates, checklists and client communication.

Advantages and Features of the New Law

Simplicity. A shorter text in plainer language, with tables and formulae in place of dense provisos, makes the law easier to read, apply and explain to clients.

Clarity of time concept. A single Tax Year aligned with the financial year removes the previous year and assessment year distinction.

Logical organisation. Related provisions have been consolidated into fewer chapters, so that a subject can be found in one place instead of being scattered across the Act.

Continuity. As there is no change in rates or policy, taxpayers face no additional burden, and settled interpretations of the substantive provisions are expected to remain useful.

Reduced scope for disputes. Clearer drafting should reduce disputes arising from ambiguity, although the courts will take time to settle the interpretation of the new language.

Modern compliance framework. The Act and the Income-tax Rules, 2026 are designed for a digital environment, and compliance is increasingly aligned with data available to the Department.

Practical Points for Professionals

Engagement letters, working papers, software and checklists should be updated to reflect Tax Year terminology and the new section numbers. Clients should be told which statute governs which year, since returns and audits for Financial Year 2025-26 will still be prepared under the 1961 Act. Advance tax planning for Tax Year 2026-27 should proceed on the basis of the new Act, with particular attention to the regime choice and to any provision whose wording has changed.

Concluding Remarks

The Income-tax Act, 2025 is a significant structural reform. It offers a cleaner and more readable statute without altering the tax burden, but its benefits will be realised only if taxpayers and professionals adapt promptly to the new terminology and numbering while continuing to apply the 1961 Act to earlier years.

Disclaimer: The information provided in this article is for general informational and educational purposes only and does not constitute tax, legal, financial, investment, accounting, or other professional advice. Laws, regulations, tax provisions, and financial information are subject to change and may vary based on individual circumstances. While every effort has been made to provide accurate and up-to-date information, readers should verify the applicable provisions and consult a qualified professional before making any decision or taking any action based on this content. TaxAcumen is not responsible for any loss or consequence arising from reliance on the information provided.

For businesses and professionals whose accounts are subject to audit under Section 44AB of the Income-tax Act, 1961, the filing of the tax audit report and the filing of the Income Tax Return (ITR) are two distinct statutory obligations, each with its own due date and its own consequences for default.

The Central Board of Direct Taxes (CBDT) has extended the due date for furnishing the tax audit report for Assessment Year (AY) 2026-27 from 30 September 2026 to 21 October 2026. The due date for filing the ITR in the corresponding audit cases has been extended from 31 October 2026 to 21 November 2026. Many taxpayers assume their responsibility ends once the books are handed to their chartered accountant. This is a misconception: the audit report is only the first step, and the ITR must still be filed on time.

Key Dates for AY 2026-27

Compliance	Due Date
Tax audit report (Forms 3CA/3CB and 3CD)	21 October 2026
ITR for taxpayers subject to audit	21 November 2026

The first two dates were extended by CBDT Circular No. 07/2026 dated 28 September 2026.

Understanding the Two Compliances

1.  Tax Audit Report (Forms 3CA/3CB and 3CD)

The report is prepared and signed by a chartered accountant. It certifies that the books of account have been maintained and examined, and it reports the particulars required under Form 3CD. These include compliance with provisions on tax deducted at source (TDS), payments to Micro and Small Enterprises (Section 43B(h)), loans and deposits, and the admissibility of specified expenses. The report must be uploaded on the Income Tax Department’s e-filing portal by the chartered accountant, and the taxpayer must then accept it on the portal before the due date.

2.  Income Tax Return

The ITR is the taxpayer’s own declaration of total income, tax liability, and taxes already paid. The figures reported must agree with the audited financial statements and with Form 3CD. The return must be filed separately after the audit report is uploaded, and it is not complete until it is electronically verified.

Why Both Deadlines Must Be Observed

a)  Separate and independent consequences of default

• Failure to furnish the audit report by the due date attracts a penalty under Section 271B of 0.5% of total sales, turnover or gross receipts, subject to a maximum of ₹1,50,000. Relief is available only where reasonable cause is established under Section 273B.
  • Failure to file the ITR on time attracts interest under Section 234A (1% per month or part of a month on unpaid tax) and a late filing fee under Section 234F (up to ₹5,000, or ₹1,000 where total

income does not exceed ₹5 lakh). A delayed return may also lead to loss of the right to carry forward certain losses and the denial of certain deductions.

b)  Consistency between the ITR and Form 3CD

Any mismatch in turnover, profit, deductions, or disallowances is likely to result in a defect notice under Section 139(9), an intimation with an adjustment, or a scrutiny assessment.

c)  Errors in the audit report must be corrected before filing

If any discrepancy is noticed in the uploaded report, the chartered accountant should be informed immediately so that a revised report can be furnished before the ITR is filed. This avoids defaults and inconsistent disclosures.

d)  The interval between the two dates is a safeguard, not extra time

The period between the two deadlines is meant for reviewing the audit findings, reconciling the data, and paying any self-assessment tax before the return is filed.

Action Plan for Taxpayers

Before 21 October 2026 (tax audit report)

1. Finalise and reconcile all books of account, including GST, TDS, loans, and balances with MSME creditors.
2. Provide your chartered accountant with complete records: bank statements, ledgers, the fixed asset register, related-party transaction details, and statutory returns.
3. Review the draft Form 3CD carefully, particularly the clauses on MSME payments, loans and deposits, TDS compliance, and disallowable expenses.
4. Accept the uploaded report on the e-filing portal without delay.

Before 21 November 2026 (ITR)

1. Confirm that the ITR figures agree with the audited accounts and Form 3CD.
2. Reconcile turnover, expenses, TDS credits, and advance tax with the Annual Information Statement (AIS), Form 26AS, and GST returns.
3. Pay any outstanding self-assessment tax, including interest, if applicable.
4. File the return and complete e-verification within the prescribed time.

Conclusion

The tax audit report and the ITR are separate compliances, and the extension of one does not relieve the taxpayer of the other. Treating them as a single, continuous process, with early completion of the audit report, leaves adequate time for review and reconciliation and reduces the risk of penalties, interest, and notices. Taxpayers are advised to engage with their chartered accountant well in advance of both due dates.

Disclaimer: The information provided in this article is for general informational and educational purposes only and does not constitute tax, legal, financial, investment, accounting, or other professional advice. Laws, regulations, tax provisions, and financial information are subject to change and may vary based on individual circumstances. While every effort has been made to provide accurate and up-to-date information, readers should verify the applicable provisions and consult a qualified professional before making any decision or taking any action based on this content. TaxAcumen is not responsible for any loss or consequence arising from reliance on the information provided.

The majority taxpayers believe that the procedure is completed after they submit their ITR through the portal. However, the return is only considered valid if it is e-verified within 30 days of the filing date. However, if you neglect or postpone verification, your return may be considered invalid, and you might face fines, delayed refunds, or even a notice from the Income Tax Department. You can stay out of trouble by being aware of the 30-day rule and its consequences.

Why E-Verification Is Required and How It Works

E-verification confirms that the information you submitted in your income tax return (ITR) is valid and that you have given your approval to it. If this step is not completed, the Income Tax Department may reject your return as legally filed. The department provides several options for carrying out the verification:

• Aadhaar OTP: The most popular approach is Aadhaar OTP. An OTP is sent to your registered phone number if your PAN is connected to Aadhaar.
• Internet Banking EVC: You can generate an Electronic Verification Code through your bank’s net banking page.
• Digital Signature Certificate (DSC): Companies, professionals, and taxpayers who already possess a Digital Signature Certificate (DSC) are the most common users.
• Demat Account EVC: To verify if your Demat account is linked, use CDSL or NSDL.
• ITR-V by Post: If online methods are unsuccessful, you have 30 days to send a signed physical copy of the ITR-V to the Centralised Processing Center (CPC) in Bengaluru.

The window has been reduced from 120 days to just 30 days for taxpayers to verify. This change increases the importance of timely verification.

What Happens If You Verify After 30 Days?

The filing date has been changed, but the return is still accepted if you verify your ITR after the 30-day period. The department uses the verification date as your actual filing date rather than the original submission date. This change may lead to a number of common issues:

• Late Filing Fee: You may be required to pay a late fee under Section 234F if your initial filing was made prior to the July 31 deadline but verification takes place after 30 days. If your income is less than ₹5 lakh, the cost is ₹1,000; if it exceeds, it is ₹5,000.
• Interest on Unpaid Tax: Section 234A adds interest from the due date until the verification date if you are owing tax and failed to pay it by the initial due date.
• Delayed Refunds: The refund processing will start only after verification. Your refund will be delayed, possibly by months, if the verification is delayed.
• Loss of Carry-Forward Benefits: You lose the option to carry forward business or capital losses (except from house property losses) if verification is made after the belated deadline of December 31.

For instance, the department will use September 5, 2026, as your filing date if you filed your ITR on July 28, 2026, but confirmed it on September 5, 2026. You lose the advantage of timely filing if this date is after July 31.

What Happens If You Completely Forget Verification?

Your ITR will be considered invalid if you do not verify it at all. You seem to have never filed. Penalties, interest on unpaid taxes, and notices for non-filing could arise from this. Under the Income Tax Act of 2025, the department may even start scrutiny or demand proceedings in certain circumstances.

Conclusion

E-verification is an important step. It is the last and required step in filing an ITR. A timely filed return may turn into a late one and incur fees, interest, and delays if the verification is not completed within 30 days. After filing your ITR, always check it right away. For quick validation, use Aadhaar OTP or Net Banking EVC. Send the ITR-V via speed post and save the tracking receipt if you face technical issues.You can avoid major problems later by taking a little step today.

How TaxAcumen Can Help

Navigating e-verification timelines and compliance rules under the Income Tax Act, 2025, doesn’t have to be overwhelming. At TaxAcumen, our experts ensure your returns are correctly filed, verified, and aligned with current regulations. Get in touch today to secure your financial standing.

Disclaimer: The information provided in this article is for general informational and educational purposes only and does not constitute tax, legal, financial, investment, accounting, or other professional advice. Laws, regulations, tax provisions, and financial information are subject to change and may vary based on individual circumstances. While every effort has been made to provide accurate and up-to-date information, readers should verify the applicable provisions and consult a qualified professional before making any decision or taking any action based on this content. TaxAcumen is not responsible for any loss or consequence arising from reliance on the information provided.

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.

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.

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.

Disclaimer: The information provided in this article is for general informational and educational purposes only and does not constitute tax, legal, financial, investment, accounting, or other professional advice. Laws, regulations, tax provisions, and financial information are subject to change and may vary based on individual circumstances. While every effort has been made to provide accurate and up-to-date information, readers should verify the applicable provisions and consult a qualified professional before making any decision or taking any action based on this content. TaxAcumen is not responsible for any loss or consequence arising from reliance on the information provided.

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 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.