TDS and TCS under the new Act: new sections, new forms

Withholding is where the renumbering will be felt fastest, because it is the part of the Act that touches routine monthly work rather than annual filing.

Certificates

Under the 1961 Act, TDS and TCS certificates were issued in the Form 16 series and Form 27D. Under the Income-tax Act, 2025 these fall under section 395(4), and are issued in a new series running from Form 130 to Form 133.

If your payroll or TDS software has not been updated, this is the point at which it will fail visibly — a certificate issued on a superseded form is not a small formatting problem when a deductee needs it for their own filing.

Lower and nil withholding

An application for a lower or nil deduction certificate was made under section 197 of the old Act, in Form 13. It now sits at section 395 of the new Act, applied for in Form 128 under the Income-tax Rules, 2026.

Anyone who applies annually — contractors, professionals with high receipts, non-residents receiving Indian-source income — should be filing on the new form. An application on the old form is not a defect that gets quietly overlooked.

Payments to non-residents

The withholding provision for payments to non-residents, familiar as section 195, corresponds to section 393(2) of the new Act. If you are remitting abroad, the certification and reporting around those remittances carries section references that need updating.

Practical position

The obligations have not become harder. Rates, thresholds and timing are substantially as they were. What has changed is every reference in the paperwork, and the risk in the first year is almost entirely administrative: right position, wrong form.

We are working through client TDS workflows form by form rather than assuming software vendors have covered everything. Where a deductor issues certificates in volume, that check is worth doing before the quarter closes rather than after.