Introduction: The Great Tax Migration
For over six decades, the Income-tax Act, 1961 served as the primary bedrock of Indian fiscal regulation. However, decades of incremental amendments, combined with the explosive growth of a complex digital economy, eventually necessitated a significant structural overhaul. This transition, brought about by the Finance Act, 2025, represents a modernization of the existing framework—a migration from a legacy system toward a streamlined, data-driven compliance environment.
For tax professionals and financial controllers, the most immediate challenge of this "Great Migration" is the retirement of familiar compliance landmarks. The long-standing numbering system for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) forms is being overhauled, replaced by a logical 138–144 series. As a strategist, it is essential to look beyond the surface level of these renumberings to understand the consolidated architecture that now governs reporting.
TDS Comparison
Old Income-tax Act, 1961 vs Income-tax Act, 2025
(Clause 393 – Table Based Framework)
As we all know, the Income-tax Act, 2025 removes the earlier section-wise TDS structure (like 194C, 194J, 194H etc.) and consolidates all deduction provisions into:
Clause 393 – TDS (Table Driven Structure)
Clause 394 – TCS (Table Driven Structure)
Each nature of payment is now governed through a Table Serial Number (Sl. No.), instead of separate sections.
Below is the perfected comparison.
1. Salary
|
Particular |
Old Act (Sec 192) |
New Act (Clause 393 – Salary Entry) |
|
Threshold |
Basic exemption slab |
Basic exemption slab |
|
Rate |
As per slab |
As per slab |
|
Timing |
At time of payment |
Same |
✔ No structural change except codification shift.
2. Interest on Securities
|
Particular |
Old Act (Sec 193) |
New Act (Clause 393 – Table Sl. No. 5) |
|
Threshold |
₹5,000 (listed securities – certain cases) |
Same |
|
Rate |
10% |
Rates in Force |
✔ “Rates in Force” concept introduced in place of fixed % in certain cases.
3. Dividend
|
Particular |
Old Act (Sec 194) |
New Act (Clause 393 – Table Sl. No. 1) |
|
Threshold |
₹5,000 |
₹10,000 |
|
Rate |
10% |
10% |
✔ Threshold enhanced.
4. Interest (Other than Securities)
|
Particular |
Old Act (Sec 194A) |
New Act (Clause 393 – Table) |
|
Threshold (General) |
₹5,000 |
₹5,000 |
|
Bank / PO |
₹40,000 |
₹40,000 |
|
Senior Citizens |
₹50,000 |
₹50,000 |
|
Rate |
10% |
10% |
✔ Threshold retained.
5. Contractor Payments
|
Particular |
Old Act (Sec 194C) |
New Act (Clause 393 – Table) |
|
Single Contract |
₹30,000 |
₹30,000 |
|
Aggregate |
₹1,00,000 |
₹1,00,000 |
|
Rate – Individual/HUF |
1% |
1% |
|
Rate – Others |
2% |
2% |
✔ No change except structural.
6. Commission / Brokerage
|
Particular |
Old Act (Sec 194H) |
New Act (Clause 393 – Table) |
|
Threshold |
₹15,000 |
₹20,000 |
|
Rate |
5% |
2% |
✔ Major rationalisation.
7. Professional / Technical Services
|
Particular |
Old Act (Sec 194J) |
New Act (Clause 393 – Table) |
|
Threshold |
₹30,000 |
₹50,000 |
|
Rate – Technical |
2% |
2% |
|
Rate – Professional |
10% |
10% |
|
Director Fees |
10% |
10% |
✔ Threshold increased.
8. Rent
|
Particular |
Old Act (Sec 194I) |
New Act (Clause 393 – Table) |
|
Threshold |
₹2,40,000 (annual) |
₹50,000 per month |
|
Plant & Machinery |
2% |
2% |
|
Land/Building |
10% |
10% |
✔ Monthly alignment introduced.
9. Purchase of Immovable Property
|
Particular |
Old Act (Sec 194IA) |
New Act (Clause 393 – Table) |
|
Threshold |
₹50 Lakh |
₹50 Lakh |
|
Rate |
1% |
1% |
✔ No change.
10. Purchase of Goods
|
Particular |
Old Act (Sec 194Q) |
New Act (Clause 393 – Table Sl. No. 8(ii)) |
|
Threshold |
₹50 Lakh |
₹50 Lakh |
|
Rate |
0.1% |
0.1% |
✔ TDS overrides TCS (Clause 394).
11. E-Commerce Operator
|
Particular |
Old Act (Sec 194O) |
New Act (Clause 393 – Table Sl. No. 8(v)) |
|
Threshold |
₹5 Lakh (Individual/HUF) |
₹5 Lakh |
|
Rate |
0.1% |
0.1% |
✔ No change.
12. Virtual Digital Assets
|
Particular |
Old Act (Sec 194S) |
New Act (Clause 393 – Table) |
|
Threshold |
₹10,000 / ₹50,000 |
Same |
|
Rate |
1% |
1% |
✔ No change.
13. Benefits / Perquisites
|
Particular |
Old Act (Sec 194R) |
New Act (Clause 393 – Table) |
|
Threshold |
₹20,000 |
₹20,000 |
|
Rate |
10% |
10% |
✔ No change.
14. Cash Withdrawal
|
Particular |
Old Act (Sec 194N) |
New Act (Clause 393 – Table) |
|
Threshold |
₹1 Crore |
₹1 Crore |
|
Rate |
2% |
|
|
Non-filers |
2% / 5% |
✔ Retained.
15. Lottery / Online Gaming
|
Particular |
Old Act (Sec 194B / 194BA) |
New Act (Clause 393 – Table) |
|
Threshold |
₹10,000 |
₹10,000 |
|
Rate |
30% |
30% |
✔ No change.
16. Insurance Commission
|
Particular |
Old Act (Sec 194D) |
New Act (Clause 393 – Table) |
|
Threshold |
₹15,000 |
₹20,000 |
|
Rate |
5% |
5% |
✔ Threshold aligned.
17. Non-Resident Payments
|
Particular |
Old Act (Sec 195) |
New Act (Clause 393 – Table) |
|
Threshold |
No minimum |
No minimum |
|
Rate |
Rates in Force |
Rates in Force |
✔ No structural change.
18. PAN Not Furnished
|
Old Act (Sec 206AA) |
New Act (Clause 393 + Compliance Clause) |
|
20% or applicable rate |
20% or applicable rate |
Compliance Mechanics (Same in Substance)
- Deduct at earlier of payment or credit
- Deposit by 7th of next month
- March – 30 April
- Interest 1% (non-deduction)
- Interest 1.5% (late deposit)
- Quarterly returns mandatory