New Income Tax Act, 2025: Key Changes to TDS Compliance The Indian government has introduced significant amendments to the Tax Deducted at Source (TDS) provisions under the New Income Tax Act, 2025, aimed at enhancing tax compliance and reducing evasion. These changes, effective from the financial year 2025-26, apply to various income types including salary, rent, interest, commissions, and professional services. The revised rules specify new section codes, reporting forms, and tax rates for different categories, ensuring a more structured approach to tax collection. Under the updated provisions, TDS on salary and provident fund (PF) withdrawals continues to be deducted at average slab rates for government and private employees. However, these are now reported under Section 392 using Form 138. For PF withdrawals exceeding Rs. 50,000, a 10% TDS is applicable under Section 392A, with details filed via Form 140. This ensures that tax is directly collected from income sources, minimizing the risk of underreporting. Commission payments, whether from insurance or other sectors, are now subject to a flat 2% TDS rate under Section 393(1), with a Rs. 20,000 threshold. Rent payments also see revised rules: individuals and Hindu Undivided Families (HUFs) must deduct 2% TDS if the monthly rent exceeds Rs. 50,000. Specified persons, such as companies or trusts, pay 2% TDS for plant and machinery rentals and 10% for building rentals. These obligations are reported using Form 140 or 141, depending on the payer type. Immovable property transactions have been brought under stricter scrutiny. Property transfers valued above Rs. 50 lakh attract a 1% TDS, while joint development agreements and compensation payouts are taxed at 10%.#indian_government #tax_deduction_at_source #new_income_tax_act_2025 #form_138 #form_140
