Practical Approach to TDS and TCS under the Income-tax Act, 2025 | As Amended by the Finance Act, 2026

This comprehensive guide provides a practical understanding of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) under the Income-tax Act, 2025, updated with the latest amendments introduced by the Finance Act, 2026. Written in a simplified and application-oriented manner, the book is designed to help readers understand the complete framework of deduction, collection, deposit, reporting, and compliance requirements relating to TDS and TCS provisions in India.

The book explains a wide range of topics including TDS on insurance commission, brokerage, rent, immovable property transactions, contractor payments, professional and technical services, dividends, purchase of goods, life insurance payments, e-commerce transactions, virtual digital assets, and payments to non-residents. It also covers TCS provisions, procedural compliance, filing and processing of returns, consequences of default, certificates, audit mechanisms, and practical reporting requirements.

Special emphasis has been placed on practical implementation through chapter-wise explanations, updated legal references, procedural guidance, and compliance-focused discussions. The inclusion of provisions related to online gaming winnings, senior citizen taxation, business perquisites, and digital economy transactions makes the book highly relevant for current taxation practices.

The content is structured in a systematic manner to help readers navigate complex tax deduction and collection provisions with ease. Coverage of compliance mechanisms, audit checklists, and reporting procedures further enhances the utility of the book for day-to-day professional and business use.

This book will be useful for Chartered Accountants, tax practitioners, finance professionals, auditors, consultants, business owners, accounts executives, law students, commerce students, and individuals involved in taxation compliance and financial reporting who require practical and updated knowledge of TDS and TCS provisions in India.

Chapter B-1    TDS on Insurance Commission [(Sec 393(1) Table SI. 1(i) ITA 2025) (Sec 194D ITA 1961)]

Chapter B-2    Commission or Brokerage [(Sec 393(1) Table SI.1(ii) ITA 2025) (Sec 194H ITA 1961)]

Chapter B-3    TDS on Payment of Rent by Certain Individual/HUF [(Sec 393(1) Table S1.2(i) ITA 2025) (Sec 194IB ITA 1961)]

Chapter B-4    Rent [(Sec 393(1) Table Sl.2(ii) ITA 2025) (Sec 194I ITA 1961)]

Chapter B-5    TDS on Payment on Transfer of certain Immovable Property other than Agricultural Land [(Sec 393(1) Table SI.3(i) ITA 2025) (Sec 194-IA ITA 1961)]

Chapter B-6    TDS on Payment made under Specified Agreement [(Sec 393(1) Table SI.3(ii) ITA 2025) (Sec 194IC ITA 1961)]

Chapter B-7    TDS on Payment of Compensation on Acquisition of Certain Immovable Property [(Sec 393(1) Table SI.3(iii) ITA 2025) (Sec 194LA ITA 1961)]

Chapter B-8    Tax Deduction on Income from Mutual Fund Units [(Sec 393(1) Table SI.4(i) ITA 2025) (Sec 194K ITA 1961)]

Chapter B-9    TDS on Certain Income from Units of a Business Trust [(Sec 393(1) Table SI.4(ii) ITA 2025) (Sec 194LBA ITA 1961)]

Chapter B-10  TDS on Income of Units of Investment Fund [(Sec 393(1) Table SI.4(iii) ITA 2025) (Sec 194LBB ITA 1961)]

Chapter B-11  TDS on Income from Investment in Securitization Fund [(Sec 393(1) Table SI.4 (iv) ITA 2025) (Sec 194LBC ITA 1961)]

Chapter B-12  Interest on Securities [(Sec 393(1) Table SI.5(i) ITA 2025) (Sec 193 ITA 1961)]

Chapter B-13  Interest other than Interest on Securities [(Sec 393(1) Table SI.5(ii)(iii) ITA 2025) (Sec 194A ITA 1961)]

Chapter B-14  Payments to Contractors and Sub-Contractors [(Sec 393(1) Table SI.6(i) ITA 2025) (Sec 194C ITA 1961)]

Chapter B-15  TDS on Payments of Certain Sums by Individual and HUF [(Sec 393(1) Table SI.6(ii) ITA 2025) (Sec 194M 1961)]

Chapter B-16  Fees for Professional or Technical Services [(Sec 393(1) Table SI.6 ITA 2025) (Sec 194J ITA 1961)]

Chapter B-17  Dividends [(Sec 393(1) Table Sl.7 ITA 2025) (Sec 194 ITA 1961)]

Chapter B-18  TDS on Payment in respect of Life Insurance Policy [(Sec 393(1) Table SI.8(i) ITA 2025) (Sec 194DA ITA 1961)]

Chapter B-19  Deduction of Tax at Source on Purchase of Goods [(Sec. 393(1), Table Sl. No. 8(ii) ITA 2025) (Sec 194Q ITA 1961)]

Chapter B-20  Deduction of Tax by a Specified Bank in Case of Specified Senior Citizen [(Sec 393(1) Table Sl.8(iii) ITA 2025) (Sec 194P ITA 1961)]

Chapter B-21  TDS on Perquisites in respect of Business [(Sec 393(1) Table Sl.8(iv) ITA 2025) (Sec 194R ITA 1961)]

Chapter B-22  TDS on Payments made to e-Commerce Participants [(Sec 393(1) Table Sl.8(v) ITA 2025) (Sec 194O ITA 1961)]

Chapter B-23  Payment on Transfer of Virtual Digital Asset [(Sec 393(1) Table 8(vi) ITA 2025) (Sec 194S ITA 1961)]

Part C

Tax to be deducted at Source for Payments to Non-Residents

Chapter C-1    Payment to Non-Resident Sports Men or Sports Association [(Sec 393(2) ITA 2025 Table S. No 1) (Sec 194E ITA 1961)]

Chapter C-2    Income by way of Interest from an Indian Company or Business Trust [(Sec 393(2) ITA 2025 Table S. No 2-4) (Sec 194LC ITA 1961)]

Chapter C-3    TDS on Interest from Infrastructure Debt Fund [(Sec 393(2) ITA 2025 Table S. No 5) (Sec 194LB ITA 1961)]

Chapter C-4    TDS on certain Income from Units of a Business Trust [(Sec 393(2) ITA 2025 Table S. No 6-7) (Sec 194LBA ITA 1961)]

Chapter C-5    TDS on Income of Units of Investment Fund [(Sec 393(2) ITA 2025 Table S. No. 8) (Sec 194LBB ITA 1961)]

Chapter C-6    TDS on Income from Investment in Securitization Fund [(Sec 393(2) ITA 2025 Table S. No. 9) (Sec 194LBC ITA 1961)]

Chapter C-7    Income in respect of Units of Non-Residents [(Sec 393(2) Table S. No 10 ITA 2025) (Sec 196A ITA 1961)]

Chapter C-8    TDS on Income from Units [(Sec 393(2) Table S. No. 11-12 ITA 2025) (Sec 196B ITA 1961)]

Chapter C-9    TDS on Income from Foreign Currency Bonds or GDR [(Sec 393(2) ITA 2025 Table S. No. 13-14) (Sec 196C ITA 1961)]

Chapter C-10  TDS on Income of FII from Securities [(Sec 393(2) ITA 2025 Table S. No. 15-16) (Sec 196D ITA 1961)]

Chapter C-11  TDS on other sums payable to Non-Resident [(Sec 393(2) ITA 2025 Table S. No. 17) (Sec 195 ITA 1961)]

Part D

Tax to be deducted at source for Payments to any Person

Chapter D-1   Winnings from Lotteries or Crossword Puzzles [(Sec 393(1) Table SI.1 ITA 2025) (Sec 194B ITA 1961)]

Chapter D-2   Winnings from Online Games [(Sec 393(1) Table SI.2 ITA 2025) (Sec 194BA ITA 1961)]

Chapter D-3   Winnings from Horse Races [(Sec 393(1) Table Sl.3 ITA 2025) (Sec 194BB ITA 1961)]

Chapter D-4   Commission on Sale of Lottery Tickets [(Sec 393(1) Table Sl.4 ITA 2025) (Sec 194G ITA 1961)]

Chapter D-5   Cash Withdrawal [(Sec 393(1) Table Sl.5 ITA 2025) (Sec 194N ITA 1961)]

Chapter D-6   Payments in respect of NSS [(Sec. 393(3) (Table Sl. 6) ITA 2025) (Sec 194EE ITA 1961)]

Chapter D-7   Payments to Partners of Firms [(Sec 393(1) Table Sl.7 ITA 2025) (Sec 194T ITA 1961)]

Part E

                        Collection of Tax at Source                       

Part F

Procedural Mechanism for Deposit and Reporting of TDS and TCS      

Chapter F-1    Compliance and Reporting of TDS and TCS [Section 397 (erstwhile sections 203A, 206CA of ITA 1961)]

Chapter F-2    Processing of TDS and TCS Returns

Chapter F-3    Consequences for Failure to Deduct/Collect or Deposit TDS or TCS

Chapter F-4    Certificates (Sec 395)

Chapter F-5    Tax Deducted is Income Received (Sec 396)

Chapter F-6    Non-Deduction of TDS in Certain Cases

Part G

Mechanism for Examination of TDS/TCS Compliance in Tax Audit Report by Auditors

Chapter G-1   Checklist for Clause 34 of Tax Audit Report to be considered by Auditors