What services does PGT & Associates offer?

PGT & Associates offers Income Tax filing and planning, GST registration and returns, Statutory and Tax Audit, Company Registration, Transfer Pricing, International Taxation, ITAT representation, NCLT advocacy, M&A Advisory, and Project Finance.

Where is PGT & Associates located?

PGT & Associates is based at 308-309, Sahajanand Palace, 100 Feet Anand Nagar Road, Ahmedabad, Gujarat 380015, India.

How long has PGT & Associates been in practice?

PGT & Associates was established in 1996 by Dr. CA Pradeep Tulsian and has over 28 years of Chartered Accountancy practice experience.

How can I contact PGT & Associates?

Call +91-87994-99189 or email info@pgtandassociates.com. We offer a free initial consultation.

Does PGT & Associates handle GST notices and income tax notices?

Yes. PGT & Associates handles GST notices, income tax notices and demands, appeals before CIT(A), ITAT, GSTAT, NCLT, and GST/income tax litigation.

Does PGT & Associates offer CA articleship training?

Yes. PGT & Associates offers CA and CMA articleship training in Ahmedabad with hands-on exposure to Income Tax, GST, Audit, Company Law, and International Taxation.

Does PGT & Associates handle transfer pricing and international taxation?

Yes. PGT & Associates has a dedicated International Taxation and Transfer Pricing division handling Form 3CEB, APA, FEMA compliance, Form 15CA/15CB, and DTAA advisory.

Income Tax Act 2025: What Every Indian Taxpayer Must Know Right Now

shubhamtulsian05
4 days ago
4 min read

By Dr. CA Pradeep Tulsian, Founder & Managing Partner, PGT & Associates

India's tax landscape changed permanently on April 1, 2026. The Income Tax Act, 2025 came into force on that date, replacing the Income Tax Act, 1961, which had governed Indian direct taxation for over six decades. This is not a minor amendment. It is a comprehensive rewrite — consolidating provisions, renumbering sections, and streamlining the TDS and TCS framework in ways that affect every salaried employee, business owner, and NRI with Indian income.

August 2026 is the first major compliance checkpoint under the new law. If you are a taxpayer, an employer, or a business deducting TDS, you need to understand what has changed and what deadlines are approaching before August ends.

What the Income Tax Act, 2025 Actually Changed

The new Act does not change what is taxable. Your income slabs, the basic exemption limit, and the nature of taxable receipts remain substantially the same. What changed is the architecture of the law itself.

TDS and TCS: Consolidated and Renumbered

Under the 1961 Act, TDS provisions were spread across Sections 192 to 196D — dozens of separate sections, each governing a different type of payment. The 2025 Act consolidates all of this into three sections:

Section 392 — TDS on Salary
Section 393 — TDS on Non-Salary Payments
Section 394 — TCS (Tax Collected at Source)

This consolidation simplifies compliance for businesses, but it also means every form number has changed. The forms your accounts team has used for years are gone.

The New Form Numbers You Need to Know

Form 16 (salary TDS certificate) is now Form 130
Form 24Q (salary TDS return) is now Form 138
Form 26Q (non-salary TDS return) is now Form 140
Form 27Q (non-resident TDS return) is now Form 144
Form 27EQ (TCS return) is now Form 144A

If your payroll software or accounting system has not been updated to reflect these new form numbers, this is an urgent action item. Filing under old form numbers for periods beginning April 1, 2026 onwards will lead to defective return notices.

The Transition Rule: Which Act Applies to Your Payment?

The CBDT has clarified the transition rule as follows: the governing Act depends on when the payment or credit occurred, not on when the return is filed.

Payment or credit on or after April 1, 2026 — Income Tax Act, 2025 applies.
Payment or credit before April 1, 2026 — the 1961 Act still governs, even if the return is filed now.

This means businesses filing corrected or belated TDS returns for FY 2025-26 (periods before April 1, 2026) still use the old form numbers. Only returns for Q1 of FY 2026-27 (April to June 2026) and beyond require the new forms.

Critical August 2026 Deadlines

August 2026 carries several important compliance dates. Missing any of them attracts interest and penalties under the new Act.

August 7, 2026: Deposit TDS and TCS deducted/collected during July 2026.
August 15, 2026: Issue TDS/TCS certificates for Q1 (April to June 2026) — these are now issued under the new form numbers (Form 130 for salary).
August 30, 2026: File challan-cum-statements for tax deducted in July 2026 on property purchases, rent, and similar transactions.
August 31, 2026: Last date to file Income Tax Returns for AY 2026-27 for non-audit taxpayers, including non-audit businesses and trusts. This is also the extended deadline for certain declarations and forms under the new Act.

Penalties Under the New Act: Nothing Has Softened

One area where the 2025 Act offers no relief is penalties. The penalty regime is strict and largely mirrors what the 1961 Act prescribed:

Late TDS/TCS statement filing: Rs. 200 per day of delay.
Failure to deduct tax: 1% interest per month on the undeducted amount.
Failure to deposit deducted tax: 1.5% interest per month.
Late ITR filing fee: Rs. 1,000 if total income does not exceed Rs. 5 lakh; Rs. 5,000 in all other cases (for returns filed after August 31, 2026 but before December 31, 2026).

Practical Takeaways: What You Should Do Before August 31

File your ITR for AY 2026-27 before August 31 if you are a non-audit taxpayer. The late-filing fee kicks in from September 1.
Verify that your employer has issued your Form 130 (the new Form 16) for FY 2025-26 / Q1 2026-27. If you have not received it, follow up immediately — you need it to file accurately.
Update your payroll and accounting software. If it still references old section numbers (192, 194C, 194J, etc.) or old form numbers (24Q, 26Q, 27EQ), your vendor needs to push an update. Do not wait.
Businesses buying property or paying rent above threshold: ensure the challan-cum-statement for July 2026 deductions is filed by August 30.
If you or your business has outstanding TDS for July, deposit it by August 7 to avoid the 1.5% per month interest charge.
If your business is registered as a trust or non-audit entity, review any pending Form 10-IA or 3CT declarations — these are also due by August 31 under the new Act.

A Word on TCS Rate Changes

Two TCS rate changes under the 2025 Act deserve specific mention for businesses:

TCS on scrap and minerals is now a uniform 2%, replacing the earlier varied rates. Businesses in manufacturing and mining sectors should update their billing systems.
TCS on overseas tour packages is now a flat 2% across all package values. The tiered structure that applied different rates based on the package amount is gone. Travel agents and tour operators must apply this uniform rate from April 1, 2026.

Conclusion

The Income Tax Act, 2025 is a structural overhaul, not a conceptual departure. The tax base, the rates, and the fundamental obligations remain. What changed is how everything is organized, numbered, and reported. For taxpayers who stay current with the new form numbers and comply on time, this transition need not be disruptive.

For businesses carrying legacy processes and software tied to the old Act, August 2026 is the moment to catch up. The deadlines are real, the penalties are unchanged, and the tax department's enforcement machinery is fully operational under the new statute.

Have questions about your ITR filing, TDS obligations, or how the new Act applies to your specific situation? The team at PGT & Associates is here to help. Reach us at info@pgtandassociates.com or WhatsApp us at +91-87994-99189 for a consultation.