Accounting Financial

Section 393 of the Income Tax Act, 2025 – A Simplified Framework for TDS Provisions

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The introduction of the new Income-tax Act, 2025 has brought several structural changes to India’s taxation system. One of the most notable reforms is the consolidation of Tax Deducted at Source (TDS) provisions under a single section — Section 393.

Earlier, the Income-tax Act, 1961 contained multiple TDS sections such as 194A, 194C, 194H, 194J and many more. This often-made compliance difficult for taxpayers, businesses, accountants and deductors. To simplify the law and improve ease of reference, the government has now grouped most non-salary TDS provisions under one unified section.

🔍 What is Section 393?

Section 393 of the Income-tax Act, 2025 deals with deduction of tax at source on various non-salary payments. The section becomes applicable from 1 April 2026 and replaces several scattered TDS provisions that existed under the Income-tax Act, 1961.

The objective behind introducing this section is to:
• simplify tax compliance,
• create a uniform structure for TDS deductions,
• improve readability of the law,
• and allow easier addition of future TDS provisions without disturbing the sequence of sections.

The government has retained salary-related TDS provisions separately under Section 392, while Section 393 mainly governs non-salary transactions.

📅 Applicability of Section 393

Section 393 applies to transactions carried out on or after 1 April 2026. Any transaction completed before this date will continue to be governed by the provisions of the Income-tax Act, 1961.

The section broadly covers:

Payments made to residents
Payments made to non-residents
Certain common payments applicable to all taxpayers

This structure makes the law more organised and easier to interpret compared to the earlier framework.

🧾 Payments Covered Under Section 393

The section includes TDS provisions on a wide range of transactions. Some major categories are:

💼 1. Commission or Brokerage

TDS is applicable on commission and brokerage payments subject to prescribed limits and conditions.

🏠 2. Rent Payments

Rental income paid for land, building, machinery or equipment falls within the scope of Section 393.

🏢 3. Transfer of Immovable Property

TDS provisions relating to purchase or transfer of certain immovable properties are also covered.

💰 4. Interest Income

Interest on securities, bank deposits and other specified interest payments attract TDS under this section.

👨‍💼 5. Contractor and Professional Payments

Payments made to contractors, professionals and technical consultants are included under the consolidated TDS framework.

📈 6. Dividend Income

Dividend payments distributed by companies may require deduction of tax at source.

📊 7. Capital Market and Other Transactions

Income relating to mutual funds, securities and certain financial transactions are also included.

✅ Major Advantages of the New TDS Framework

✔️ Simplified Structure

Instead of remembering numerous TDS sections separately, taxpayers can now refer to a single umbrella provision.

✔️ Better Compliance

A consolidated system reduces confusion and minimises the risk of errors while deducting or depositing TDS.

✔️ Easier Future Amendments

The government can introduce new TDS categories without disturbing the numbering structure of the law.

✔️ Improved Accessibility

Professionals, businesses and taxpayers can understand TDS provisions more efficiently due to the tabular and organised format.

🚫 Important Exemptions Under Section 393

Although TDS generally applies once specified thresholds are crossed, the law also provides certain exemptions where tax deduction is not required.

Some important exemptions include:
• commission paid by telecom companies such as BSNL and MTNL to public call office franchisees,
• rent paid to specified REITs,
• exempt compensation received on compulsory acquisition of land,
• certain interest payments to banks, insurance companies and co-operative societies,
• specific contractor payments for personal purposes,
• dividend payments to specified insurance entities.

These exemptions help reduce unnecessary compliance burden in eligible cases.

📉 Nil or Lower TDS Deduction Facility

Section 393 also allows taxpayers to apply for deduction of tax at a lower rate or for nil deduction in eligible situations.

Under the new framework, taxpayers may submit the prescribed application electronically and obtain a certificate for lower or nil deduction of TDS. This benefit may apply to certain incomes such as:
• interest income,
• rent,
• dividend income,
• insurance commission,
• mutual fund income,
• life insurance policy proceeds,
• accumulated provident fund balance.

⏰ TDS Deduction Timing

The general rule under Section 393 states that TDS should be deducted at the earlier of:
• the time of credit of income to the payee’s account, or
• the time of actual payment.

This principle continues from the earlier tax regime and remains an important compliance requirement for deductors.

🔄 Transition from the Old Act to the New Act

Several existing TDS sections under the Income-tax Act, 1961 are now mapped into Section 393. For example:

Earlier Provision (1961 Act) New Provision (2025 Act)
Section 194A – Interest Section 393
Section 194C – Contractors Section 393
Section 194H – Commission Section 393
Section 194I – Rent Section 393
Section 194J – Professional Fees Section 393

This restructuring mainly changes the organisation of the law rather than the core TDS concept itself.

📋 TDS Rates and Threshold Limits Under Section 393
Nature of Payment TDS Rate Threshold Limit
Insurance Commission Rates in force ₹20,000
Commission or Brokerage 2% ₹20,000
Rent – Machinery/Plant/Equipment 2% ₹50,000 per month
Rent – Land/Building/Furniture 10% ₹50,000 per month
Transfer of Immovable Property 1% / 10% ₹50 lakh or specified limits
Income from Mutual Funds / Business Trust 10% ₹10,000
Interest on Securities Rates in force ₹10,000 onwards
Interest other than Securities Rates in force ₹10,000 to ₹1,00,000
Payments to Contractors 1% / 2% ₹30,000 single payment or ₹1,00,000 aggregate
Professional or Technical Fees 10% ₹50,000
Dividend Income 10% No basic threshold in certain cases
Purchase of Goods 0.1% ₹50 lakh
E-commerce Transactions 1% As prescribed
Virtual Digital Assets (Crypto etc.) 1% As prescribed
Lottery / Crossword Winnings Rates in force ₹10,000 per transaction
Online Gaming Winnings Rates in force As prescribed
Horse Race Winnings Rates in force ₹10,000 per transaction
Lottery Commission 2% ₹20,000
Cash Withdrawals 2% ₹1 crore / ₹3 crore (as applicable)
Payments to Partners (Salary, Interest, Bonus etc.) 10% ₹20,000

Note: “Rates in force” means the applicable rate prescribed under the Finance Act for the relevant financial year. Threshold limits and rates may also vary depending on PAN availability, residential status and specific conditions mentioned under the Act.

⚠️ Important Compliance Point

Under Section 393, TDS must generally be deducted at the earlier of:
• credit of income to the payee’s account, or
• actual payment.

This rule continues from the earlier TDS framework and remains one of the most important compliance requirements for deductors.

🏁 Conclusion

Income-tax Act, 2025 aims to make tax laws more structured, concise and user-friendly. Section 393 is a major step in that direction as it combines multiple non-salary TDS provisions into one comprehensive framework.

For businesses, finance professionals and taxpayers, this consolidation is expected to improve compliance efficiency and reduce confusion arising from multiple TDS sections. Although the fundamental principles of TDS remain largely unchanged, the new presentation and simplified structure may significantly enhance ease of understanding and implementation from FY 2026-27 onwards.

Section 123 of the Income Tax Act, 2025 – Detailed Guide to Tax Saving Deductions 

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The Income Tax Act, 2025 has introduced a revised structure for various provisions under the Indian taxation system. One of the most important changes for individual taxpayers is the replacement of Section 80C of the Income Tax Act, 1961 with Section 123 under the new Act.

Section 123 continues to provide deductions for specified investments, savings schemes, insurance premiums, and certain expenses incurred by taxpayers. Although the numbering and drafting style have changed under the Income Tax Act, 2025, the fundamental objective of encouraging long-term savings and disciplined financial planning remains unchanged.

For salaried individuals and small taxpayers, Section 123 is expected to remain one of the most widely used deduction provisions under the Income Tax Act, 2025.

📌 What is Section 123 of the Income Tax Act, 2025?

Section 123 of the Income Tax Act, 2025 allows eligible taxpayers to claim deductions from their gross total income for investments and payments made in approved financial instruments and schemes.

This section is broadly equivalent to Section 80C of the Income Tax Act, 1961. The government has reorganised and renumbered the provisions while retaining most of the existing tax benefits.

🎯 The purpose of Section 123 is to:

• Promote long-term savings habits
• Encourage retirement planning
• Increase participation in government-backed savings schemes
• Support life insurance and pension coverage
• Encourage investment in tax-saving instruments

👥 Who Can Claim Deduction Under Section 123?

The deduction under Section 123 can be claimed by:
• Individuals
• Hindu Undivided Families (HUFs)

Partnership firms, LLPs, and companies are generally not eligible to claim deductions under this section.

The deduction can be claimed only if the investment or payment has been made during the relevant financial year.

💵 Maximum Deduction Available Under Section 123

The maximum deduction allowed under Section 123 is:

✅ ₹1,50,000 per financial year

This overall limit includes all eligible investments and payments covered under the section.

For example:

Investment Type Amount Invested
PPF Contribution ₹50,000
ELSS Investment ₹40,000
Life Insurance Premium ₹35,000
Tax Saver FD ₹25,000
Total Deduction ₹1,50,000

Even if total eligible investments exceed ₹1.5 lakh, the deduction will be restricted to ₹1.5 lakh only.

🏦 Eligible Investments and Payments Under Section 123

Section 123 covers a wide range of tax-saving investments and expenses. Some of the major eligible deductions are explained below.

1️⃣ Public Provident Fund (PPF)

Contributions made to a PPF account qualify for deduction under Section 123.

🔹 Key features:

• Government-backed savings scheme
• Long-term investment option
• Interest earned is tax-free subject to applicable provisions
• Suitable for conservative investors

2️⃣ Employee Provident Fund (EPF)

Employee contributions to EPF are eligible for deduction under Section 123.

This is commonly claimed by salaried employees whose EPF deductions are automatically reflected in salary structures.

3️⃣ Life Insurance Premium 🛡️

Premium paid towards life insurance policies for:
• Self
• Spouse
• Children

is eligible for deduction subject to prescribed conditions.

The deduction is generally available only if the premium does not exceed the prescribed percentage of the sum assured.

4️⃣ Equity Linked Savings Scheme (ELSS) 📈

Investments made in ELSS mutual funds qualify for deduction under Section 123.

✨ Features of ELSS:

• Market-linked returns
• Shortest lock-in period among tax-saving instruments
• Potential for higher long-term returns

ELSS is preferred by taxpayers seeking equity exposure along with tax benefits.

5️⃣ National Savings Certificate (NSC) 📜

Investment in NSC issued by the government is also eligible for deduction.

It is considered a low-risk fixed-income investment option.

6️⃣ Sukanya Samriddhi Yojana (SSY) 👧

Deposits made in Sukanya Samriddhi accounts for girl children qualify for deduction under Section 123.

The scheme aims to encourage long-term savings for the education and marriage expenses of daughters.

7️⃣ Tax Saving Fixed Deposits 🏛️

Fixed deposits with a lock-in period of five years with scheduled banks are eligible for deduction.

These deposits provide guaranteed returns and are preferred by risk-averse taxpayers.

8️⃣ Home Loan Principal Repayment 🏠

Repayment of the principal amount of a housing loan qualifies for deduction under Section 123.

The deduction is available for:
• Purchase of residential property
• Construction of residential property

However, certain conditions regarding ownership and holding period must be satisfied.

9️⃣ Tuition Fees for Children 🎓

Tuition fees paid for full-time education of children in India are eligible for deduction.

The deduction is available for up to two children.

Only tuition fees qualify; expenses such as transportation, hostel fees, donations, and development charges are generally excluded.

🔟 Senior Citizens Savings Scheme (SCSS) 👴👵

Deposits made under SCSS are also eligible for deduction under Section 123.

This scheme is specifically designed for senior citizens and offers stable returns.

📚 Schedule XV Under the Income Tax Act, 2025

Under the Income Tax Act, 2025, many eligible deductions and investments have been shifted to schedules for easier reference.

The detailed list of investments eligible under Section 123 is now contained in:

📖 Schedule XV of the Income Tax Act, 2025

This structural change aims to simplify legal drafting and improve readability of the Act.

⚖️ Difference Between Section 80C and Section 123

Particulars Section 80C – Income Tax Act, 1961 Section 123 – Income Tax Act, 2025
Applicable Law Income Tax Act, 1961 Income Tax Act, 2025
Deduction Limit ₹1.5 lakh ₹1.5 lakh
Eligible Taxpayers Individuals & HUFs Individuals & HUFs
Nature of Benefit Tax-saving deduction Tax-saving deduction
Eligible Investments Mentioned in the section itself Referenced through Schedule XV
Objective Encourage savings Encourage savings

⚠️ Important Conditions for Claiming Deduction

Taxpayers should keep the following conditions in mind while claiming deduction under Section 123:

• Investments must be made during the relevant financial year
• Proper investment proofs and payment receipts should be maintained
• The total deduction cannot exceed ₹1.5 lakh
• Certain investments carry lock-in periods
• Early withdrawal from specified schemes may lead to reversal of benefits
• The deduction may not be available under certain tax regimes, subject to applicable provisions

📊 Tax Planning Benefits of Section 123

💸 Reducing Taxable Income

A deduction of ₹1.5 lakh can significantly reduce overall tax liability.

📈 Encouraging Long-Term Savings

Most eligible instruments promote disciplined financial planning.

👴 Building Retirement Corpus

Schemes like EPF, PPF, and SCSS support retirement security.

🧩 Diversifying Investments

Taxpayers can allocate funds across:
• Fixed income instruments
• Equity-linked investments
• Insurance products
• Government-backed schemes

❌ Common Mistakes Taxpayers Should Avoid

Some common issues while claiming deduction under Section 123 include:

• Claiming deduction for non-eligible payments
• Including registration charges or donations incorrectly
• Claiming tuition fees for more than two children
• Investing after the financial year-end
• Ignoring lock-in conditions
• Failing to maintain supporting documents

Careful documentation and timely investments can help avoid disputes during assessment or verification.

🏛️ Applicability of Section 123 Under the New Tax Regime

Taxpayers should carefully evaluate whether deductions under Section 123 are available under the tax regime they choose.

Under the new framework, certain deductions may not be available if the taxpayer opts for concessional tax regimes. Therefore, taxpayers should compare tax liability under both regimes before making investment decisions.

✅ Conclusion

Section 123 of the Income Tax Act, 2025 continues the legacy of Section 80C by providing deductions for a wide range of investments and savings instruments. While the section number and drafting structure have changed, the core tax-saving benefits remain substantially similar.

The provision continues to play an important role in tax planning for salaried individuals, professionals, and families by encouraging systematic savings, insurance coverage, retirement planning, and long-term wealth creation.

Taxpayers should understand the revised section references under the Income Tax Act, 2025 and maintain proper investment records to ensure smooth compliance and maximum tax benefits.

Income Tax Changes from April 2026: What Every Taxpayer Should Know

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The Indian taxation landscape is set for a major transformation starting 1st April 2026, with the introduction of the new Income Tax Act, 2025 and Income Tax Rules, 2026. These changes aim to simplify tax laws, improve compliance, and align tax provisions with current economic realities.

Let’s break down the key changes and their impact on taxpayers.

📘 Introduction of the New Income Tax Act, 2025

From April 2026, the existing Income Tax Act, 1961 will be replaced with a new, simplified tax law.

The objective is to:

  • Use clearer language
  • Remove outdated provisions
  • Reduce litigation and ambiguity

👉 This marks a complete overhaul of the tax framework, making it easier for taxpayers to understand and comply.

🔄 Shift from “Financial Year” to “Tax Year”

One of the most notable structural changes is the introduction of the “Tax Year” concept.

  • Replaces: Financial Year (FY) + Assessment Year (AY)
  • Purpose: Simplify terminology and reduce confusion

👉 This change will make tax timelines more intuitive for taxpayers.

💰 No Change in Tax Slabs

Despite major structural reforms, income tax slab rates remain unchanged for FY 2026–27.

Under the new tax regime:

  • Up to ₹4 lakh → Nil
  • ₹4–8 lakh → 5%
  • ₹8–12 lakh → 10%
  • ₹12–16 lakh → 15%
  • ₹16–20 lakh → 20%
  • ₹20–24 lakh → 25%
  • Above ₹24 lakh → 30%

👉 This ensures continuity while other reforms are implemented.

📈 Major Increase in Allowances & Perquisite Limits

A significant highlight of the 2026 rules is the revision of outdated exemption limits.

Key Changes:

  • Children education allowance: ₹100 → ₹3,000 per month
  • Hostel allowance: ₹300 → ₹9,000 per month
  • Meal benefits: ₹50 → ₹200 per meal
  • Gift exemption: ₹5,000 → ₹15,000 annually

Perquisite valuation (e.g., company car) has also been revised to reflect realistic market values.

👉 These changes make tax benefits more meaningful and inflation-adjusted.

🏙️ Expanded HRA Benefits

The scope of 50% HRA exemption has been extended to more cities, including:

  • Bengaluru
  • Pune
  • Hyderabad
  • Ahmedabad

Now, taxpayers in 8 major cities can claim higher HRA benefits.

Additionally, taxpayers must disclose their relationship with the landlord to prevent misuse.

📅 Changes in ITR Filing Deadlines

  • ITR-3 & ITR-4 (non-audit cases): Due date extended to 31st August
  • ITR-1 & ITR-2: Remains 31st July
  • Tax audit cases: Continue at 31st October

👉 This provides additional time for compliance for certain taxpayers.

🧾 Revamped Tax Forms

Several tax forms have been renumbered and restructured:

  • Form 16 → Form 130
  • Form 16A → Form 131
  • Form 12BB → Form 124
  • Form 26AS → Form 168

👉 These updates are part of a broader effort to standardize and modernize tax reporting.

⚙️ Other Key Changes

  • Updated TDS/TCS provisions and compliance requirements
  • Changes in buyback taxation (treated as capital gains)
  • Introduction of new reporting formats and tools
  • Automated systems for lower/NIL TDS certificates

👥 Impact on Taxpayers

For Salaried Individuals:

  • Higher exemptions → better tax planning opportunities
  • Simplified law → easier understanding and compliance

For Businesses & Professionals:

  • Revised compliance requirements
  • Improved reporting systems

👉 Overall, the reforms aim to balance simplification with transparency.

🏁 Conclusion

The income tax changes effective from April 2026 represent a major shift in India’s tax system. While tax rates remain the same, the real impact lies in:

✔ Simplified legislation
✔ Higher exemption limits
✔ Improved compliance framework
✔ Better alignment with current economic conditions

👉 Taxpayers should reassess their tax planning strategies to make the most of these changes.

Section 43B – Allowability of Expenses on Payment Basis (FY 2025-26)

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📘 Complete Guide with Latest Updates, Coverage & Examples

Section 43B of the Income-tax Act, 1961 is one of the most critical provisions for businesses at the time of financial year closing. It ensures that certain expenses are allowed as deduction only when they are actually paid, irrespective of the accounting method followed. This section plays a major role in year-end tax planning, audit, and compliance.

❓ What is Section 43B?

Section 43B states that specified expenses are allowed as a deduction only on actual payment basis, even if the taxpayer follows the mercantile system of accounting.

👉 Simply put:

  • Expense booked ≠ Allowed deduction

  • Payment made = Allowed deduction

🎯 Purpose of Section 43B

The main objective is:

  • ✔ To prevent misuse of accrual accounting

  • ✔ To ensure timely payment of statutory dues

  • ✔ To avoid claiming deductions without actual payment

📋 Expenses Covered Under Section 43B

The following expenses are allowed only on payment basis:

🔹 Statutory Dues

  • GST

  • Customs duty

  • Excise duty

  • VAT (where applicable)

🔹 Employee-Related Payments

  • Employer contribution to PF

  • Employer contribution to ESI

🔹 Other Key Expenses

  • Bonus or commission to employees

  • Interest on loan from:

    • Banks

    • Financial institutions

    • NBFCs

  • Leave encashment

🗓️ When is Deduction Allowed?

Deduction is allowed in:

✔ Same Financial Year If payment is made on or before 31 March

✔ Next Financial Year (Still Allowed in Current Year) If payment is made before due date of return filing (Section 139(1)) 👉 This is a very important benefit.

💡 Example of Section 43B

Case 1 – Payment Made Before Due Date

  • Bonus payable for FY 2025-26 = ₹1,00,000

  • Paid on: 30 June 2026

  • Return filing due date: 31 October 2026 ✔ Deduction allowed in FY 2025-26

Case 2 – Payment Made After Due Date

  • Bonus payable = ₹1,00,000

  • Paid on: 15 November 2026 ❌ Not allowed in FY 2025-26 ✔ Allowed in next year (FY 2026-27)

⚠️ Important Condition for PF & ESI

  • Employer contribution → Covered under Section 43B

  • Employee contribution → Governed by separate provisions (strict due date rules)

Delay in employee contribution may lead to disallowance.

🔍 Special Focus – Year-End Compliance

Before closing FY 2025-26, businesses must ensure:

  • ✔ PF / ESI paid on time

  • ✔ GST liability cleared

  • ✔ Bonus / commission paid or planned

  • ✔ Interest on loans paid

  • ✔ Leave encashment provision reviewed

🚫 Common Mistakes Under Section 43B

  • ❌ Booking expense but not making payment

  • ❌ Missing return filing due date

  • ❌ Confusing employee vs employer PF contribution

  • ❌ Not tracking unpaid statutory dues

  • ❌ Incorrect provision entries

📉 Impact of Non-Compliance

If payment is not made:

  • Expense is disallowed

  • Taxable income increases

  • Higher tax liability

  • Interest and penalties may apply

🌟 Why Section 43B is Important

  • ✔ Ensures genuine expense claim

  • ✔ Impacts tax computation directly

  • ✔ Critical for audit and assessment

  • ✔ Highly relevant for year-end planning

🏁 Conclusion

Section 43B is one of the most important provisions for businesses during financial year closing. It requires careful monitoring of statutory and specified payments to ensure that deductions are not disallowed. Businesses should review all outstanding liabilities before 31 March and ensure timely payments to optimise tax position and avoid future tax issues.

Financial Year Closing (FY 2025–26)

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As the financial year 2025-26 approaches its close, it is important for businesses to review their financials, tax positions, and compliance status to ensure a smooth year-end closing. This advisory note outlines the key action points to avoid disallowances, penalties, and notices under the Income-tax Act, 1961.

🧾 Income Tax – Key Year-End Actions

✔ Expense Booking
• Ensure all expenses related to FY 2025-26 are recorded before 31 March
• Accrue expenses such as:
o Rent
o Professional fees
o Interest
o Audit fees
o Electricity / internet

✔ Check Disallowances
Review critical sections to avoid tax disallowance:
• Section 40A(3): Cash payments above ₹10,000
• Section 43B: PF, ESI, GST, bonus payable
• TDS-related disallowances

✔ TDS Compliance
• Deduct TDS on all applicable payments:
o Salary (Section 192)
o Contractor (194C)
o Professional fees (194J)
o Rent (194I)
• Ensure TDS is deducted and deposited on time
• Reconcile TDS with books

✔ Advance Tax
• Pay remaining advance tax before 31 March
• Avoid interest under sections 234B & 234C

👥 Payroll & HR Compliance

✔ Salary & Bonus
• Book salary for March
• Record bonus / incentives
• Check leave encashment provision

✔ Employee Deductions
• Verify:
o PF / ESI
o TDS calculation
o Investment proofs (80C, 80D, etc.)

🧮 GST Compliance

✔ Reconciliation
• Match:
o Books vs GSTR-1
o Books vs GSTR-3B
o ITC vs GSTR-2B

✔ ITC Review
• Reverse ineligible ITC
• Ensure vendor compliance

📚 Accounting & Financial Review

✔ Books Finalisation
• Complete bank reconciliation
• Verify debtors & creditors
• Review provisions & accruals

✔ Fixed Assets
• Record additions / deletions
• Calculate depreciation

🤝 Vendor & Contract Compliance

✔ Vendor Review
• Collect pending invoices
• Verify vendor GST & PAN
• Ensure TDS compliance

✔ Agreements
• Review ongoing contracts
• Check expiry / renewal terms

💰 Cash & Banking Controls

• Avoid cash transactions beyond prescribed limits
• Ensure proper documentation of all transactions
• Review loans & advances

📂 Documentation & Audit Readiness

Prepare for audit by maintaining:
✔ Invoices & bills
✔ Agreements
✔ Bank statements
✔ TDS records
✔ GST returns
✔ Payroll records

📅 Important Due Dates (March-End Focus)

Compliance | Due Date
Advance Tax (Final Installment) | 15 March
TDS Deposit (March) | 30 April
TDS Return (Q4) | 31 May
Form 16 Issue | 15 June

⚠️ Key Risks if Not Completed

Failure to complete year-end activities may result in:
• Expense disallowances
• Interest & penalties
• Income tax notices
• GST mismatches
• Audit qualifications

🏁 Conclusion

A timely and structured financial year closing ensures compliance, reduces tax risks, and strengthens financial reporting. Businesses should proactively review all tax, accounting, payroll, and regulatory aspects before 31 March to avoid last-minute issues.

For a smooth closure, it is advisable to seek professional assistance for compliance review, tax planning, and audit preparation.

For any assistance with FY closing, compliance review, or tax planning, feel free to connect with us.

SECTION 192 – TDS ON SALARY (FY 2025–26) COMPLETE GUIDE WITH LATEST SLAB RATES, STANDARD DEDUCTION & EXAMPLE 

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📘✨ APPLICABILITY OF SECTION 192


Section 192 of the Income-tax Act, 1961 deals with deduction of Tax Deducted at Source (TDS) on salary.
Every employer is required to deduct TDS if the estimated income of the employee during the financial year is taxable.

TDS on salary must be deducted by:
• Company
• LLP / Partnership firm
• Proprietor
• HUF
• Trust / Society
• Any person paying salary

👉 Condition: Employer–employee relationship must exist.

⏰💰 WHEN TDS SHOULD BE DEDUCTED


TDS must be deducted at the time of actual payment of salary.

Applicable on:
• Monthly salary
• Bonus / incentives
• Arrears of salary
• Advance salary
• Perquisites
• Allowances

👉 Only if estimated income exceeds exemption limit.

🧮📊 HOW TDS IS CALCULATED UNDER SECTION 192


Employer should follow these steps:

  1. Estimate total annual salary
  2. Add bonus / perquisites / other income declared
  3. Allow exemptions and deductions
  4. Reduce standard deduction
  5. Apply slab rate as per tax regime
  6. Deduct TDS monthly

👉 Standard deduction = ₹75,000

📉📘 INCOME TAX SLAB RATES – OLD REGIME (FY 2025–26)

Income Tax Rate
Up to ₹2,50,000 Nil
₹2,50,001 – ₹5,00,000 5%
₹5,00,001 – ₹10,00,000 20%
Above ₹10,00,000 30%

👉 Rebate under section 87A available as per rules.

📈🆕 INCOME TAX SLAB RATES – NEW REGIME (FY 2025–26)

Income Tax Rate
Up to ₹4,00,000 Nil
₹4,00,001 – ₹8,00,000 5%
₹8,00,001 – ₹12,00,000 10%
₹12,00,001 – ₹16,00,000 15%
₹16,00,001 – ₹20,00,000 20%
₹20,00,001 – ₹24,00,000 25%
Above ₹24,00,000 30%

👉 Standard deduction = ₹75,000
👉 New regime is default unless opted otherwise

📊💼 INCOME TO BE CONSIDERED FOR TDS CALCULATION


Include:
• Basic salary
• HRA / allowances
• Bonus / incentives
• Perquisites
• Employer PF contribution (taxable part)
• Salary from previous employer

👉 Then reduce eligible deductions

🧾🧮 EXAMPLE OF TDS CALCULATION UNDER SECTION 192

Monthly salary = ₹1,00,000
Annual salary = ₹12,00,000

Deductions:
• Standard deduction = ₹75,000
• Deduction u/s 80C = ₹1,50,000

Taxable Income Calculation:
• Gross salary = ₹12,00,000
• Less deductions = ₹2,25,000
• Taxable income = ₹9,75,000

👉 Tax will be calculated as per selected regime
👉 Total tax divided over remaining months for TDS

👥💼 SALARY FROM MORE THAN ONE EMPLOYER


If employee worked with multiple employers:
• Must provide previous salary details
• Current employer will calculate total TDS

👉 If not provided → each employer deducts separately

📄🧾 TDS RETURN AND FORM 16


Employer must:
• Deposit TDS within due date
• File quarterly TDS return (Form 24Q)
• Issue Form 16 after year end

👉 Form 16 shows salary + TDS details

📅⏳ DUE DATE FOR DEPOSIT OF TDS

Month Due Date
April – February 7th of next month
March 30 April

👉 Delay may lead to interest & penalty

✅📊 IMPORTANT POINTS FOR EMPLOYERS AT YEAR END


✔ Salary reconciliation
✔ Bonus included
✔ Investment proofs collected
✔ Correct tax regime selected
✔ Standard deduction applied
✔ Accurate TDS deduction
✔ PAN verified
✔ TDS deposited on time

🏁📘 CONCLUSION


Section 192 is a crucial provision for salary TDS compliance.
Accurate income estimation, correct tax calculation, and timely deposit help avoid penalties and notices.

👉 Employers should always review payroll and TDS before financial year closing to ensure full compliance.

The Role of Technology in Recruitment

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Recruitment has evolved dramatically over the past decade. What was once a manual, time-consuming process — sifting through stacks of resumes, scheduling countless interviews, and relying on gut instinct — has now become smarter, faster, and more data-driven. The credit for this transformation goes to technology.

From artificial intelligence to automation and analytics, technology is reshaping how organizations attract, assess, and hire top talent. Let’s explore how it’s changing the game for both employers and candidates.

💻 The Digital Transformation of Hiring

Recruitment technology (often called “RecTech”) has moved far beyond simple job boards. Today, organizations leverage integrated tools that manage every step of the hiring process — from sourcing to onboarding.

Digital recruitment not only improves efficiency but also enhances accuracy, transparency, and candidate experience. Recruiters can now focus more on strategy and relationship-building rather than repetitive administrative tasks.

⚙️ Key Technologies Driving Modern Recruitment

Applicant Tracking Systems (ATS)

An ATS is the backbone of most recruitment operations. It helps recruiters manage applications, filter resumes, and track candidate progress efficiently. Modern ATS platforms also use AI algorithms to match candidates based on skills, experience, and job fit.

Artificial Intelligence (AI) and Machine Learning

AI has revolutionized candidate sourcing and screening. Intelligent tools can automatically:

  • Scan thousands of profiles to find the best matches

  • Predict candidate success using data patterns

  • Eliminate repetitive tasks like resume sorting and interview scheduling

AI also supports bias reduction, ensuring more equitable hiring decisions when used responsibly.

Video Interviewing Platforms

With remote work becoming the norm, video interviews are now a standard part of recruitment. Platforms with AI-powered facial and tone analysis can evaluate soft skills and communication — though these should complement, not replace, human judgment.

Data Analytics

Recruitment analytics help companies make smarter hiring decisions. Metrics like time-to-hire, cost-per-hire, and candidate conversion rate provide actionable insights to improve efficiency and effectiveness.

Social Media and Digital Branding Tools

Technology has made employer branding more crucial than ever. Platforms like LinkedIn, Instagram, and Glassdoor enable organizations to showcase their culture, engage with talent, and build long-term relationships with potential candidates.

🌟 The Benefits of Technology-Driven Recruitment

Adopting recruitment technology offers several advantages:

  • Speed and efficiency: Automating manual tasks shortens hiring cycles.

  • Improved candidate experience: Quick communication and transparent updates enhance brand perception.

  • Better decision-making: Data-driven insights lead to smarter and fairer hiring.

  • Scalability: Technology enables organizations to handle large volumes of applications with ease.

  • Enhanced diversity: AI tools can help minimize unconscious bias, promoting inclusion.

⚖️ Challenges and Ethical Considerations

While technology brings many benefits, it’s not without challenges:

  • Over-reliance on automation can overlook human factors like creativity or cultural fit.

  • AI bias can persist if algorithms are trained on biased data.

  • Privacy concerns arise when handling large volumes of candidate data.

Balancing technology with human empathy is key to ethical recruitment. The goal is not to replace recruiters, but to empower them.

🔮 The Future of Recruitment Technology

The next generation of recruitment tools will be more predictive, personalized, and immersive.
Trends shaping the future include:

  • AI-driven talent forecasting to predict future hiring needs

  • Chatbots that engage candidates 24/7

  • Virtual Reality (VR) and Augmented Reality (AR) for realistic job previews and onboarding

  • Blockchain-based verification for secure and transparent credential checks

As these technologies mature, recruitment will become even more candidate-centric and strategic.

🏁 Conclusion

Technology has redefined recruitment — turning it from a reactive function into a proactive, data-driven strategy. However, the essence of recruitment remains the same: people hiring people.

When organizations blend technological innovation with human insight, they don’t just hire employees — they build stronger, smarter, and more inclusive teams ready for the future of work.

Tax Audit FY 2024-25 (AY 2025-26): Applicability, Due Dates, Penalties & Presumptive Taxation

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Are you wondering whether a Tax Audit is applicable for FY 2024-25 (AY 2025-26)? Every year, thousands of businesses and professionals in India face confusion about tax audit limits, presumptive taxation schemes, due dates, and penalties.

Under the Income-tax Act, 1961, certain taxpayers are required to get their accounts audited to ensure proper reporting of income, expenses, and deductions. The provisions mainly fall under Section 44AB, along with presumptive taxation options under Sections 44AD, 44ADA, and 44AE.

📌 This blog covers:

  • Applicability and turnover limits

  • Presumptive taxation schemes (44AD, 44ADA, 44AE)

  • Important due dates for filing audit reports & ITRs

  • Penalties and consequences of late filing

⚖️ Applicability of Tax Audit – Section 44AB

🏢 For Businesses

  • Tax Audit is mandatory if turnover exceeds ₹1 crore.

  • Exemption up to ₹10 crore if:

    • Cash receipts ≤ 5% of total receipts

    • Cash payments ≤ 5% of total payments

👨‍⚕️ For Professionals

  • An audit is required if gross receipts exceed ₹50 lakh.

📉 For Presumptive Taxation

  • Audit required if income is declared below the presumptive rate and total income exceeds the basic exemption limit.

💡 Presumptive Taxation Schemes

🔹 Section 44AD – Presumptive Taxation for Businesses

  • Applicable to Resident Individuals, HUFs, Partnership Firms (not LLPs).

  • Turnover limit: Up to ₹2 crore.

  • Presumptive income: 8% (cash) or 6% (digital).

  • Audit required if income declared below presumptive rate and total income exceeds basic exemption.

🔹 Section 44ADA – Presumptive Taxation for Professionals

  • Applicable to Resident Individuals or Partnership Firms (not LLPs).

  • Professions: Legal, medical, engineering, accountancy, consultancy, architecture, etc.

  • Gross receipts up to ₹50 lakh.

  • Presumptive income: 50% of receipts.

  • Audit required if declared below 50% and income exceeds the exemption.

🔹 Section 44AE – Presumptive Taxation for Transporters

  • Applicable to assessees owning ≤10 goods vehicles.

  • Income: ₹1,000 per ton/month for heavy vehicles or ₹7,500 per month for others.

  • Audit required if declared below the scheme rate.

⏳ Income Tax Filing Deadlines and Penalties (FY 2024-25 / AY 2025-26)

Category / Action Due Date Section / Rule Penalty / Notes
Individual / HUF / AOP / BOI (no audit) 16th Sept 2025 – –
Businesses (Requiring Audit) 31st Oct 2025 Sec. 271B Penalty of 0.5% of turnover (max ₹1,50,000)
Businesses (Transfer Pricing Cases) 30th Nov 2025 – –
Revised Return 31st Dec 2025 Sec. 139(5) –
Belated / Late Return 31st Dec 2025 Sec. 234F Penalty up to ₹5,000 (₹1,000 if income ≤ ₹5 lakh)
Interest (late filing / non-payment) – Secs. 234A, 234B, 234C 1% per month (simple interest)
Updated Return (up to 4 years) 31st Mar 2030 Sec. 139(8A) Extra tax 25%–50% depending on filing date
Carry forward of losses (except house property) – – Not allowed if return not filed on time

GST Reforms 2025: A Diwali Gift for Citizens

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🏠 Introduction

GST was launched in July 2017 to simplify India’s tax system by combining multiple taxes into one. Over the years, it has helped reduce tax-on-tax, improve compliance, and create a single national market.

In September 2025, the GST Council, chaired by Finance Minister Nirmala Sitharaman, approved Next-Generation GST Reforms. Prime Minister Narendra Modi called it a “Diwali Gift” for citizens, bringing relief to households, farmers, MSMEs, and businesses.

💡 Key Highlights of the Reforms

  • Simpler Structure: Only two main rates – 5% and 18%.

  • Household Relief: Essentials like soaps, toothpaste, and bread at 5% or NIL.

  • Healthcare Support: Life-saving drugs and medical devices at 0–5%.

  • Middle-Class Benefits: Two-wheelers, small cars, TVs, ACs, and cement at 18% (d

  • own from 28%).

  • Farm Sector Boost: Tractors, irrigation equipment, and bio-pesticides at 5%.

  • Luxury Items: Tobacco, pan masala, aerated drinks, and high-end goods are taxed at 40%.

  • Insurance Relief: No GST on life and health insurance premiums.

📊 Impact on Different Sectors

  • Households & Food: Essentials, packaged food, soaps, bicycles, TVs, and ACs are now cheaper.

  • Housing & Construction: Cement and building materials are taxed at a lower rate, reducing home costs.

  • Automobiles: Small cars, two-wheelers, and auto parts are now under 18% GST.

  • Farming: Cheaper tractors, sprinklers, and fertilisers cut farming costs.

  • Services: Hotels, gyms, salons, and yoga services are now taxed at just 5%.

  • Education: Books, pencils, crayons, and erasers are GST-free.

  • Healthcare: Medicines, medical devices, and spectacles are now cheaper; insurance premiums are exempted.

  • Handicrafts & Toys: Lower taxes to support artisans and promote local products.

🌟 Benefits for All

  • Cheaper goods and services increase savings.

  • A simpler system means less paperwork and disputes.

  • MSMEs and startups benefit from lower costs.

  • Encourages domestic production and exports.

  • Improves healthcare and social protection for families.

✅ Conclusion

The GST reforms, effective from 22nd September 2025, are designed to make life easier for people and businesses. By cutting taxes on essentials, supporting farmers and MSMEs, and simplifying the system, these reforms mark a big step toward affordable living, stronger businesses, and faster economic growth.

Internal Audit vs Statutory Audit: Key Differences

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Internal Audit vs Statutory Audit: Key Differences

Introduction

Auditing is an integral part of corporate governance. It provides assurance that business operations, controls, and financial statements are reliable and compliant.

However, not all audits are the same. The two most commonly discussed types are Internal Audit and Statutory Audit. Although they may seem similar, both serve very different purposes.

What is an Internal Audit?

An Internal Audit is an independent evaluation function established within an organisation to monitor and improve its internal control system, risk management, and governance processes.

✅ Objectives of Internal Audit

  • Evaluate operational efficiency

  • Identify risks and suggest preventive measures

  • Verify accuracy of internal records and procedures

  • Ensure compliance with company policies

  • Recommend improvements for cost control and productivity

✦ Features of Internal Audit

  • Conducted by internal employees or outsourced professionals

  • Covers financial, operational, compliance, and risk-related areas

  • Reports to senior management or the Board of Directors

  • Advisory and preventive in nature

What is a Statutory Audit?

A Statutory Audit is a legally required audit of a company’s financial statements, carried out by an independent external auditor.
In India, it is governed by the Companies Act, 2013 and applicable accounting and auditing standards.

✅ Objectives of Statutory Audit

  • Ensure financial statements present a true and fair view

  • Verify compliance with accounting standards and statutory requirements

  • Detect and prevent fraud or misstatements

  • Provide assurance to shareholders and regulators

✦ Features of Statutory Audit

  • Conducted by independent chartered accountants

  • Focuses mainly on financial records and statutory compliance

  • Auditor’s Report is submitted to shareholders and regulators

  • Compulsory as per law

Key Differences Between Internal and Statutory Audit

Aspect Internal Audit Statutory Audit
Purpose Evaluate & improve processes, risk management, controls Ensure financial accuracy & compliance
Conducted By Internal employees or outsourced auditors External, independent auditors
Requirement Voluntary, recommended for good governance Mandatory as per law
Frequency Periodic – monthly, quarterly, or as needed Annually
Scope Broad – operational, financial, compliance, risk Primarily financial reporting & compliance
Reporting To Management / Board Shareholders, regulators, government
Focus Preventive – issues before they occur Detective – accuracy of past records
Legal Binding Not compulsory unless specified Compulsory under Companies Act, 2013

Importance of Internal Audit

Even though not legally compulsory for most organisations, internal audits are essential for:

  • Early detection of errors and fraud

  • Stronger risk management

  • Improved efficiency & cost control

  • Supporting decision-making with insights

Importance of Statutory Audit

A statutory audit is critical for external accountability and compliance:

  • Ensures credibility of financial reporting

  • Builds investor & stakeholder confidence

  • Helps avoid legal and regulatory penalties

  • Detects fraud and misstatements

Conclusion

Internal Audit and Statutory Audit are not interchangeable.

  • Internal Audit is preventive and advisory, helping organizations strengthen systems.

  • Statutory Audit is mandatory and detective, ensuring compliance and financial accuracy.

Together, they create a robust governance framework.