The Income-tax Act, 2025: Your Section Numbers Change, Your Answers Mostly Do Not

The Income-tax Act, 2025 came into force on 1 April 2026, which means FY 2026-27 is the first tax year computed under it. Most of the writing about it has focused on what the new Act changes. Having gone through the deduction and collection provisions section by section against the enacted text, the more useful finding is the opposite one.

The rates and thresholds you have memorised have very largely carried over. What has changed is where they live.

That distinction matters more than a list of changes would, because it tells you where the risk actually sits. You are not going to compute a wrong figure this year. You are going to cite a section that no longer exists.

The structural change

Under the 1961 Act, each deduction obligation had its own numbered section. 194C for contracts, 194J for professional fees, 194H for commission. Thirty-odd sections, each amended independently over four decades, which is how the numbering ended up with 194LBA(2) and 194J(1)(ba).

The 2025 Act collapses all of it into section 393, with the individual obligations set out as serial numbers in Tables:

• Section 393(1) — the everyday resident deductions. Contracts, professional fees, rent, commission, purchase of goods.
• Section 393(2) — payments to non-residents.
• Section 393(3) — winnings, and a handful of specific payments.
• Section 394 — collection at source, the old 206C.

So 194C does not become "section 393C". It becomes section 393(1), Table Sl. No. 6(i). That is the citation, and it is what a notice, a return and a working paper will carry.

The conversion table

The provisions a general practice touches in an ordinary week:

• 192 — Salary — becomes section 392
• 192A — Accumulated PF balance — section 392(7)
• 193 — Interest on securities — s.393(1) Sl. 5(i)
• 194 — Dividend — s.393(1) Sl. 7
• 194A — Interest other than on securities — s.393(1) Sl. 5(ii) and 5(iii)
• 194C — Contracts — s.393(1) Sl. 6(i)
• 194D — Insurance commission — s.393(1) Sl. 1(i)
• 194H — Commission or brokerage — s.393(1) Sl. 1(ii)
• 194I — Rent — s.393(1) Sl. 2(ii)
• 194IA — Transfer of immovable property — s.393(1) Sl. 3(i)
• 194J — Professional or technical fees — s.393(1) Sl. 6(iii)
• 194Q — Purchase of goods — s.393(1) Sl. 8(ii)
• 194R — Benefit or perquisite — s.393(1) Sl. 8(iv)
• 194T — Payments to partners — s.393(3) Sl. 7
• 195 — Payments to non-residents — s.393(2) Sl. 17
• 197 — Lower or nil deduction certificate — section 395
• 197A — Declaration for no deduction — s.393(6)
• 201 — Failure to deduct or pay — section 398
• 203A — TAN — s.397(1)
• 206AA — No PAN, higher rate — s.397(2)(b)(i)
• 206C — Collection at source — section 394

And the provisions outside the withholding chapter move just as far:

• 40A(3) — cash expenditure — section 36(4), with the goods-carriage figure in s.36(6)
• 44AB — tax audit — section 63(1), Table Sl. 1
• 269SS — accepting a loan or deposit — section 185(1)
• 269T — repaying one — section 188(1)
• 269ST — cash receipts — section 186(1)

What the numbers actually do

Take the four sections a practice cites most, with the 2025 figures beside the 1961 ones:

194C, contracts. 1% where the contractor is an individual or HUF, 2% otherwise. Threshold ₹30,000 for a single sum, ₹1,00,000 in the aggregate. Unchanged in substance — now cited as s.393(1) Sl. 6(i).

194J, professional and technical fees. 2% for technical (non-professional) services, cinematograph film royalty or a call-centre payee; 10% otherwise. Threshold ₹50,000, and nil for a director's remuneration. Now s.393(1) Sl. 6(iii).

194I, rent. 2% for machinery, plant or equipment; 10% for land, building, furniture or fittings. Threshold ₹50,000 for a month or part of a month. Now s.393(1) Sl. 2(ii).

194Q, purchase of goods. 0.1% on the sum exceeding ₹50,00,000, and you are a "buyer" only where turnover in the preceding tax year exceeded ten crore rupees — a condition now sitting in s.402(6), Table Sl. 1, rather than inside the deduction section itself.

The arithmetic is the same. The citation is not.

Two things that genuinely did change

Section 206C(1H) is gone. TCS on the sale of goods has no row in the section 394 Table. The transaction is dealt with as a deduction by the buyer under s.393(1) Sl. 8(ii) — the old 194Q — rather than as a collection by the seller. If your client has been collecting under 206C(1H), that obligation ends with the 1961 Act rather than moving to a new number.

Section 194LD has no clean successor. No serial in s.393(2) reproduces its conditions — interest on rupee-denominated bonds or Government securities payable to an FII or QFI. Where that provision is live for a client, the position needs confirming against the section rather than converting from a table.

An illustration

A private company pays a firm of architects ₹6,00,000 in FY 2026-27.

Under the 1961 Act you would have written: TDS deducted under section 194J at 10% — ₹60,000.

Under the 2025 Act: tax deducted under section 393(1) [Table: Sl. No. 6(iii)] at 10% — ₹60,000. Professional services, so the 10% limb rather than the 2% technical limb. The threshold of ₹50,000 was crossed.

Same money. Same rate. A citation that will not be recognised if you write the old one on a FY 2026-27 working paper.

How Audcrix handles the transition

The two Acts run side by side rather than one replacing the other in the code.

• The year decides the Act. FY 2025-26 and earlier compute under the 1961 Act; FY 2026-27 onwards under the 2025 Act. Nothing about the old workings is deleted — a reopened FY 2024-25 still computes the way it did then.
• The Act is committed as data, not as code. The Tables, the section text and the key limits are held as verified extracts carrying the page and the passage they came from, so a figure can be traced back to the enacted words rather than to whoever typed it.
• A drift guard runs in the regression suite. If the committed tables and the engine ever disagree, the build fails rather than quietly serving one of them.

This is the first part of a series working through the 1961 and 2025 provisions side by side. Every figure is taken from the enacted text rather than from summaries.

Audcrix is audit and compliance intelligence for Indian CA firms. See how it works.