Compliance
Compliance in India’s New Income-Tax Act 2025: Forms, TDS & Non-Resident FAQs
With the rollout of India’s Income-tax Act 2025 (effective 1 April 2026), several procedural changes around TDS/TCS, Forms-such-as-121/15G/H, and non-resident residence rules demand attention.
By NomadicTax Research Team • 5-8 min read • August 18, 2026
## Key Procedural Changes under the Income-tax Act, 2025
India’s Act 2025 came into force starting 1 April 2026, replacing the old Income-tax Act, 1961. While many tax rates and thresholds are consistent, the **terminology**, **section numbering**, **Forms**, and **procedures** have shifted. These include changes in:
- **TDS/TCS provisioning**: All withholding obligations now refer to **Section 393** (for TDS) and **Section 394** (for TCS), replacing various sections like 194C, 194J etc. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/tax-payments-faq?mobile-app=1&utm_source=openai))
- **Forms 15G/15H** are replaced by **declarations under Section 393(6)** using **Form No. 121**. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/income-tax-forms?mobile-app=1&utm_source=openai))
- **Unified Payment Tile for Remittances/Deductions**: Form 141 (Challan-cum-Statement) under Section 393(1) consolidates PAN-based payment forms into one interface. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/form-141-challan-cum-statement-deduction-tax-us-3931-UM?mobile-app=1&utm_source=openai))
## Non-Resident & Residency Rules: What’s Unchanged and What’s Retained
- Primary residence test (182 days, or 60 + 365 days in preceding four) remains the same under Section 6 of the new Act. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/non%20resident%20-faq?utm_source=openai))
- Deemed resident status (for Indian citizens exceeding ₹15 lakh income and lacking tax liability abroad) under section 6(7) mirrors old section 6(1A) of the 1961 Act. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/non-resident?utm_source=openai))
## Forms & Filings: What Businesses and Individuals Need to Know
- **Form 121**: To furnish nil or lower deduction declarations under Section 393(6) (i.e., replacing 15G/15H). Must include all required fields, and from AY 2026-27, submitted via the e-filing portal. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/income-tax-forms?mobile-app=1&utm_source=openai))
- **Form 141**: Used for making TDS payments/challan-cum-statement under Section 393(1). Now consolidated and pan-based. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/form-141-challan-cum-statement-deduction-tax-us-3931-UM?mobile-app=1&utm_source=openai))
- **ITR Forms Changes**: New rules include **ITR-BN** for some cases (search, requisition), updates to Rule 332. Amended rules effective from 1 April 2026. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?mobile-app=1&page=%2C0&utm_source=openai))
## Common Pitfalls & How to Avoid Them
| Mistake | Consequence | Fix |
|---|---|---|
| Continuing to quote old section numbers (e.g. 194J) after 1-Apr-2026 | Errors in e-filing, notices from assessing officer | Update all TDS/TCS references to 393/394; inform accounting teams and payroll vendors |
| Using old forms or declarations (15G/15H under old IDs) | Non-acceptance of declaration; wrong withholding | Submit under new format (Form 121) for relevant years |
| Non-resident or foreign income not reported under new Act timing | Misassessment or double taxation risks | Examine whether income is assessable before or after effective date; guard against treaty misfiling |
## Action Items for 2026-27 Compliance
1. **Train finance teams** on new section numbers and references.
2. **Review & update software**: TDS/TCS modules, payroll, vendor payments.
3. **Audit past declarations**: Any Form 15G/H submitted in old form for income arising after 1 April 2026 needs replacement.
4. **Check status of PAN-Aadhaar linkage**, as some PANs may be inactive, affecting ability to file new forms.
## Why This Matters for Diaspora & Cross-Border Filers
- Non-residents and diaspora with Indian source income should confirm whether their income arises before or after April 2026 to apply correct law.
- Already familiar rules for residency/stay thresholds make it easier to manage cross-border work and remote income flows.
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**Read Time:** 6 min
**TaxHome:** India
**Category:** Compliance
**Author:** NomadicTax Research Team
**Published:** true