Tax Rates and Compliance Provisions as per the Income Tax Act, 2025

(Applicable from Tax Year 2026-27 onwards)

 

Income Tax Act, 2025 is applicable from 01.04.2026 and replaces the Income Tax Act, 1961 for Tax Year 2026-27 onwards, aiming at simplified structure, reduced litigation and ease of compliance. Tax rates and important compliance provisions are provided below:

 

Tax Rates:

(A)   Corporates:

 

Section 200 - Concessional Regime – 22% (Erstwhile Section 115BAA)

Particulars

Section 200 of Income Tax Act, 2025

Section 115BAA of Income Tax Act, 1961

Remarks

Base Tax Rate

22%

22%

No change

Surcharge

10% (Flat)

10% (Flat)

No change

Effective Tax Rate (including 4% Health & Education

Cess)

25.168%

25.168%

No change

Note: MAT is not applicable under concessional regime.

 

(a)  Section 201- Concessional Regime for New Manufacturing Companies (Erstwhile Section 115BAB)

Particulars

Section 201 of

Income Tax Act, 2025

Section 115BAB of

Income Tax Act, 1961

Remarks

Base Tax Rate

15%

15%

No change

Surcharge

10% (Flat)

10% (Flat)

No change

Effective Tax Rate (including

4% Health & Education Cess)

17.16%

17.16%

No change

 

Note:

 

1.     MAT is not applicable under concessional regime.

2.     Domestic company should be set up and registered on or after 1 October 2019.

3.     Domestic company engaged in manufacturing/production which commenced on or before 31st March 2024.

 

(b)  Section 199- Normal Tax Regime (Erstwhile Section 115BA)

Particulars

Section 199 of Income Tax Act,

2025

Section 115BA of Income Tax Act,

1961

Remarks

Base Tax Rate (Eligible turnover threshold

companies)

25%

25%

No change

Surcharge (Income >

Rs.1 Cr ≤ Rs.10 Cr)

7%

10%

Surcharge as per slab rate

Surcharge (Income >

Rs.10 Cr)

12%

10%

-

Health & Education Cess

4% on Tax plus

Surcharge

4% on Tax plus

Surcharge

No change

MAT from 1st April

 

 

 

2026

 

 

 

·     Payment of 14%

No MAT credit

-

-

Restricted to 25% of tax liability

-

·     MAT credit

 

(B) Firms/LLP:

 

 

Particulars

Income Tax Act,

2025

Income Tax Act,

1961

Remarks

Base Tax Rate

30%

30%

No change

Surcharge (Income >

Rs.1 Cr)

12%

12%

No change

Health & Education Cess

4% on Tax plus

Surcharge

4% on Tax plus

Surcharge

No change

 

(C) Individual/HUF/AOP/BOI/Artificial Juridical persons:

 

(a)    New Tax Regime –

Section 202- New tax regime for individuals (Erstwhile Section 115BAC)

Particulars (In Rs.)

Section 202 of Income Tax Act, 2025

Section 115BAC of Income tax Act, 1961

Remarks

Up to 4 lakhs

-

-

 

 

 

No change

4,00,001-8,00,000

5%

5%

8,00,001-12,00,000

10%

10%

12,00,001-16,00,000

15%

15%

16,00,001-20,00,000

20%

20%

20,00,001-24,00,000

25%

25%

More than 24 lakhs

30%

30%

 

(b)    Old Tax Regime – (below 60 years)

Particulars (In Rs.)

Income Tax Act, 2025

Income tax Act, 1961

Remarks

Up to 2,50,000

-

-

 

No change

2,50,000-5,00,000

5%

5%

5,00,000-10,00,000

20%

10%

More than 10 lakhs

30%

30%

 

Tax Due Dates:

 

(A)  Section 408 - Advance Tax Due Dates (Erstwhile Section 211)

 

(a)    Regular Taxpayers (Companies, Firms/LLP & Individuals)

Installment Due Date

Minimum % of Tax Payable

Remarks

On or before 15th June

15%

No change

On or before 15th September

45% (Cumulative)

No change

On or before 15th December

75% (Cumulative)

No change

On or before 15th March

100% (Cumulative)

No change

*Applicable where advance tax liability exceeds Rs.10,000/-

 

 

(b)  Individuals under Presumptive Scheme

Due Date

Requirement

Remarks

15th March

100% of Advance Tax in one

installment

No change

 

Note: Advance Income tax is paid using Challan ITNS 280N (ITNS 280 in Old Act)

 

(B)  Section 263 - Income Tax Return Due Dates (Erstwhile Section 139)

Category of Assessee

Due Date (AY)

Remarks

Individual (Non-Audit) filing

ITR 1 and ITR 2

31st July

No change

Individual (Non-Audit) filing ITR 3 and ITR 4

31st August

Newly Inserted in Finance Tax Act,

2026

Individual / Firm requiring

Audit

31st October

No change

Company (Non-TP)

31st October

No change

Transfer Pricing Cases

30th November

No change

Belated / Revised Return

31st December

No change

Updated Return

31st March (60 months from

the end of relevant tax year)

No change

(Due dates subject to extension by CBDT through notification)

 

 

(C)  Section 63 - Tax Audit Due Dates (Erstwhile Section 44AB)

 

Particulars

Section 63 of Income Tax act, 2025

Section 44AB of Income tax Act, 1961

Remarks

Transfer pricing cases

31st October

31st October

No change

Other tax audit cases

30th September

30th September

No change

 

(D)  TDS payment

Particulars

Rule 218 of the Income Tax Rules, 2026

Due Dates for TDS Payment

A. Government Deductor:

-  Without challan: Same day

-  With challan: 7th of next month

 

B. Non-Government Deductor:

-  April to February: 7th of next month

-  March: 30th April

Special Cases

For TDS under sections 393:

-  Payment within 30 days from end of month

-  Along with challan-cum-statement

 

Other Important Provisions:

(a)  Section 185 – Taking/Accepting Loans or Deposits (Specified Modes) (Erstwhile Section 269SS )

Particulars

Section 185 of Income Tax

Act, 2025

Remarks

Prohibits acceptance / receipt

of

Loan, Deposit, specified sums

No change

Threshold limit

Rs. 20,000 or more

No change

Nature of restriction

Cannot accept except through

specified banking modes

No change

Modes allowed

Account payee cheque, Account payee bank draft, electronic clearing system through a bank account, any other prescribed electronic

mode

No change

Penalty for violation

Sec 450 → Penalty equal to

amount of loan / deposit

No change

 

(b)  Section 186 – Payment in Cash (Specified Limit)

(Erstwhile Section 269ST)

Particulars

Section 186 of Income Tax Act, 2025

Remarks

Prohibits

No person shall receive in cash of Rs.2,00,000/- or more for:

·      Receiving payment for sale of goods/services

·      Repayment of loans/deposits

·      Any other sum

Applies to a single transaction, or to transactions relating to the same event.

No change

Allowed Modes of Payment

Payments of Rs.2,00,000/- or more should be made through:

· Account payee cheque

· Account payee bank draft

· Electronic clearing system through a bank account

· Any other electronic mode

No change

Exceptions

Government, Banking company, Post office savings bank, Co-operative bank

etc.

No change

Penalty for

violation

Sec 451 → Penalty equal to amount

received

No change

 

(c)   Section 188 – Repayment of loans or deposits (Erstwhile Section 269T)

Particulars

Section 188 of Income Tax Act, 2025

Remarks

Prohibits

No person shall repay in cash of Rs.20,000/- or more

·  

Applies to a single transaction, or to transactions relating to the same event.

No change

Allowed Modes of Payment

Payments of Rs.20,000/- or more should be made through:

· Account payee cheque

· Account payee bank draft

· Electronic clearing system through a bank account

· Any other electronic mode

No change

Exceptions

Government, Banking company, Post office savings bank, Co-operative bank

etc.

No change

Penalty for

violation

Sec 453 → Penalty equal to amount

received

No change

 

Tax Audit and Presumptive Taxation:

(a)  Section 63 (Tax Audit) erstwhile Section 44AB

 

Nature of Activity

Threshold Limit

Remarks

Business

Turnover > Rs.1 Crore

No change

Business (95% digital receipts &

payments)

Turnover > Rs.10 Crores

No change

Profession

Gross Receipts > Rs.50 Lakhs

No change

Presumptive cases declaring lower income

Audit mandatory if income below

prescribed % and basic exemption exceeded

No change

(Audit report to be furnished before specified due date in prescribed form)

(b)  Section 58 (Presumptive Taxation – Business) erstwhile Section 44AD

Particulars

Provision

Remarks

Eligible Assessee

Resident Individual / HUF / Partnership

Firm (not LLP)

No change

Eligible Turnover Limit

Up to Rs.2 Crores (Rs.3 Crores if 95%

digital receipts)

No change

Presumptive Income

8% of turnover (6% for digital receipts)

No change

Books of Account

Not required if presumptive scheme

adopted

No change

Advance Tax

100% by 15th March

No change

 

(c)   Section 58 (Presumptive Taxation – Professionals) erstwhile Section 44ADA

Particulars

Provision

Remarks

Eligible Assessee

Resident Individual / Partnership Firm

(not LLP)

No change

Eligible Professions

Legal, Medical, Engineering, Architecture, Accountancy, Technical Consultancy, interior decoration, information technology or company

secretary or any other notified.

No change

Gross Receipts Limit

Up to Rs.50 Lakhs (Rs.75 Lakhs if 95%

digital receipts)

No change

Presumptive Income

50% of gross receipts

No change

Advance Tax

100% by 15th March

No change

 

TDS / TCS Rates and applicability:

(a)  Tax Deducted at Source:

 

 

Section (New

Act)

Section (Old Act)

 

Nature of payment

Threshold Limit

TDS

Rates (%)

Remarks

392

192

Salaries

Basic exemption limit           of

employee

Slab Rate

No Change

392

192A

Accumulated PF

Balance

50,000/-

10

No Change

393(1)

194D

Insurance

Commission

20,000/-

10

Threshold limit changed from 15,000/- to 20,000/-

393(1)

194H

Commission               /

Brokerage

20,000/-

2

Threshold limit changed from 15,000/- to 20,000/-

393(1)

194IB

Rent                                by

individual/HUF (not liable to audit)

50,000/-

per month

2

No Change

393(1)

194I(a)

Rent for Plant & Machinery

50,000/-

per month

2

Threshold limit changed from 20,000/- per month to

50,000/- per month

393(1)

194I(b)

Rent         of                 Land Building                   &

Furniture

50,000/-

per month

10

Threshold limit changed from 20,000/- per month to 50,000/- per month

393(1)

193

Interest                                on

Securities

10,000/-

10

No Change

393(1)

194A

Interest  other  than

interest on securities (Banks)

50,000/-

10

Threshold limit changed from 40,000/- to 50,000/-

393(1)

194A

Interest other than interest on securities –  Senior  Citizen

(Banks)

1,00,000/-

10

Threshold limit changed from 50,000/- to 1,00,000/-

393(1)

194A

Interest (Others)

10,000/-

10

Threshold limit changed

from 5,000/- to 10,000/-

393(1)

194C

Contractor/sub-contractor (individual/HUF)

Single > Rs.30,000/- or aggregate >

Rs.1,00,000/-

1

No Change

393(1)

194C

Contractor/sub-contractor (others)

Single > Rs.30,000/- or aggregate >

Rs.1,00,000/-

2

No Change

 

Section (New

Act)

Section (Old Act)

 

Nature of payment

Threshold Limit

TDS

Rates (%)

Remarks

393(1)

194M

Payment made for Contracts, Commission         or Professional Fees etc.     by Individual and HUF (other than those              required      to deduct as per Sl.

No. 6(i) and (iii) or

Sl. No.1 (ii)].)

50,00,000/-

2

Rate has been changed from 5% to 2%

393(1)

194J

Fees – Technical Services, Call Centre, Royalty for sale Distribution / Exhibition of Cinematography

Films

50,000/-

2

Threshold limit changed from 30,000/- to 50,000/-

393(1)

194J

Fees – All other Professional

Services, Royalty

50,000/-

10

Threshold limit changed from 30,000/- to 50,000/-

393(1)

194J(1)

(ba)

Director fees/remuneration/c

ommission

–

10

No Change

393(1)

194

Dividend

–

10

Threshold limit changed

from 5,000/- to 10,000/-

393(1)

194DA

Any sum under a

life insurance policy (taxable component)

1,00,000/-

2

Rate has been changed from 5% to 2%

393(1)

194Q

Purchase of Goods

In excess of Rs.50,00,000/-

0.1 on sum exceedin g Rs.50

lakhs

No change

393(1)

194R

Benefit/perquisite from

business/profession

20,000/-

10

No Change

393(3)

194B

Winning from Lottery/Crossword puzzle/Card game/gambling/betti

ng

10,000/-

30

No Change

393(3)

194BA

Winnings from

online games

Net winnings

30

No Change

 

Section (New Act)

Section (Old Act)

 

Nature of payment

Threshold Limit

TDS

Rates (%)

Remarks

393(3)

194BB

Winning from Horse

Race

10,000/-

30

No Change

393(3)

194G

Commission, remuneration or prize – selling

lottery tickets

20,000/-

2

Threshold limit changed from 15,000/- to 20,000/-

393(3)

194N

Cash withdrawal

1 Crore (3 Crores for Co-

op Society)

2

No Change

393(3)

194T

Remuneration/salary

/interest to partner of firm

20,000/-

10

No Change

 

(b)  Tax Collected at Source:

 

Section (New

Act)

Section (Old Act)

 

Nature of payment

Threshold Limit

TCS

Rates (%)

 

Remarks

394(1)

206C(1)

Sale of alcoholic liquor for           human

consumption.

-

1

No Change

394(1)

206C(1)

Sale of tendu leaves.

-

5

No Change

394(1)

206C(1)

Sale of timber whether obtained under a forest lease or otherwise; or any other forest produce (not being timber or tendu leaves) obtained under a forest

lease.

-

2

Rate has been changed from 2.5%

to 2%

394(1)

206C(1)

Sale of scrap

-

1

No Change

394(1)

206C(1)

Sale of minerals, being

coal or lignite or iron ore.

-

1

No Change

394(1)

206C(1F)

Sale consideration in case of—

(a)  motor vehicle; or

(b)   any other goods, as may be notified by the Central Government.

Rs.10,00,000/-

1

No Change

394(1)

206C(1G)

Remittance under the Liberalised Remittance Scheme – for education

or medical purpose

Rs.10,00,000/-

5

Threshold limit has been changed from 7 lakhs to 10 Lakhs

394(1)

206C(1G)

Remittance under the Liberalised Remittance Scheme – other than education  or  medical

purpose

Rs.10,00,000/-

20

Threshold limit has been changed from 7 lakhs to 10 Lakhs

394(1)

206C(1G)

Sale of Overseas tour programme package of amount or aggregate of amounts    up    to

Rs.10,00,000

-

5

Threshold limit has been changed from 7 lakhs to 10 Lakhs

394(1)

206C(1G)

Sale of Overseas tour programme package of amount or aggregate of amounts    exceeding

Rs.10,00,000/-

-

20

No Change

 

Section (New Act)

Section (Old Act)

 

Nature of payment

Threshold Limit

TCS

Rates (%)

 

Remarks

394(1)

206C(1C)

Use of parking lot or toll plaza or mine or quarry for the purpose of business, excluding mining and quarrying of mineral oil (including   petroleum

and natural gas).

-

2

No Change

 

Note: TDS/TCS is paid using Challan ITNS 281N (ITNS 281 in Old Act)