Income-tax Act 2025: the new section numbers travel agents need
Your TDS software now asks for section 393, not 194H. A verified old-to-new map of the income-tax sections and forms a travel agency uses every month.
Khardung La · 05:50Open your TDS software this month and it wants section 393, not 194H. The Income-tax Act, 2025 and the Income-tax Rules, 2026, both in force from 1 April 2026, renumbered almost every provision a travel agency touches: TDS on vendor bills, TCS on overseas packages, your tax audit, your presumptive-tax option, even the PAN declaration a client signs at the counter (ICAI's tabular mapping of the Act).
This month your desk runs both systems: FY 2025-26 still cites 1961 numbers, because section 536 of the new Act keeps the old one running for every tax year that began before 1 April 2026. Below is the pin-able map, built from the enacted Act, the notified Income-tax Rules 2026 and ICAI's tables, not mapping blogs that disagree with each other, with exact replace-lines for your invoices and vendor letters. Rates, limits and dates are as of October 2026; rules change, so confirm with your CA before you file.
Which Act applies: the period decides, not the filing date
The period the income relates to decides which Act applies, not when you file. FY 2025-26, assessed as AY 2026-27, stays on 1961 Act numbers; tax year 2026-27 onward uses the 2025 Act's numbers.
CBDT proves the point itself. Circular No. 07/2026 (28 September 2026), issued under section 119 of the 1961 Act read with section 536 of the 2025 Act, extends the FY 2025-26 tax-audit specified date to 21 October 2026 and the ITR due date for audit cases to 21 November 2026, citing old sections 139 and 44AB well into the new Act's life (CBDT Circular No. 07/2026). As of October 2026 the e-filing portal lists no further extension. (Your audit-limit turnover is a separate check if you're close.)
Section 536 keeps notices, assessments, penalties and appeals for any tax year that began before 1 April 2026 under the old Act, even when they are issued later: a reassessment notice for FY 2023-24 landing in 2027 still says "148", not "280". A practitioner note on TaxGuru adds a challan trap: tax for April 2026 onward is deposited against "Tax Year 2026-27", and a challan put against "AY 2026-27" lands in FY 2025-26 records, later showing up as a short-payment default that isn't real (TaxGuru).
TDS you deduct, TDS deducted from you: the map
The 2025 Act row for every TDS situation this desk sees, matched to the Act's table text (ICAI's mapping). Full mechanics sit in the TDS guide for travel agents; this table only fixes the numbers.
| What you pay or receive | 1961 Act (FY 2025-26 and earlier) | 2025 Act (tax year 2026-27 on) | Rate and limit now |
|---|---|---|---|
| Commission to sub-agents/freelancers; commission paid to you | 194H | 393(1) Table Sl. 1(ii) | 2%, above ₹20,000 a year |
| Travel-insurance commission | 194D | 393(1) Table Sl. 1(i) | 2% (non-company payee), above ₹20,000 |
| Coach, cab, catering, advertising contracts | 194C | 393(1) Table Sl. 6(i) | 1% individual/HUF, 2% others; ₹30,000 single bill or ₹1,00,000 a year |
| CA, lawyer or technical-consultant fees; technical services | 194J | 393(1) Table Sl. 6(iii) | 10% professional, 2% technical; above ₹50,000 |
| Office rent paid by a firm/company or ₹1 crore+ individual | 194-I | 393(1) Table Sl. 2(ii) | 10% building/furniture, 2% equipment; above ₹50,000/month |
| Rent paid by other individuals/HUF | 194-IB | 393(1) Table Sl. 2(i) | 2%, above ₹50,000/month (no TAN; challan-cum-statement) |
| Individuals/HUF paying contracts, fees or commission over ₹50 lakh | 194M | 393(1) Table Sl. 6(ii) | 2%, above ₹50 lakh (no TAN; challan-cum-statement) |
| Sales through an e-commerce platform | 194-O | 393(1) Table Sl. 8(v) | 0.1%; small individual/HUF sellers up to ₹5 lakh exempt |
| Partner salary, commission, interest (firms) | 194T | 393(3) Table Sl. 7 | 10%, above ₹20,000 |
| Staff salary | 192 | 392 | slab rates |
| Payments to a foreign DMC/hotel (if chargeable in India) | 195 | 393(2) Table Sl. 17 | rates in force / treaty: ask your CA |
These rows come from the Table's own wording and the TDS return's section codes, not a separate CBDT crosswalk: ICAI's mapping only groups sections 193 to 194T into section 393 as one block. A firm or company is both a "specified" and a "designated" person under section 402, so it deducts under these rows whatever its turnover (rows 2(i) and 6(ii) are for individuals and HUFs outside that net). An individual or HUF comes in once the previous tax year's business turnover passed ₹1 crore (₹50 lakh for a profession).
Section codes as printed in the notified quarterly TDS return form: insurance commission 1005, commission/brokerage 1006, rent 1008/1009, contract work 1023 (individual/HUF) or 1024 (others), technical fees 1026, professional fees 1027, e-commerce 1035, partner payments 1067. Check them against the current return utility before you file.
TCS, presumptive tax, audit and returns
| Provision | 1961 Act | 2025 Act | What it means now |
|---|---|---|---|
| TCS on overseas tour packages | old TCS section | new TCS section | 2% from the first rupee; seller = anyone selling the package |
| No PAN from payee/client | 206AA and its TCS equivalent | 397(2) | TDS usually 20%; TCS higher of 2x rate or 5%, max 20% (5% on packages) |
| TAN, deposit, statements | 203A, 200 and the TCS equivalents | 397 | TAN on every challan/statement/certificate |
| Lower/nil deduction certificate | 197 | 395(1) | ask your CA for the current application form |
| Presumptive tax | 44AD / 44ADA / 44AE | 58 | 6% digital, 8% other; up to ₹2 crore (₹3 crore if cash within 5%); not for commission earners or agency businesses |
| Books of account | 44AA | 62 | - |
| Tax audit | 44AB | 63 | ₹1 crore; ₹10 crore if cash receipts and payments each within 5%; report in Form 26 |
| Return of income | 139 | 263 | 31 Jul / 31 Aug (business, no audit) / 31 Oct (audit) |
| Advance tax | 207-211 | 403-408 | 15 Jun/Sep/Dec/Mar; section 58 users all by 15 Mar |
| Late TDS/TCS statement fee | 234E | 427 | ₹200/day, capped at the tax |
| Late return / audit default | 234F / 271B | 428 | return: ₹5,000 (₹1,000 if income up to ₹5 lakh); audit: ₹75,000 for the first month, ₹1,50,000 after |
The overseas-package rate dropped to a flat 2%, no threshold, under a Finance Act 2026 amendment (Finance Bill memorandum, Clause 73); mechanics sit in the TCS playbook for overseas packages. No PAN: higher of twice the rate or 5%, capped at 20%, so a flat 5% in practice. No TCS is collected where the buyer has deducted TDS on the payment.
Careful: Indian Kanoon's copy of the 2025 Act's TCS section still shows the as-enacted text, 5% up to ₹10 lakh and 20% above, not yet updated for the Finance Act 2026 amendment (doc 50524531). Don't quote a rate from it.
Section 58 carries forward old 44AD's exclusion: under section 58(11), anyone who earns commission or brokerage, or carries on an agency business, is not an eligible assessee for the 6%/8% scheme. A firm using it still cannot deduct partner remuneration or interest separately (section 58(4)).
Cash, credits and the penalties attached
| Rule | 1961 Act | 2025 Act | Limit |
|---|---|---|---|
| Cash expense to one person in a day | 40A(3), 40A(3A) | 36(4), 36(5) | above ₹10,000 (₹35,000 goods carriages); exceptions in Rule 26 |
| MSME vendor dues | 43B(h) | 37(2)(g) | paid after the MSMED Act deadline: deductible only when paid; no return-date grace |
| Cash receipt from a client | 269ST (penalty 271DA) | 186 (penalty 451) | ₹2 lakh or more a day/transaction/event; penalty = the amount |
| Cash loans or deposits taken | 269SS (penalty 271D) | 185 (penalty 450) | ₹20,000 or more |
| Unexplained credits in books | 68 | 102 | - |
| Failure to deduct / collect | 201, 271C, 271CA | 398, 448, 449 | penalty = tax not deducted/collected |
| Reasonable-cause defence | 273B | 470 | covers sections 448-453, among others |
| Notices and orders | 142(1), 143, 144, 148, 154, 156, 270A | 268, 270, 271, 280, 287, 289, 439 | old-year notices keep old numbers |
Row one: old 40A(3) is new section 36, not 41 (new 38 is old 41). More than ₹10,000 in cash to one person in a day disallows the whole payment, not just the excess; the exceptions are in the ₹10,000 cash-payment rule guide. Taking ₹2 lakh or more in cash from one client in a day, for one transaction or for one event breaches new section 186 and risks a section 451 penalty equal to the entire sum, covered in the guide to the ₹2 lakh cash-receipt rule.
The forms map: returns, certificates, PAN declarations
| Document | Old form | New form | Due now (tax year 2026-27) |
|---|---|---|---|
| TDS return, resident payees | - | - | 31 Jul / 31 Oct / 31 Jan / 31 May |
| TDS return, non-resident payees | - | - | same schedule |
| TDS return, salary | - | - | same schedule |
| TCS return | - | - | same schedule |
| TDS certificate (non-salary) | - | - | 15 days after the statement's due date |
| TCS certificate to the client | - | - | 15 days after the statement's due date |
| Salary certificate | - | - | 15 June after the tax year |
| Challan-cum-statement, 194-IB/194M type payments | - | - | 30 days after month-end |
| Foreign remittance declaration / CA certificate | 15CA / 15CB | 145 / 146 | before remitting |
| Tax credit statement | - | - | check it on the income-tax portal |
| Tax audit report | 3CA/3CB + 3CD | 26 | one month before the return's due date |
| No-PAN declaration / its statement | 60 / 61 | 97 / 98 | Form 98: 31 Oct and 30 Apr |
| Statement of specified financial transactions | 61A | 165 | - |
Form numbers for TDS and TCS returns and certificates, and for the tax credit statement, are left out of the table: take the current ones from your TDS software or the income-tax portal, and confirm with your CA. Non-government deductors deposit within seven days of month-end, and by 30 April for March (ICAI's Rules mapping). Form No. 97 isn't for every booking. For an agency it comes up when a client who is not a company or firm has no PAN and either takes a bill above ₹2,00,000 for one transaction, or pays more than ₹1,00,000 in cash against a bill to a hotel, restaurant, banquet hall, convention centre or event manager. The old separate PAN trigger for foreign-travel payments is gone (Business Today).
An agency that issues those bills, receives Form 97 declarations and must get its accounts audited files Form No. 98 by 31 October and 30 April (Notification 3/2026). Rule 160 as printed refers to an audit "under section 58" rather than section 63, so ask your CA whether it catches you. ITR names are unchanged: Rule 164 keeps ITR-1 to ITR-7, with ITR-4 (Sugam) for section 58 income.
One week in October 2026, both Acts on the same desk
Example (hypothetical, no real agency): A two-partner firm's October desk carries both systems. An August Bali package of ₹1,80,000 (GST included), client PAN on file: TCS at 2% is ₹3,600. A second ₹2,40,000 package, no PAN: TCS jumps to 5%, or ₹12,000 (₹7,200 more than the ₹4,800 it would have been), and the invoice needs the client's PAN or a Form 97.
A proprietor coach operator's single ₹45,000 bill: TDS at 1% is ₹450 (₹900 at 2% if the operator were a company or firm). A driver paid ₹12,000 in cash in one day for trip expenses: the whole amount is disallowed under section 36(4), unless a Rule 26 exception applies.
On the calendar: the FY 2025-26 audit report (old section 44AB) is due 21 October. Q2 tax year 2026-27 statements, the quarterly TDS and TCS returns, are due 31 October; the TDS and TCS certificates follow by 15 November.
Find-and-replace lines for invoices, receipts and vendor letters
Swap these on anything that relates to a payment, collection or deposit from 1 April 2026. Anything about FY 2025-26, even if issued now (a revised March 2026 TCS certificate, the FY 2025-26 audit report), keeps the old wording.
Invoice line
Old: "TCS @ 2%" quoting the 1961 Act section
New: "TCS @ 2% (TCS on overseas tour packages, Income-tax Act, 2025)"
Receipt / WhatsApp message
Old: a promise of the TCS certificate under its old form number
New: "Your TCS certificate follows within 15 days after our quarterly TCS return is due"
Vendor payment advice
Old: "TDS u/s 194C @ 1%/2%; TDS certificate to follow"
New: "TDS under section 393(1) [Table: Sl. No. 6(i)] @ 1%/2%; TDS certificate to follow"
Sub-agent commission statement
Old: "TDS u/s 194H @ 2%"
New: "TDS under section 393(1) [Table: Sl. No. 1(ii)] @ 2%"
Partner ledger note
Old: "194T"
New: "Section 393(3) [Table: Sl. No. 7] @ 10%"
Booking form, client has no PAN
Old: "PAN / Form 60"
New: "PAN / Form No. 97 (Rule 159, Income-tax Rules, 2026)"
Challan/accounts note, tax deducted or collected from April 2026
Old: any "Assessment Year" label
New: "Tax Year 2026-27"
The last line is the quiet one: per the TaxGuru note above, a challan put against the wrong year shows up later as a short-payment default on a statement that was never short. Check the year on the challan screen before you pay.
Common questions
194C ka naya section number kya hai?
Section 393(1), Table serial 6(i), for payments to a contractor such as a coach operator, caterer or ad agency: 1% for an individual/HUF, 2% otherwise, above a ₹30,000 single bill or ₹1,00,000 a year.
Do I file my FY 2025-26 tax audit on the new Form No. 26?
No. It stays on Form 3CA or 3CB with 3CD, under old section 44AB, due 21 October 2026, ITR for audit cases due 21 November 2026. Form No. 26 applies from tax year 2026-27, first used in 2027.
Form 60 ki jagah kaunsa form aaya hai?
Form No. 97, the no-PAN declaration for specific transactions such as cash above ₹1,00,000 to a hotel or event manager, or a bill above ₹2,00,000 for one transaction. The statement of these declarations is now Form No. 98, filed only by audited bill issuers that received them.
The short version
- Period decides the Act, not filing date: FY 2025-26 stays on 1961 numbers (audit due 21 Oct 2026, ITR 21 Nov 2026); tax year 2026-27 onward uses the 2025 Act.
- TDS now lives in section 393, presumptive tax in 58, tax audit in 63, the cash-expense limit in 36(4), the ₹2 lakh cash-receipt bar in 186.
- TCS on an overseas package is 2% from the first rupee; no client PAN jumps it to 5%.
- TDS and TCS returns and certificates for tax year 2026-27 use the Income-tax Rules, 2026 forms (take the numbers from your TDS software); FY 2025-26 still files on the old forms.
- Form 60 is now Form 97, Form 61 is Form 98; both apply only to specific high-value transactions, not every booking.
- Update invoice and vendor-letter wording for anything relating to 1 April 2026 onward; leave old-year documents alone, and confirm with your CA before filing.