TDS and TCS provisions play a critical role in tax compliance and cash flow management. While past Budgets have sought to simplify the framework, multiple rates and procedures continued under the Income-tax Act, 2025. Budget 2026 introduces targeted changes to ease compliance and rationalise enforcement. Key TDS & TCS updates include:
▸No TDS on MV Act compensation interest paid to individuals or legal heirs
▸TDS exemption for co-operative banks on interest income (other than securities)
▸Uniform 2% TCS on liquor, scrap, minerals, tendu leaves, LRS & overseas tours
▸No TAN required for resident individuals/HUFs buying property from non-residents
▸Single declaration via depository for dividend & interest income
▸Manpower supply covered as 'work', bringing it under contractor TDS provisions
▸Decriminalisation of TDS defaults and rationalised penalties based on thresholds
