The Statutory Brief

IT Act 1961 → 2025 / Section 201

TDS

Section 201 → Section 398

Consequences of TDS/TCS default: assessee in default and interest

Section 201 of the old Income-tax Act, 1961 · new section 398 under the Income-tax Act, 2025

New reference Section 398

Income-tax Act, 1961Section 201

  • Deductor treated as assessee in default
  • Interest 1% p.m. for non-deduction, 1.5% p.m. for late payment
  • No default if payee has paid tax and accountant's certificate furnished

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 398

  • Same, now section 398
  • 1% per month (not deducted) and 1.5% per month (deducted, not paid)
  • Accountant's certificate relief (payee paid tax) retained
  • Interest to be paid before filing the TDS statement

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; rates unchanged.

Practice notes

  • Processing of TDS statements (old 200A) is section 399.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the interest on late TDS payment under the new Income Tax Act 2025?

Section 398(3): 1% per month from when TDS was deductible till deduction, and 1.5% per month from deduction till payment.

What is section 201 called in the new Income-tax Act, 2025?

Section 201 of the Income-tax Act, 1961 corresponds to Section 398 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 201 under the new Income Tax Act?

Renumbered; rates unchanged.

Is section 201 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 201 of the 1961 Act. Section 398 of the 2025 Act applies from tax year 2026-27.

Related sections

271C→448Penalty for failure to deduct TDS276B→476Prosecution for failure to deposit TDS234E→427Late fee for delay in filing TDS/TCS statements (and SFT)