Advance tax instalment schedule: staged payments and a single-instalment rule for presumptive taxpayers streamline compliance and revenue flow.
Clause 408 requires assessees to pay advance tax in staged instalments during the tax year, with progressive minimum thresholds and specified due dates, and treats amounts paid on or before the last day of the tax year as advance tax. It provides a single-instalment exception for presumptive taxpayers and cross-references the statutory computation provision for determining current income, while updating terminology and certain cross-references that will require harmonisation with other provisions.

Advance tax orders: AO may require payment based on the higher of assessed or returned income, with taxpayer estimation rights.
Clause 407 authorises the Assessing Officer to order advance tax from persons already assessed, specifying a specified sum-the higher of the latest assessed income or subsequently returned income-and an instalment schedule, with such orders and any amendments requiring accompanying notices of demand and adherence to prescribed timing and procedural safeguards.

Advance tax self assessment: Bill emphasizes taxpayer initiated instalments and mid year revision, shifting reliance onto voluntary compliance.
Clause 406 requires every person liable to pay advance tax to self assess and remit instalments based on the specified sum, defined as the assessee's estimate of current income, calculated by the cross referenced methodology and paid by statutory due dates; taxpayers may increase or reduce subsequent instalments to accord with revised estimates, while the clause itself does not set out administrative order powers.

Advance tax computation: formula-based method clarifies net tax after TDS/TCS credits and tightens credit conditions.
Clause 405 adopts a formulaic computation of advance tax: A = B - C, where B is tax on the "specified sum" and C is TDS/TCS deductible only if the income is included in the specified sum and the deductor/collector has actually credited/paid or received/debited the income post deduction/collection. Net agricultural income is included by reference to assessing officer orders or the assessee's estimate as applicable. The clause modernises drafting and omits the prior HUF specific provision, raising potential gaps.

Advance tax liability retained; payable during the tax year when computed tax meets the statutory threshold, preserving continuity.
Clause 404 requires payment of advance tax during the tax year when the amount of tax "as computed under this Part" for that year reaches the statutory threshold, linking liability to the year of income accrual, incorporating deductions, exemptions and set offs in computation, and using the threshold to exclude small liabilities from procedural advance payments.

Advance tax liability clarified: pay tax on current income during the tax year, with a narrow senior citizen exemption.
Clause 403 requires payment of advance tax during the tax year on an assessee's current income, defined as the total income chargeable to tax for that tax year, and exempts resident individuals aged sixty or above who have no income under "Profits and gains of business or profession." The provision replaces earlier temporal terms with "tax year" and references mechanisms within "this Part," indicating structural reorganization and necessitating clear definitions and transitional guidance.

PAN non compliance increases withholding and collection rates and invalidates declarations, expanding PAN obligations to both TDS and TCS.
Clause 397(2) mandates furnishing and quoting of PAN by deductees and collectees, invalidates certain declarations and applications where PAN is absent, and requires deductors/collectors to apply prescribed higher rates of TDS and TCS in the absence of PAN. The clause covers both TDS and TCS, provides exemptions for specified non resident scenarios and specified payments, caps TDS on certain rent payments at the last month's rent, and emphasizes comprehensive documentation and reporting obligations to enhance traceability and enforcement.

Centralized processing of withholding statements enables automated determination and intimation of amounts payable or refundable.
Centralized processing creates an automated, unified mechanism for TDS and TCS statements, including correction statements, requiring rectification of arithmetical errors and apparent incorrect claims, computation of interest and fees on adjusted amounts, adjustment against prior payments, issuance of an intimation within one year from the end of the tax year, and grant of refunds; the Board may establish a centralized processing scheme and must address interpretive gaps such as the undefined scope of "incorrect claim apparent" and the tax year/financial year distinction.

Tax Deduction and Collection Account Number mandated for deductors and collectors to enhance tracking and reporting under the new bill
Clause 397(1) requires every person responsible for deducting or collecting tax to apply for and, when allotted, quote a Tax Deduction and Collection Account Number (TDCAN) in all prescribed TDS/TCS documents; it prevents duplication, allows prescribed timelines and forms, and provides targeted exemptions including notified persons and categories cross referenced to other provisions.

Deemed assessee in default: consolidated TDS/TCS consequences including interest, asset charge, and conditional relief.
Clause 398 deems persons required to deduct or collect tax who fail to deduct, collect, or remit to be assessee in default, subject to interest, recovery and a statutory charge on assets. A conditional exception applies where the payee has reported and paid the income tax and an accountant's certificate in the prescribed form is furnished; interest is bifurcated between pre-collection and post-collection periods and must be paid before filing the relevant statement. The clause sets a limitation period for default orders and requires satisfaction of good and sufficient reasons before penalties are imposed.

TDS/TCS reporting modernization: unified mandates for remittance, verified statements, non-resident reporting and six-year corrections.
Clause 397(3) mandates that every person responsible for deduction or collection, including employers and designated government officers, remit deducted or collected tax to the Central Government within prescribed timelines and furnish verified statements in prescribed forms; it requires the prescribed authority to issue statements to buyers/licensors/lessees, mandates reporting of payments to non-residents irrespective of taxability, recognises a six-year correction window for statement amendments, compels specified financial institutions to file statements for certain payments, and preserves liability where tax collection fails.

Lower TCS certificates permit reduced collection when taxpayer income justifies it, with mandatory certified issuance and electronic processes.
Clause 395(3) permits buyers, licensees or lessees to apply to the Assessing Officer for collection of tax at a lower rate where the AO is satisfied that the applicant's total income justifies lower collection; the AO issues a certificate specifying the reduced rate and validity, subject to rules and to cancellation after hearing. Clause 395(4) requires every person deducting or collecting tax to issue a certificate to the deductee or collectee specifying the amount, rate and other prescribed particulars within prescribed timelines, with electronic issuance anticipated.

Tax collection at source: consolidated TCS framework aligns rates, preserves declaration exemptions and prevents double collection.
Clause 394 consolidates TCS rules into a table specifying liable collectors, receipt categories, tiered rates and timing (earlier of debit or payment), retains a declaration based exemption for residents using goods for manufacturing/processing/production or power generation with prescribed duplicate filings and reporting, incorporates anti overlap safeguards preventing double collection on remittance and tour package transactions, and adopts existing definitions for forest produce while omitting certain granular definitions and the lower/nil TCS certificate mechanism pending further rulemaking.

PAN furnishing requirement: higher withholding rates apply where PAN is not provided, with specified carve-outs for non-residents.
Clause 397(2) requires recipients and payers of amounts subject to TDS/TCS to furnish and quote a valid PAN; failure to do so triggers withholding or collection at enhanced statutory rates, invalidates declarations or applications for lower or nil deduction absent PAN, and mandates PAN disclosure in all transactional documents, while providing specified exemptions for certain non-residents and a cap on TDS for rent in defined cases.

TDS/TCS reporting obligations expanded: mandatory electronic payment, verified statements, correction window and liability for non-collection.
Clause 397(3) requires prompt payment of tax deducted or collected to the Central Government and the furnishing of verified statements in prescribed forms and manner. It expands reporting to include payments to non-residents, special procedures for government remittances without challans, and interest payments below thresholds by specified entities. The clause permits correction statements within six years and imposes liability to pay where tax is not collected, while delegating operational details to prescribed authorities and mandating electronic filing and verification.

Bar against direct demand protects assessees from paying tax already deducted at source, placing recovery obligations on the deductor.
A statutory bar prevents authorities from calling an assessee to pay tax to the extent tax has been deducted at source: Clause 401 of the 2025 Bill mirrors Section 205 of the 1961 Act by protecting the assessee where tax was actually deducted, limiting liability "to the extent" of deduction and leaving recovery, penalties, and prosecution against the deductor for any non deposit.

Person responsible for paying: allocation of TDS/TCS duties to payers, principal officers, authorised remitters and government payors.
Clause 402(27) designates the person responsible for paying for TDS/TCS according to payment type and payer status: employers (and company principal officers) for salaries; payers (and company principal officers) for interest and other chargeable sums; authorised persons for remittances to NRIs; payers for reporting payments to non-residents irrespective of chargeability; and drawing and disbursing officers (or the actual payor) for government payments, with cross-references to FEMA and updated agent definitions.

TDCAN requirement modernisation centralises TAN/PAN linkage and reporting, tightening compliance and correction procedures.
Clause 397 requires persons deducting or collecting tax to apply for and, once allotted, quote a Tax Deduction and Collection Account Number (TDCAN) in all prescribed documents; it consolidates deduction and collection numbers, sets out statutory carve-outs and government-notified exemptions, integrates PAN linkage and consequences for non-furnishing, and centralises payment, reporting and correction mechanisms including procedures for non-resident payments and government offices.

TDS/TCS certificate obligation requires deductors and collectors to issue prescribed certificates enabling tax credit and digital reporting.
Clause 395(4) requires every person deducting or collecting tax at source to issue a certificate to the deductee/collectee specifying the amount of tax deducted or collected, the rate, and any other prescribed particulars within a prescribed period; employers who pay tax on behalf of employees must similarly furnish a certificate confirming payment to the Central Government. The clause covers both TDS and TCS, delegates format and timing to subordinate rules, and anticipates digital and harmonized implementation while leaving rectification, duplicate issuance and penalty mechanics to rules.

Non-exclusivity of source-based tax collection allows authorities to pursue additional recovery methods when payments are provisional.
Clause 390(4) states that taxes paid by deduction or collection at source, advance payments and specified payments operate in addition to any other mode of tax collection to discharge the liability for income assessed for a tax year, preserving the tax authority's power to pursue alternative recovery measures where such anticipatory payments are provisional, insufficient, or incorrect while allowing credit or refund for any excess.