Section 195 → Section 228
TDS on payments to Non-Residents
Quick Answer
Section 195 of the Income Tax Act, 1961 (TDS on payments to Non-Residents) corresponds to Section 228 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 195
Under the Income Tax Act, 1961, Section 195 governs TDS on payments to non-residents. Any person paying any sum (taxable in India) to a non-resident must deduct tax at the 'rates in force'.
From 1st April 2026, the same subject sits at Section 228 of the Income-tax Act, 2025 — retained and renumbered as Section 228 of the Income-tax Act, 2025. Retained. Requires filing of Form 15CA and 15CB before making the remittance through a bank.
For Section 195, the practical impact is rated Critical. The gateway for all foreign remittances leaving India.
Sec 195
Provision Summary
Any person paying any sum (taxable in India) to a non-resident must deduct tax at the 'rates in force'.
Sec 228
Provision Summary
Retained. Requires filing of Form 15CA and 15CB before making the remittance through a bank.
Key Changes & Highlights
- DTAA (Tax Treaty) benefits can be claimed at the time of deduction if TRC (Tax Residency Certificate) is provided.
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Frequently Asked Questions
What is Section 195 of the Income Tax Act, 1961 about?
Section 195 of the Income Tax Act, 1961 covers TDS on payments to non-residents. Any person paying any sum (taxable in India) to a non-resident must deduct tax at the 'rates in force'.
Which section replaces Section 195 in the Income-tax Act, 2025?
Section 195 of the Income Tax Act, 1961 maps to Section 228 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Requires filing of Form 15CA and 15CB before making the remittance through a bank.
What is the impact of the change to Section 195 under the new tax code?
The transition impact for Section 195 is rated Critical. The gateway for all foreign remittances leaving India.
What should I watch out for when Section 195 moves to the 2025 code?
DTAA (Tax Treaty) benefits can be claimed at the time of deduction if TRC (Tax Residency Certificate) is provided. These points are specific to Section 195 (TDS on payments to Non-Residents).
Disclaimer: This mapping of Section 195 (TDS on payments to Non-Residents) to Section 228 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 195 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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