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When Tax Law Learns to Reflect Human Realities Tax laws are generally regarded as instruments primarily designed to collect government revenue and ensure compliance. However, modern tax legislation increasingly reflects broader administrative and social objectives. It seeks to balance strict financ
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FAQ :
Clause 72 of the Finance Bill 2026 introduces several reforms to the Tax Deduction at Source (TDS) system under the new Income-tax Act, 2025, focusing on technical rationalisation, institutional parity, humanitarian relief, and digital compliance.
Most amendments under Clause 72, including technical rationalisation, inclusion of co-operative banks, and humanitarian relief for accident compensation interest, are effective from 1 April 2026. The digital compliance reforms regarding electronic furnishing of declarations and quarterly submission take effect from 1 April 2027.
Clause 72 introduces humanitarian relief by removing the Tax Deduction at Source (TDS) on interest awarded by a Motor Accidents Claims Tribunal, provided the compensation amount does not exceed £50,000 during the tax year for non-individual recipients. This aims to alleviate financial hardship for accident victims.
Clause 72 extends institutional parity by including co-operative banks and co-operative land mortgage banks in the TDS exemption provisions, ensuring uniform treatment across different types of banking institutions.
Clause 72 introduces a digital compliance reform allowing taxpayers to furnish declarations for non-deduction or lower deduction of TDS electronically through depositories, provided their units or securities are held in demat form and listed on a recognised stock exchange. This streamlines the process and reduces paperwork.
The reporting discipline is strengthened by changing the submission of declarations from a monthly basis to a quarterly basis. The person responsible for paying income must now deliver declarations received from assessees or depositories to the prescribed income-tax authority by the seventh day of the month following the end of each quarter.
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