The Central Board of Direct Taxes (CBDT) has released Draft Form No. 130, proposing a new consolidated TDS certificate under Section 395 of the Income-tax Act. The draft form is intended to streamline certification of tax deducted at source on salary, pension, and specified interest income, bringing greater standardisation and reporting clarity for employers, banks, and deductors.
The proposed Form 130 will apply to:
- Salary income taxed under section 392
- Pension income
- Interest income of specified senior citizens under section 393(1)
What is Draft Form No. 130?
Form 130 is designed as a comprehensive TDS certificate, replacing fragmented disclosures currently spread across multiple documents. It captures deductor details, payee particulars, tax computation, and proof of deposit in a single structured format.
The form is divided into three major components:
- Part A: Deductor and deductee details
- Part B: Summary of tax deducted and deposited
- Part C: Detailed annexures based on the nature of income
Part A: Deductor and Payee Information
Part A captures essential identification details of:
- Employer or specified bank
- Employee or specified senior citizen
This includes PAN, TAN, address, contact details, tax year, and period of employment or income coverage. The format ensures uniform reporting of identity and jurisdictional data, reducing mismatch risks during verification.
Part B: Tax Deduction and Deposit Details
Part B provides a quarter-wise summary of income paid and tax deducted, along with:
- Rate of deduction
- Amount of tax deducted
- Amount deposited or adjusted
It separately tracks tax paid through:
- Book adjustment (BIN-based reporting)
- Challan mode (CIN-based reporting under TIN 2.0)
This dual reporting mechanism ensures accurate reconciliation with Form 137 and government payment records.
Part C (Annexure-I): Salary Income Computation
Annexure-I applies to employees covered under section 392 and contains a detailed salary computation framework, including:
- Gross salary, perquisites, and profits in lieu of salary
- Exempt allowances under section 11
- Deductions under section 19
- Chapter VIII deductions (life insurance, health insurance, pension schemes, donations, etc.)
- Computation of taxable income, tax liability, rebate, surcharge, cess, and net tax payable
This annexure closely mirrors return-level computation, enhancing pre-filled accuracy and audit traceability.
Part C (Annexure-II): Pension and Interest Income for Senior Citizens
Annexure-II is specifically designed for the specified senior citizens, covering:
- Pension income
- Interest income paid by specified banks
- Deductions under Chapter VIII
- Computation of tax payable after rebate and relief
This targeted annexure simplifies compliance for senior citizens who rely on banks for tax deduction on pension and interest income.
Click here to download the Format of Form No. 30
Key Compliance Features in Draft Form 130
Some notable compliance-friendly features include:
- Mandatory declaration by the person responsible for deduction
- Standardised disclosure of surcharge and health & education cess
- Pre-filling of certain fields where data is available
- Separate treatment for government and non-government deductors
- Clear guidance for cases involving multiple employers during the year
Practical Impact for Employers, Banks and Deductors
Once notified, Form 130 is expected to:
- Reduce duplication in TDS certificates
- Improve matching with TDS returns and Form 122/137
- Enhance transparency for employees and senior citizens
- Lower reconciliation disputes during assessments
For tax professionals, the form signals a shift towards computation-level disclosure at the certificate stage itself, aligning TDS reporting with the new compliance architecture under the Income Tax Act.
What Happens Next?
As this is a draft form, stakeholders may submit feedback before final notification. Once implemented, Form 130 is likely to become a central compliance document for salary, pension and specified interest income TDS certification.
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