Section 390 of the Income-tax Act, 2025 — TDS, TCS and Advance Tax Payment Framework

In plain language

What Section 390 actually says

Section 390 of the Income-tax Act, 2025 is the opening / framework provision of the chapter dealing with collection and recovery of tax. It does not itself impose any TDS rate or TCS rate. Instead, it lays down the machinery — the ground rules that tell you how income tax is collected during the year, before the final assessment happens. It is the modern re-write of Section 190 of the Income-tax Act, 1961, and it takes effect from 1 April 2026.

In plain words, Section 390 says: tax on your income is not only paid when you file your return at the year-end. The Government collects it as the income arises, through three routes.

• Deduction or collection at source — TDS (tax deducted by the payer, e.g. employer, bank, tenant) and TCS (tax collected by the seller).
• Advance payment of tax — advance tax paid by the taxpayer in instalments during the year.
• Payment under section 392(2)(a) — tax paid by the employer on non-monetary perquisites on the employee's behalf.

Who does it apply to

Section 390 applies to every taxpayer and to every person responsible for deducting or collecting tax. Practically, that means:

• Salaried employees whose employers deduct TDS under section 392;
• Businesses and professionals whose clients deduct TDS under section 393, and who also pay advance tax;
• Banks, tenants, buyers of property, e-commerce operators and others acting as deductors/collectors;
• Sellers who collect TCS under section 394.

Key rules baked into Section 390

• Independent of assessment: Tax under this chapter is payable irrespective of the fact that the regular assessment for that income will happen in a later year. You cannot say "I will pay only at assessment" — TDS/TCS/advance tax obligations are due in the year the income arises.
• Charge under section 4 is not disturbed: Section 390 clarifies that these advance-collection mechanisms do not change the basic charge of income-tax under section 4(1). It is only a method of collecting the same tax earlier.
• In addition to other modes: These routes are in addition to any other lawful mode of recovery. Even if TDS was not deducted, the tax can still be recovered through assessment.
• Tax deducted/collected is your tax: Any amount deducted or collected at source and paid to the Central Government is treated as payment of tax on behalf of the person from whose income/payment it was deducted or collected. So TDS shown in your Form 26AS / Annual Information Statement is credited to you.
• Rule-making power for credit: The Board (CBDT) may frame rules on how credit for TDS/TCS is given — including giving credit to a person other than the one from whom it was deducted (for example, a legal heir, partner, or the actual beneficial owner of income) and specifying the tax year in which the credit is allowed.

How it interacts with related sections

Think of Section 390 as the table of contents for the collection chapter. It points to the operative sections:

• Section 392 — TDS on salaries (old sec. 192), including employer paying tax on non-monetary perquisites [the "392(2)(a)" mode].
• Section 393 — TDS on all other payments — interest, rent, contractor payments, professional fees, commission, purchase of immovable property, etc. This single section consolidates old sections 193 to 194T.
• Section 394 — TCS (old sec. 206C).
• Section 395 — lower/nil deduction certificates (old sec. 197).

Practical implications for you

• Match your credits. Because Section 390 says TDS/TCS is "tax paid on your behalf", you must reconcile your AIS/Form 26AS before filing. Any mismatch can delay your refund.
• Advance tax is still compulsory. If your net tax liability after TDS/TCS exceeds ₹10,000 in a year, you must pay advance tax in instalments (15 June / 15 September / 15 December / 15 March) or face interest.
• No escaping by timing. Since collection is independent of assessment, deductors must deposit on time regardless of when the recipient will file.