The Income Tax Department has inoduced Draft Form No. 141, and it is being viewed as a significant reform in India’s tax compliance framework.
If you are an individual, a Hindu Undivided Family (HUF), a property buyer, a tenant paying high rent, or someone investing in crypto or NFTs, this development may directly affect you.
Under the Income Tax Act, 2025, Draft Form 141 proposes a consolidated challan-cum-statement system. In simple terms, the payment of Tax Deducted at Source (TDS) and the reporting of TDS details will now happen together in one electronic submission.
Let us understand what this means and why it is important.
Draft Form 141: New TDS Compliance Rule 2026 Draft Form 141 update under Income Tax Act 2025 explaining new TDS compliance rules for rent, property purchase, crypto VDA, PAN reporting and deadline from April 2026.
What Is Draft Form 141?
Form 141 is designed to combine two separate compliance steps into one:
- TDS payment (challan)
- TDS reporting (statement)
Earlier, taxpayers had to first deposit TDS and then file a separate statement providing detailed transaction information. This often resulted in:
- Data mismatches
- Filing errors
- Delays in reconciliation
- Notices due to technical inconsistencies
With Draft Form 141, both payment and reporting are integrated into a single structured digital format. This is expected to reduce compliance burden and improve accuracy.
Who Will Be Affected?
Draft Form 141 mainly applies to:
- Individuals deducting TDS
- Hindu Undivided Families (HUFs)
- Property buyers deducting TDS
- Tenants paying high-value rent
- Persons transferring virtual digital assets (crypto/NFTs)
- Individuals making specified payments to contractors or professionals
If you fall under any of these categories, it is important to understand the new requirements.
TDS on Rent – Increased Transparency
Individuals and HUFs deducting TDS on rent will now be required to provide more detailed disclosures.
The following details must be reported:
- Property address
- Property type (land, building, or both)
- Tenant PAN
- Landlord PAN
- Period of tenancy
- Total rent paid during the year
- TDS rate applied
- Date of deduction
This enhanced reporting strengthens transparency in rental income tracking. The department can match rent payments and declared rental income more efficiently through PAN-based systems.
TDS on Transfer of Immovable Property
Real estate transactions involve significant amounts and are closely monitored from a tax perspective.
Under Draft Form 141, buyers must disclose:
- Property address
- Property type
- Buyer PAN
- Seller PAN
- Stamp duty value
- Total sale consideration
- Instalment-wise payment details
- Previous acknowledgement numbers (if applicable)
This structured format allows the tax authorities to:
- Compare sale consideration with stamp duty value
- Track staggered payments
- Detect potential undervaluation
- Improve data reconciliation
Property buyers and sellers must maintain accurate documentation to ensure smooth compliance.
Dedicated Reporting for Virtual Digital Assets (Crypto and NFTs)
One of the most important additions in Draft Form 141 is a separate reporting schedule for Virtual Digital Assets (VDAs).
This includes:
- Cryptocurrency transactions
- NFT transfers
- Exchange of one digital asset for another
Transactions are categorized into:
- Cash consideration
- Consideration in kind
- VDA-to-VDA exchange
The following details must be provided:
- Tax deposited amount
- BSR code
- Challan serial number
- Date of deposit
This aligns with India’s existing VDA taxation framework, which includes:
- 30 percent tax on gains
- 1 percent TDS on transfer
With structured and consolidated reporting, monitoring of digital asset transactions is expected to become more robust.
Other Important Features of Draft Form 141
Additional key features include:
- Mandatory PAN for both deductor and deductee
- Pre-filled fields where applicable
- Reporting of higher TDS rates if triggered
- Disclosure of certificate number if a lower deduction certificate is used
- Consolidated reporting of tax, interest, and late fees
- Integration with Challan Identification Number (CIN)
These measures aim to standardize reporting and minimize manual intervention.
Why This Reform Matters
Tax professionals consider Draft Form 141 a structural modernization of the TDS system.
It is expected to:
- Improve transparency in high-value transactions
- Reduce filing errors
- Strengthen scrutiny of property and crypto deals
- Enhance digital reconciliation
- Increase real-time monitoring of TDS compliance
The reform reflects a broader shift toward digitization and data-driven tax administration.
What Should Individuals and HUFs Do Now?
If you are involved in high-value transactions, consider taking the following steps:
- Verify PAN details of all parties involved.
- Maintain proper documentation such as rent agreements, sale deeds, payment proofs, and challans.
- Track instalment payments carefully in property transactions.
- Stay updated on the final notification and implementation timeline.
Preparation in advance will reduce the risk of penalties and compliance challenges once the form becomes mandatory.
Conclusion
Draft Form No. 141 marks a significant development in TDS compliance under the Income Tax Act, 2025.
By combining payment and reporting into a single electronic submission, the government aims to simplify procedures while strengthening oversight.
For individuals and HUFs dealing in rental payments, property transactions, or digital assets, it is important to stay informed and prepared.
This reform signals a clear direction toward structured reporting, enhanced transparency, and stronger digital enforcement in India’s tax system.