CBDT Proposes New Income Tax Form 130 to Simplify TDS Reporting

CBDT Income Tax Form 130 (India): What it is, who needs it, and how to use it (Tax year 2026; returns filed in 2027)

Current as of Tuesday, February 10, 2026.

The Central Board of Direct Taxes (CBDT) in India has proposed Income Tax Form 130 as a single, consolidated TDS certificate. It is designed to bring Salary, Pension, and specified senior citizen interest reporting into one certificate.

This is an India-tax document under the Income-tax Act, 2025 and the draft Income-tax Rules, 2026. It is not related to U.S. immigration. It is also not related to USCIS Form I‑130.

For NRIs and immigrants abroad, the practical point is simple. If you still earn Indian salary, pension, or certain bank interest, Form 130 may become the main document you use to support your Indian return. It can also affect how you document foreign taxes for U.S. reporting.

⚠️ Warning: Do not confuse Income Tax Form 130 (India) with USCIS Form I‑130. They are unrelated forms from different governments.

Quick reference box (Form 130)

📅 Deadline Alert: Stakeholder feedback on the draft rules is open until February 22, 2026. A formal notification is expected in March 2026.

1) Overview: CBDT Form 130 proposal and scope

The CBDT proposal introduces Income Tax Form 130 as a consolidated TDS certificate. It aims to unify reporting for:

• Salary
• Pension
• Senior citizen interest (in the specified framework)

The proposal sits within the rollout of the Income-tax Act, 2025 and the broader Income-tax Rules, 2026. The intent is fewer documents and cleaner matching between payer reporting and taxpayer claims.

For many taxpayers, this is meant to replace the familiar “bundle” of salary and TDS paperwork. For NRIs, it can reduce back-and-forth with employers and banks when you need TDS evidence.

2) Official statements and timeline

On February 8, 2026, India’s Ministry of Finance issued a Press Information Bureau (PIB) release announcing draft rules and a stakeholder consultation period.

CBDT Chairman Ravi Agarwal has been quoted in the same context, emphasizing simplification and reducing forms so compliance is smoother.

The proposed timeline is:

• Feedback window ends: February 22, 2026
• Formal notification expected: March 2026
• Implementation readiness target: April 1, 2026 (payroll and banking system updates)

If you are an NRI employee on Indian payroll, you may see changes during the FY 2026–27 pay cycle. Keep copies of old certificates during any transition year.

3) Form 130 structure and content (Part A, Part B, Part C)

The draft design divides Form 130 into three parts. Think of it as “identity,” then “TDS summary,” then “working papers.”

Part A: Deductor and deductee details

Part A is the “who is paying and who is receiving” section. Expect it to cover:

• Deductor identity (employer or bank), typically including TAN and address details
• Deductee identity (you), typically including PAN and basic personal details
• The reporting period and certificate identifiers

Common NRI issue: mismatched PAN or name formatting. This can cause downstream mismatches with Form 26AS or other annual tax statements.

Part B: Quarterly tax summary

Part B is the high-level quarter-by-quarter view. It generally supports quick checks like:

• TDS deducted each quarter
• TDS deposited each quarter
• Totals for the year

This section matters when you change jobs mid-year, or when pension starts part-way through the year. It also helps you reconcile any “why is my refund delayed” questions.

Part C: Annexures with detailed taxable income computation

Part C is the detailed computation area. It is designed to show how taxable income and TDS were computed. The draft description includes items such as:

• Exemptions considered
• Deductions (including the “Chapter VIII” deduction framework referenced in the proposal)
• The resulting taxable income and tax calculation trail

Why Part C matters: It can reduce disputes over what payroll assumed versus what you claim. It also gives NRIs a stronger paper trail if they need to support foreign tax credit positions abroad.

The proposal states this consolidated reporting covers items under Section 395 of the Income-tax Act, 2025, and consolidates reporting for Salary, Pension, and Senior Citizen Interest under that framework.

4) Legal alignment and renumbering context (why “Form 130” now)

The proposal ties Form 130 to the new numbering and section alignment under the 2025 Act and 2026 Rules.

Key alignment points in the draft description:

• Salary income referenced under Section 392
• Pension and interest for specified senior citizens referenced under Section 393(1)
• Consolidated certificate referenced under Section 395

It is also part of a broader renumbering effort. Nearly 400 forms are proposed to be consolidated into about 190. One example in the draft is Form 24Q being renumbered to Form 138. In that same spirit, the salary certificate becomes Form 130, replacing legacy Form 16 and fragmented disclosures.

5) Implications for stakeholders (employees, senior citizens, employers, banks)

Salaried employees

Most salaried taxpayers should expect:

• A more complete certificate that mirrors payroll computations
• Faster return preparation, since more data should be in one place

Senior citizens (age 75+)

The proposal highlights that senior citizens aged 75+ may benefit where pension and interest are handled through the same bank. In certain cases, correct tax deduction at source can support an ITR filing exemption concept referenced in this policy area.

Treat this carefully. Filing outcomes depend on your facts and the final notified rule text.

Employers and banks

Employers and banks are expected to update systems by April 1, 2026. That includes payroll, TDS reporting workflows, and certificate generation.

During the changeover, ask your payroll team which certificate you will receive for FY 2026–27, and when it will be available.

6) Common errors and how to avoid them (NRI documentation edition)

Here are frequent issues that create mismatches or delays:

• PAN not updated with employer or bank records
• Incorrect residential status assumptions in payroll setup for NRIs
• Missing or inconsistent quarterly TDS deposits shown in Part B
• Deductions or exemptions applied in payroll but not supported by proofs
• Using the wrong document abroad, such as mixing Form 16, Form 26AS, and the new Form 130 without reconciling totals

If you are in the U.S., keep in mind that U.S. resident aliens generally report worldwide income. Residency is determined under IRS rules in IRS Publication 519. See the IRS PDF: Publication 519. For broader cross-border reminders, the IRS portal for international taxpayers is the safest starting point.

Supporting documents to keep with Form 130

Even though you typically do not “submit” Form 130 yourself, you should retain supporting records in case of questions:

• Employer payroll statements, salary slips, and final settlement papers
• Bank pension credit statements
• Bank interest certificates and fixed deposit statements (if applicable)
• Proofs used for deductions and exemptions claimed through payroll
• Any reconciliation documents used to match TDS totals to annual tax statements

If you also file in the U.S., keep copies for your preparer. They may be needed when reviewing foreign tax credit items or income sourcing. IRS form instructions are on forms and publications.

Submission instructions and confirmation tips (what to do in 2026–2027)

Form 130 is a certificate you receive, not a form you typically upload yourself. Your action items are about confirming accuracy and retaining proof.

1. Confirm you received the right certificate. Ask your employer or bank whether they will issue Form 130 for FY 2026–27.
2. Check Part A details first. Verify PAN, name spelling, and the payer’s identifiers.
3. Reconcile Part B totals. Match quarterly TDS totals to what your payer says was deposited.
4. Review Part C computations. Make sure deductions and exemptions reflect what you documented.
5. Retain the final PDF and backups. Keep it with your ITR working papers and bank/employer support.

Next steps (as of Feb 10, 2026):

• Watch for the final CBDT notification expected in March 2026
• Employers and banks should be system-ready by April 1, 2026
• If you are an NRI with U.S. tax filing duties, align your India documents early for tax year 2026 (returns filed in 2027)

⚠️ Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.