Critical May 2026 Income Tax Compliances for Gems & Jewellery Businesses Under New Law
From 1 April 2026, the direct tax regime undergoes a fundamental shift with the commencement of the Income-tax Act, 2025 (ITA 2025) along with the **Income-tax Rules, 2026. At the same time, several compliance obligations for **FY 2025–26** (ended on 31 March 2026) will continue to be governed by the **Income-tax Act, 1961** and **Income-tax Rules, 1962.
For gems and jewellery businesses, where TDS/TCS, high-value transactions, bullion/jewellery purchases, and stringent reporting are routine, this overlapping framework in May 2026 requires very careful handling. Assessees will need to parallelly track:
- Compliances relating to FY 2025–26 (still under the
Income-tax Act, 1961) - Compliances triggered on or after 1 April 2026 (governed by
Income-tax Act, 2025)
This article sets out, in a structured manner, all key May 2026 deadlines and how gems and jewellery entities should navigate the dual-law environment.
1. Dual-Law Transition: How to Decide Which Act Applies
1.1 Effective dates and overarching principles
From a compliance perspective, the following broad rules apply:
New regime applicability
- The
Income-tax Act, 2025along with theIncome-tax Rules, 2026governs:- All events, transactions, deductions, collections and filings that arise on or after 1 April 2026
- All ongoing obligations that are specifically assigned to the new Act by its provisions
- The
Old regime continuity
- The
Income-tax Act, 1961read with theIncome-tax Rules, 1962continues to apply to:- All compliances linked to FY 2025–26 (i.e., the year ending 31 March 2026)
- Any reporting, TDS/TCS or other filings which relate to transactions or periods prior to 1 April 2026
- The
Important
The relevant law is generally determined by the period or transaction to which the compliance relates, and not merely the date of filing.
1.2 Why this matters particularly for gems and jewellery businesses
Businesses in the gems and jewellery space typically have:
- Significant bullion and jewellery purchases from multiple vendors
- High-frequency and high-value sales, including to retailers, wholesalers and end customers
- Regular obligations for TDS, TCS, and Statement of Financial Transactions (
Form 61A) - Extensive vendor management and withholding at various stages of the supply chain
Any confusion over whether a particular compliance falls under Income-tax Act, 1961 or Income-tax Act, 2025 can result in:
- Wrong forms or wrong legal references being used
- Late fee, interest, or penalties
- Mismatches in ERP/ledger controls or statutory reporting
Assessees in this sector should therefore segregate their May 2026 compliances by clearly tagging each obligation to either FY 2025–26 (old law) or FY 2026–27 (new law).
2. May 2026 Compliances Under Income-tax Act, 1961 (For FY 2025–26)
Compliances connected to transactions up to 31 March 2026 will remain under the Income-tax Act, 1961 and Income-tax Rules, 1962. These include TDS/TCS certificates, quarterly statements, and specified reports.
2.1 Due date calendar – old law compliances
Below is a consolidated list of important obligations falling due in May 2026 under the Income-tax Act, 1961:
(a) TDS certificates for specified sections – March 2026
- Compliance: Issue of TDS certificates for deductions made under:
section 194-IAsection 194-IBsection 194M
for the month of March 2026
- Due date: 15 May 2026
These sections typically cover deductions relating to:
- Transfer of immovable property (
section 194-IA) - Rent in certain situations (
section 194-IB) - Payments to resident contractors or professionals by specified non-audit assessees (
section 194M)
Where a gems and jewellery entity (for instance, a firm owned by Mr. Sharma) has property-related or other covered payments in March 2026, the associated TDS certificates must be issued under the old law by this date.