TDS compliance is entering a new phase in India. With the Income Tax Act, 2025 and Income Tax Rules, 2026 coming into effect, the familiar Form 26Q has been replaced by Form 140 for reporting TDS on non-salary payments made to residents for transactions governed by the new framework. For finance and HR teams, this transition makes it important to understand what has changed, which form applies to which period, and how quarterly filing works. This guide explains Form 26Q and Form 140, due dates, filing requirements, process, corrections, and common compliance mistakes.
TL;DR
- Form 26Q was the quarterly TDS statement for non-salary payments made to residents under the Income Tax Act, 1961.
- From the new tax framework applicable to transactions from April 1, 2026, Form 140 replaces Form 26Q for the corresponding non-salary TDS reporting.
- Form 140 covers TDS deducted on payments other than salary made to residents.
- The standard quarterly filing due dates are July 31, October 31, January 31, and May 31 for Q1 through Q4 respectively.
- A valid TAN, appropriate filing utility, FVU file, and required verification are important parts of the filing process.
- During the 2026 transition, organizations may need to deal with both legacy Form 26Q and new Form 140 depending on when the underlying TDS obligation arose.
- Accurate deductee information, challan details, tax amounts, and timely filing are essential to avoid mismatches, notices, interest, and late-filing consequences.
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What Is Form 26Q?
Form 26Q was the quarterly statement used by tax deductors to report TDS deducted on payments other than salary made to residents under the Income Tax Act, 1961.
It was commonly used for payments such as professional fees, commission, brokerage, interest, rent, contractual payments, and other specified payments where TDS was applicable. The statement enabled the Income Tax Department to match tax deducted by the payer with the corresponding tax credit of the recipient.
Form 26Q was therefore an important part of the TDS compliance cycle. It connected three major activities: deducting tax from the payment, depositing the tax with the government, and reporting the deduction through the quarterly TDS statement.
Who Filed Form 26Q?
Form 26Q was generally filed by persons responsible for deducting TDS on applicable non-salary payments made to residents.
This could include companies, firms, government organizations, and other entities or persons that had a TDS obligation under the applicable provisions.
The deductor generally needed a valid TAN, or Tax Deduction and Collection Account Number, for applicable TDS compliance. The statement contained information relating to the deductor, deductees, amounts paid or credited, tax deducted, and tax deposited.
What Payments Were Reported in Form 26Q?
Form 26Q covered a broad range of non-salary payments subject to TDS. Depending on the applicable provision, these could include payments such as:
- Professional or technical fees
- Commission and brokerage
- Interest other than certain specified categories
- Rent
- Contractor payments
- Certain payments to resident service providers
- Other specified non-salary payments subject to TDS
The exact TDS requirement depended on the nature of payment, recipient, applicable threshold, timing, and other conditions under the law.
What Is Form 140?
Form 140 is the new quarterly TDS statement for non-salary payments made to residents under the Income Tax Act, 2025 and Income Tax Rules, 2026.
The Income Tax Department identifies Form 140 as the form that replaces Form 26Q for this category of TDS reporting under the new tax framework.
In other words, organizations familiar with Form 26Q should understand Form 140 as the corresponding new-framework quarterly statement for TDS on non-salary payments to residents.
This change is particularly relevant for finance, payroll, accounts payable, and HR teams because tax compliance processes need to distinguish between transactions governed by the old Act and those governed by the new Act.
Form 26Q vs Form 140
| Particular | Form 26Q | Form 140 |
| Tax framework | Income Tax Act, 1961 | Income Tax Act, 2025 |
| Nature | Quarterly TDS statement | Quarterly TDS statement |
| Payments | Non-salary payments to residents | Non-salary payments to residents |
| Applicability | Relevant to transactions governed by the old framework | Relevant to transactions governed by the new framework |
| Filing frequency | Quarterly | Quarterly |
| Q1 due date | July 31 | July 31 |
| Q2 due date | October 31 | October 31 |
| Q3 due date | January 31 | January 31 |
| Q4 due date | May 31 | May 31 |
The most important point is that Form 140 does not mean organizations should simply stop considering historical Form 26Q obligations. The transition depends on when the relevant TDS obligation arose.
Form 26Q to Form 140: What Changed in 2026?
The introduction of Form 140 is part of the broader transition to the Income Tax Act, 2025 and Income Tax Rules, 2026.
For the transition period, the governing framework depends on when the payment or credit giving rise to the TDS obligation occurred. The Income Tax Department has clarified that transactions up to March 31, 2026 can continue to be governed by the old Act, while transactions from April 1, 2026 fall under the new framework where applicable.
This creates an important transitional compliance requirement for organizations.
Which Form Applies During the Transition?
For TDS relating to January–March 2026, the old quarterly TDS forms, including Form 26Q, continue to apply where the transaction is governed by the Income Tax Act, 1961.
For TDS relating to April–June 2026 and subsequent periods under the new framework, Form 140 is used for non-salary resident payments. The Income Tax Department specifically identifies Form 140 as the replacement for Form 26Q.
Therefore, organizations should not treat April 1, 2026 as simply a software-form change. They should ensure their accounting and TDS processes correctly determine which law and form apply to each transaction.
Pro Tip: Build a transition checklist around the transaction date, applicable tax framework, TDS deduction, challan, and quarterly statement. This is safer than changing every historical Form 26Q process to Form 140 at once.
Who Needs to File Form 140?
Form 140 is relevant to persons who deduct TDS on applicable non-salary payments made to residents under the new tax framework.
This can include businesses and organizations making payments where TDS is required, including companies, firms, government entities, and other applicable deductors.
The key trigger is not simply the size or type of organization. The organization or person must have an applicable TDS obligation for the relevant transaction.
What Are the Prerequisites for Form 140 Filing?
Before filing Form 140, a deductor should generally have:
- A valid TAN registered on the income-tax e-filing portal.
- The relevant TDS transaction and deductee information.
- The latest applicable Return Preparation Utility.
- A valid FVU file generated after validation.
- Appropriate verification credentials, such as a registered Digital Signature Certificate where required.
The Income Tax Department’s Form 140 filing procedure specifically requires a valid TAN, updated Return Preparation Utility, valid FVU file, and registered DSC where filing through DSC is applicable.
Form 140 Due Dates
The standard Form 140 quarterly filing schedule is:
| Quarter | Period | Form 140 Due Date |
| Q1 | April–June | July 31 |
| Q2 | July–September | October 31 |
| Q3 | October–December | January 31 |
| Q4 | January–March | May 31 of the following financial year |
These due dates are specified by the Income Tax Department’s Form 140 guidance.
For example, for Tax Year 2026–27:
- April–June 2026 → July 31, 2026
- July–September 2026 → October 31, 2026
- October–December 2026 → January 31, 2027
- January–March 2027 → May 31, 2027
Organizations should distinguish the due date for depositing TDS from the due date for filing the quarterly TDS statement. These are separate compliance activities.
TDS Deposit Due Date vs TDS Return Due Date
One of the most common TDS compliance mistakes is treating tax deposit and quarterly return filing as the same event.
They are not.
Generally, TDS must be deposited within the prescribed timeline after deduction. Under the Income Tax Department’s transition guidance, the general rule continues to require deposit by the seventh day of the following month, with specific rules for March and certain challan-cum-statement transactions.
The quarterly TDS statement is then used to report the deductions made during the quarter.
This means an organization can deposit TDS on time but still miss its quarterly statement deadline. Conversely, filing a quarterly statement does not cure a failure to deposit the underlying tax on time.
Why This Distinction Matters
Finance teams should track at least two separate compliance dates:
- TDS payment/deposit deadline
- Quarterly TDS statement deadline
A robust compliance calendar should also track correction requirements, challan status, deductee data validation, and certificate-related obligations.
How to File Form 140 Online
The Form 140 filing process involves preparing the quarterly statement, generating the required file, uploading it through the income-tax e-filing portal, and completing verification.
Step 1: Prepare TDS Data
Collect and validate the quarter’s TDS information.
This includes deductor details, deductee information, amounts paid or credited, TDS deducted, TDS deposited, challan information, and other data required by the statement.
Data should be reconciled with the accounting records before the filing file is generated.
Step 2: Download the Latest RPU
The Return Preparation Utility, or RPU, is used to prepare the quarterly TDS statement.
The Income Tax Department’s Form 140 procedure directs users to obtain the updated RPU from the relevant authorized source and use it to prepare the return.
Using an outdated utility can create validation or upload problems, particularly when tax forms and validation rules are changing.
Step 3: Validate the Statement
Enter the required information into the RPU and validate the data.
The validation process is important because errors in PAN details, amounts, challans, deductee records, or other fields can cause the generated file to fail validation.
Finance teams should therefore perform an internal reconciliation before creating the final submission file.
Step 4: Generate the FVU File
After successful validation, generate the File Validation Utility (FVU) file.
The FVU file is then prepared for submission through the e-filing process. The Income Tax Department instructs users to convert the prepared file into the required ZIP format for upload.
Step 5: Log In to the E-Filing Portal
Log in to the income-tax e-filing portal using the TAN credentials associated with the deductor.
The Form 140 user manual directs filers through:
e-File → Income Tax Forms → File Income Tax Forms → Deduction and Collection at Source (Form TDS/TCS).
Step 6: Select Form 140
Select Form 140 from the available form options.
The filer must select the appropriate tax year, quarter, and upload type. The upload type will generally distinguish between a regular statement and a correction statement.
Step 7: Upload the FVU ZIP File
Upload the ZIP file containing the required FVU file.
The FVU version used should match the version accepted by the e-filing portal. The Income Tax Department specifically warns filers to ensure that the uploaded FVU corresponds to the current version displayed on the portal.
Step 8: Complete Verification
After uploading, proceed with the required verification.
Once successfully verified, the form is submitted for processing. The filer can subsequently monitor the status through the e-filing portal.
Step 9: Check Processing Status
Do not assume that upload automatically means final acceptance.
The portal can show whether the statement has been accepted or rejected after validation. Where rejected, the filer can review the reason and correct the underlying issue before submitting the appropriate file again.
Common Reasons for Form 140 Rejection
Even when the underlying TDS calculation is correct, a quarterly statement can encounter validation problems.
The Income Tax Department identifies several possible rejection reasons for Form 140, including incorrect tax-year selection, duplicate filing for the same quarter, an FVU-version mismatch, uploading a correction file as a regular statement or vice versa, TAN mismatch, and incorrect reference information in correction filings.
Wrong Tax Year or Quarter
Selecting the wrong tax year or quarter can cause the statement to be rejected or create duplicate-reporting problems.
Finance teams should maintain a filing calendar and verify the reporting period before generating the final FVU file.
TAN Mismatch
The TAN in the prepared FVU file must correspond with the TAN used for filing.
This is particularly important for organizations operating multiple branches, entities, or tax deduction accounts. A centralized checklist can help prevent files from being generated under the wrong TAN.
Incorrect FVU Version
The validation system relies on specific versions of the FVU. Uploading a file generated using an outdated or mismatched version can result in rejection.
Teams should verify the applicable utility and FVU version before every filing rather than reusing files or utilities from previous quarters.
Regular vs Correction Statement Error
A correction statement is not the same as an original quarterly filing.
If a correction is being submitted, the organization should use the appropriate correction workflow and reference information. Mixing regular and correction files can result in rejection.
Form 26Q / Form 140 Correction Filing
Errors can sometimes be identified after a quarterly statement has already been submitted.
A correction statement may be required when information such as deductee details, amounts, challans, or other reported data needs to be corrected.
Organizations should first identify the precise error and determine whether a correction is necessary. They should avoid making unnecessary corrections because every additional submission increases the opportunity for inconsistencies.
For correction filings, maintaining the relevant statement reference information is important. The Income Tax Department notes that certain correction-related mismatches, including incorrect reference information, can cause rejection.
Penalties and Consequences of TDS Return Delays
Late or incorrect TDS compliance can create financial and administrative consequences.
Depending on the nature of the default, organizations may face late-filing fees, interest, penalties, notices, or difficulties in reconciling tax credits. The exact consequence depends on the type of non-compliance and the applicable law.
The practical lesson for finance and HR teams is simple: TDS compliance should be treated as a recurring control process rather than a quarterly filing task.
Late Filing Risk
A delayed quarterly TDS statement can trigger statutory consequences.
Organizations should therefore avoid waiting until the final day. Preparing the statement early provides time to resolve PAN mismatches, challan issues, validation errors, or accounting differences before the statutory deadline.
Interest on TDS Defaults
Interest can arise when tax is deducted late or when deducted tax is deposited late.
Importantly, filing the quarterly statement does not substitute for timely tax payment. Organizations should reconcile deduction dates, deposit dates, and amounts separately.
Data Mismatch Risk
TDS information ultimately affects the tax records of deductees.
Incorrect PANs, amounts, or tax deductions can result in mismatches that affect the recipient’s tax credit. Therefore, accurate reporting is not only a compliance requirement for the deductor but also an important part of the employee, vendor, or professional’s tax experience.
Pro Tip: Reconcile your TDS ledger, bank challans, deductee records, and accounting system before generating the quarterly statement. Most preventable filing issues are easier to fix before the FVU is created.
Form 140 Compliance Checklist for Businesses
Before submitting Form 140, finance and HR teams can use the following checklist:
- Confirm the correct tax year and quarter.
- Confirm whether the transaction falls under the old or new tax framework.
- Verify the deductor’s TAN.
- Reconcile TDS deducted with accounting records.
- Verify deductee PAN and identification details.
- Reconcile TDS deposits with challan records.
- Use the latest applicable RPU.
- Validate the statement before generating FVU.
- Confirm the FVU version.
- Select regular or correction filing correctly.
- Upload the correct ZIP file.
- Complete e-verification.
- Monitor the filing status after submission.
- Retain relevant filing records and acknowledgements.
A checklist may appear simple, but it creates an important control layer for organizations processing hundreds or thousands of TDS transactions every quarter.
How HR and Finance Teams Can Simplify TDS Compliance Using Qandle
TDS compliance depends heavily on accurate employee and organizational data. Qandle can help organizations centralize employee information, payroll-related data, documents, workflows, and reporting so that HR teams spend less time reconciling fragmented records.
For organizations using Qandle for payroll and HR administration, capabilities such as salary structures, allowances, deductions, reimbursements, statutory payroll processes, payslips, and full-and-final settlement can support more structured payroll operations. Centralized employee records and reporting can also make it easier to maintain consistent information across HR processes.
While Form 140 filing itself remains a tax-compliance responsibility, better data management can reduce the operational risk surrounding the filing process. Accurate payroll inputs, organized employee records, and standardized workflows give finance teams a stronger foundation for reconciliation and compliance.
Conclusion
The transition from Form 26Q to Form 140 is one of the important TDS changes organizations need to understand under India’s new tax framework. Form 26Q remains relevant for applicable transactions governed by the Income Tax Act, 1961, while Form 140 is the corresponding quarterly statement for non-salary TDS on resident payments under the new framework.
For businesses, successful compliance requires more than submitting a form before the deadline. Teams need to determine the correct tax framework, deposit TDS on time, maintain accurate deductee data, reconcile challans, generate the correct FVU, complete verification, and monitor the final processing status.
As TDS processes become increasingly digital and compliance requirements evolve, centralized HR and payroll data can make a meaningful difference. Qandle helps organizations bring employee information, payroll processes, documents, and HR workflows together, giving teams greater visibility and control.
Book a personalized demo today with Qandle and explore how a centralized HR platform can help simplify payroll and workforce administration.
Form 26Q / Form 140 FAQs
Form 140 is used to report quarterly TDS deductions on applicable non-salary payments made to residents under the new income-tax framework.
The standard quarterly due dates are July 31 for April–June, October 31 for July–September, January 31 for October–December, and May 31 of the following financial year for January–March.
No. Form 140 is for TDS on applicable non-salary payments made to residents. Form 24Q was the salary TDS statement under the old framework and has a corresponding new form, Form 138, under the new framework.
A deductor generally needs a valid TAN registered on the e-filing portal, the required TDS and deductee information, the latest applicable RPU, a valid FVU file, and the appropriate verification mechanism.
The filer should review the rejection reason shown on the e-filing portal, correct the underlying issue, generate the appropriate file again, and resubmit it. Common issues include incorrect tax-year selection, duplicate filing, FVU mismatch, TAN mismatch, and regular-versus-correction filing errors.
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