Form 138 under Income Tax: Applicability, Due Dates and Filing Process TY 2026–27

Overview

The Income-tax Act, 2025, has introduced a revised framework for several tax compliance forms. As part of this transition, Form 138 has replaced the erstwhile Form 24Q for reporting Tax Deducted at Source (TDS) on salary payments.

Although the form number has changed, its purpose remains the same. Form 138 is used to furnish quarterly details of TDS deducted from employees' salaries. It also covers TDS deducted by specified banks on payments made to eligible senior citizens under the applicable provisions of the Act. Filing the form accurately and within the prescribed timelines helps ensure proper TDS credit to deductees while enabling employers to meet their statutory compliance obligations.

What is Form 138?

Form 138 is a quarterly TDS statement prescribed under the Income-tax Act, 2025, for reporting tax deducted from salary income under Section 392. It also includes reporting requirements for TDS deducted by specified banks on payments made to eligible senior citizens under Section 393(1).

From Tax Year 2026–27, Form 138 replaces the earlier Form 24Q. The change is primarily administrative and does not alter the underlying reporting requirements.

Purpose of Form 138

The main objectives of filing Form 138 are to:

• Report TDS deducted from employees' salaries during each quarter.
• Report tax deducted by specified banks on eligible senior citizen payments.
• Ensure accurate reflection of TDS credits in taxpayers' records.
• Reconcile the tax deducted with the tax deposited to the Government.
• Promote transparent and standardised TDS reporting under the new tax framework.

Who is Required to File Form 138?

The following deductors are required to file Form 138:

• Employers deducting TDS from salary under Section 392.
• Central and State Government departments are responsible for salary payments.
• Companies, LLPs, partnership firms, trusts, societies, and other employers are liable to deduct tax from salaries.
• Specified banks deducting TDS on payments to eligible senior citizens under Section 393(1).

Applicability of Form 138

Form 138 is applicable when:

• TDS has been deducted from salary payments.
• Tax deducted during the quarter has been deposited with the Government.
• A specified bank deducts tax from payments made to eligible senior citizens.

A quarterly statement must be filed whenever tax has been deducted during the relevant quarter, irrespective of the number of employees covered.

Information Required for Filing Form 138

Before preparing the return, the deductor should keep the following details ready:

• TAN and PAN of the deductor.
• Name and address of the employer or bank.
• Relevant financial year and quarter.
• Challan details relating to the tax deposited.
• PAN of each deductee.
• Salary paid during the quarter.
• Amount of tax deducted and deposited.
• Dates of deduction and payment.
• Details of any applicable interest or late filing fee.

Ensuring the accuracy of these details helps avoid validation errors and delays in processing.

Due Dates for Filing Form 138 (TY 2026–27)

It is advisable to complete the filing well before the due date to allow sufficient time for resolving any validation or technical issues.

Also Read: TDS Return Due Date For FY 2026-27

Step-by-Step Filing Process

The filing process generally involves the following steps:

Step 1: Compile salary and TDS details for the relevant quarter.

Step 2: Verify employee PANs, challan particulars, and tax deduction details.

Step 3: Prepare Form 138 using the utility prescribed by the Income-tax Department.

Step 4: Validate the statement through the prescribed file validation utility.

Step 5: Upload the validated statement on the authorised e-filing portal.

Step 6: Download and retain the acknowledgement generated after successful submission for future reference.

Annexures in Form 138

Form 138 contains different annexures depending on the reporting requirements.

• Annexure I contains deductee-wise TDS details and is filed every quarter.
• Annexure II is submitted with the fourth-quarter return and contains annual salary details, exemptions, and tax computations.
• Annexure III is applicable where specified banks report TDS deducted on eligible senior citizen payments.

Consequences of Late or Incorrect Filing

Failure to file Form 138 correctly or within the prescribed time may result in:

• Levy of late filing fees.
• Interest for delayed deduction or deposit of TDS.
• Penalties for non-compliance or incorrect reporting.
• Delay in granting TDS credit to employees.
• Notices or further scrutiny from the Income-tax Department.

Timely filing and accurate reporting help avoid unnecessary compliance issues.

Best Practices for Deductors

To ensure smooth compliance:

• Verify employee PAN details before filing.
• Match challan information with tax payment records.
• Reconcile payroll data every quarter.
• Complete filing before the due date instead of waiting until the last day.
• Retain acknowledgements and supporting documents for future verification.
• Review the return thoroughly before submission.

Form 24Q vs. Form 138

The transition mainly reflects a change in form numbering under the new legislation, while the reporting purpose remains substantially unchanged.

Conclusion

Form 138 is the prescribed quarterly statement for reporting salary-related TDS under the Income-tax Act, 2025. Although it replaces Form 24Q, employers and specified banks are expected to follow a similar reporting process while complying with the revised legal framework. Accurate information, timely filing, and proper reconciliation of payroll and challan data are essential for ensuring smooth compliance and timely credit of TDS to deductees.

Frequently Asked Questions (FAQs)

1. Which form has been replaced by Form 138?

Form 138 replaces the earlier Form 24Q from Tax Year 2026–27 onwards.

2. Who is required to file Form 138?

Employers deducting TDS from salaries and specified banks covered under the relevant provisions are required to file Form 138.

3. How frequently should Form 138 be filed?

The return must be filed every quarter for the relevant financial year.

4. Has the filing procedure changed completely?

No. While the form has been renumbered under the Income-tax Act, 2025, the overall filing process remains largely similar.

5. What happens if Form 138 is filed after the due date?

Delayed filing may attract late fees, interest, penalties, and delays in the reflection of TDS credits.

6. Is Form 138 mandatory even for small employers?

Yes. Any employer who has deducted TDS from salary during a quarter is required to file Form 138.