TDS Quarterly Return on Non-Salary 2026: Know How To File With New Form 140

Introduction

The Income Tax Department has introduced a significant change in TDS compliance under the Income-tax Act, 2025. With effect from 1 April 2026, Form 140 has replaced the erstwhile Form 26Q for reporting Tax Deducted at Source (TDS) on non-salary payments made to resident taxpayers. Prescribed under Section 397(3)(b) of the Income-tax Act, 2025, Form 140 serves as the quarterly TDS return for domestic non-salary transactions.

While the fundamental objective of reporting TDS on non-salary payments remains unchanged, the new form introduces a more structured and technology-driven compliance framework. It incorporates standardised reporting formats, enhanced validation checks, automated reconciliation, and improved digital integration with the Income Tax Department's processing systems. These changes are aimed at improving data accuracy, reducing reporting errors, facilitating faster processing, and ensuring seamless compliance under the new tax regime.

Every deductor responsible for deducting tax on payments such as interest, contractor payments, commission or brokerage, rent, professional and technical fees, dividends, and other specified non-salary payments must comply with the revised reporting requirements. Understanding the applicability, due dates, filing procedure, and compliance implications of Form 140 is therefore essential for businesses, tax professionals, and other deductors.

Quick Snapshot of Form 140

Major Changes

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What is Form 140?

Form No. 140 is the quarterly Tax Deducted at Source (TDS) return prescribed for reporting tax deducted on non-salary payments made to resident taxpayers. Effective from FY 2026-27, it replaces the erstwhile Form 26Q and serves as the primary compliance statement for reporting domestic non-salary TDS transactions under the Income-tax Act, 2025.

The return contains details relating to the deductor, challan payments, deductee-wise transactions, and taxes deposited with the Central Government. While the overall objective of reporting TDS remains unchanged, Form 140 introduces a more streamlined, technology-driven reporting framework with enhanced validations, standardised reporting fields, and improved digital integration.

Transactions Covered Under Form 140

Form 140 is required to be filed for reporting TDS deducted on various non-salary payments made to resident taxpayers, including:

• Interest other than interest on securities.
• Payments to contractors and subcontractors.
• Commission and brokerage.
• Rent for land, building, plant, machinery, or equipment.
• Professional fees and technical service fees.
• Dividend payments.
• Any other resident payments subject to TDS under the Income-tax Act, 2025.

All such transactions must be reported on a quarterly basis along with the relevant challan and deductee details.

Who is Required to File Form 140?

Form 140 must be filed by every deductor who deducts tax at source on non-salary payments to resident taxpayers. This includes:

• Companies.
• Partnership firms and Limited Liability Partnerships (LLPs).
• Government departments and public sector undertakings.
• Banks and financial institutions.
• Trusts, societies, and cooperative societies.
• Individuals and Hindu Undivided Families (HUFs) are liable to deduct TDS under the applicable provisions of the Income-tax Act, 2025.

Accordingly, any person responsible for deducting TDS on resident non-salary payments during a quarter is required to file Form 140 within the prescribed due dates.

Due Dates for Filing Form 140

Timely filing of Form 140 is essential to ensure compliance with TDS provisions, facilitate the issuance of TDS certificates, and avoid late filing fees and penalties. The quarterly due dates for filing Form 140 for FY 2026-27 are as follows:

Subject to the applicable provisions and procedural requirements prescribed under the Income-tax Act, 2025 and related rules.

The filing timelines remain broadly aligned with those applicable under the erstwhile Form 26Q framework, ensuring continuity in quarterly TDS compliance.

Also Read: TDS Return Due Date For FY 2026-27: Updated As Per IT Act 2025

Form 140 vs Form 26Q

Although Form 140 replaces Form 26Q, the fundamental objective of reporting TDS on non-salary payments remains unchanged. The key differences are summarised below:

The introduction of Form 140 reflects the government's broader objective of modernising tax administration through technology-driven compliance and standardised reporting processes.

Also Read: Form 141 Replaces 26QB, 26QC, 26QD, 26QE

Consequences of Late Filing

Failure to file Form 140 within the prescribed due dates may result in financial and compliance consequences, including:

• Late filing fee of ₹200 per day of delay, subject to the amount of TDS deductible or deducted.
• Penalty ranging from ₹10,000 to ₹1,00,000 in specified cases of non-filing, delayed filing, or furnishing incorrect information.
• Additional interest implications where there is a delay in deduction or deposit of TDS, as prescribed under the applicable provisions of the Income-tax Act, 2025.

Deductors should therefore ensure timely filing, accurate reporting, and regular reconciliation of challan and deductee information to avoid notices, penalties, and processing delays.

Step-by-Step Filing Workflow for Form 140

Step 1: Prepare and Verify TDS Data

Before preparing Form 140, deductors should:

• Ensure that their accounting or ERP systems are updated to support the latest File Validation Utility (FVU) requirements.
• Compile all non-salary payments subject to TDS for the relevant quarter.
• Verify the PAN details of all deductees and reconcile TDS deductions with challan payments.
• Confirm that TDS has been deducted and deposited at the correct rates and within the prescribed timelines.

Note: Invalid or inoperative PAN details may result in the application of higher TDS rates and reporting mismatches.

Step 2: Prepare Form 140

Form 140 requires the following information:

Deductor Details

• TAN and PAN of the deductor.
• Name, address, and category of the deductor.
• Details of the responsible person filing the return.

Challan Details

• Challan Identification Number (CIN).
• BSR Code of the collecting bank.
• Date of deposit and challan serial number.
• Amount of TDS deposited.

Deductee-wise Details

• PAN of the deductee.
• Nature of payment.
• Amount paid or credited.
• TDS rate applied.
• Tax deducted and deposited.
• Corresponding challan reference.

Step 3: Validate and Submit the Return

• Generate the Form 140 return file in the prescribed format.
• Validate the file using the latest File Validation Utility (FVU).
• Rectify any validation errors identified by the utility.
• Upload the validated return through the Income Tax e-Filing Portal using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC), as applicable.
• Upon successful submission, retain the Acknowledgement Number for future reference and tracking of return-processing status.

Following these steps helps ensure accurate reporting, timely compliance, and smooth processing of Form 140 by the tax authorities.

Time Limit for Filing Correction Statements

A significant change under the new TDS reporting framework is the introduction of a defined time limit for filing correction statements. Under Form 140, a correction statement can be filed only within two years from the end of the tax year in which the original quarterly statement was due.

For example, if a Quarter 2 return for FY 2026-27 is due on 31 October 2026, any correction relating to that return must be filed within the prescribed two-year period calculated from the end of the relevant tax year.

Once this statutory time limit expires, no further modifications to the return may be permitted. Therefore, deductors should regularly reconcile TDS records, challan details, and deductee information to identify and rectify errors well before the correction window closes.

Penalties for Non-Compliance

Failure to comply with Form 140 filing requirements may result in the following consequences:

1. Late Filing Fee: ₹200 per day of delay, subject to the amount of TDS deductible or deducted.
2. Penalty for Non-Filing or Incorrect Filing: A penalty ranging from ₹10,000 to ₹1,00,000 may be levied in specified cases.
3. Interest on TDS Defaults:

• 1% per month for failure to deduct TDS.
• 1.5% per month for failure to deposit TDS after deduction.

Practical Compliance Tips

To minimise the risk of notices and penalties:

• Reconcile TDS records with challan details and the Annual Information Statement (AIS) regularly.
• Verify deductee PAN details before filing.
• Review quarterly returns for errors before submission.
• Keep accounting and compliance software updated with the latest filing utilities and validation requirements.

Conclusion

Form 140 is the prescribed quarterly TDS return for reporting non-salary payments to resident taxpayers under the Income-tax Act, 2025. Replacing the erstwhile Form 26Q from FY 2026-27, it introduces a more streamlined and technology-driven reporting framework while retaining the core objective of ensuring accurate TDS compliance. Deductors should focus on timely filing, accurate reporting, and regular reconciliation of challan and deductee details to avoid penalties and ensure seamless compliance with the applicable tax provisions.

FAQs

1. Who is required to file Form 140?

Any person or entity responsible for deducting TDS on non-salary payments to resident taxpayers, including companies, firms, LLPs, government departments, banks, trusts, and specified individuals or HUFs, must file Form 140.

2. What types of payments are reported in Form 140?

Form 140 covers various non-salary payments such as interest, contractor payments, commission or brokerage, rent, professional fees, technical service fees, dividends, and other payments subject to TDS.

3. How is Form 140 different from Form 26Q?

Form 140 replaces Form 26Q under the Income-tax Act, 2025. While both forms serve the same purpose of reporting non-salary TDS transactions, Form 140 incorporates enhanced validation checks, standardised reporting fields, and improved digital integration.

4. What information is required to file Form 140?

The return requires deductor details, challan information, deductee-wise transaction details, TDS amounts deducted and deposited, and corresponding PAN and TAN information.

5. How can Form 140 be filed?

The return must be prepared in the prescribed format, validated using the applicable File Validation Utility (FVU), and submitted electronically through the Income Tax e-Filing Portal using DSC or EVC authentication.

6. Why is timely filing of Form 140 important?

Timely filing ensures compliance with statutory requirements, facilitates the issuance of TDS certificates, avoids penalties and notices, and enables accurate credit of TDS to deductees.