Overview
With effect from 01.04.2026, Form No. 141, Schedule C is the prescribed challan-cum-statement for reporting tax deducted at source on specified payments made by an eligible individual or Hindu Undivided Family (HUF) to a resident contractor or professional under section 393(1) [Table Sl. No. 6(ii)] of the Income-tax Act, 2025. The CBDT guidance note treats Form No. 141 as the common unified reporting form for the specified transaction classes covered by it, and Schedule C is the designated schedule for this category of payment.
This article endeavours to cover all material aspects relating to Form No. 141 relevant to the present discussion. Since Form No. 141 also has other applications, those may be examined separately in another article, which may be accessed by clicking on the name appearing at the end. Should you have any queries after reading this article, you may contact us at the details mentioned at the end of the article.
Applicable statutory provision
The governing withholding provision for this category is section 393(1) [Table Sl. No. 6(ii)] of the Income-tax Act, 2025. The related procedural framework is contained in the notified Income-tax Rules, 2026, and the official CBDT guidance note on Form No. 141.
Persons covered
Schedule C applies where the payer is:
- an individual; or
- an HUF,
and such person is not otherwise required to deduct tax under other TDS provisions of the Act.
Nature of payments covered
Schedule C covers payment to a resident for any of the following specified categories:
- contract work ;
- supply of labour under a contract;
- commission , other than insurance commission;
- brokerage ; or
- fees for professional services.
Accordingly, where an eligible individual or HUF makes payment to a resident for contract execution, labour supply, brokerage, commission or professional services, the payment falls within the Schedule C reporting stream, subject to the threshold condition.
Threshold condition
The obligation under this category applies where the aggregate amount paid or credited during the financial year exceeds Rs 50 lakh . This aggregate threshold is specifically stated in the official guidance note for the Schedule C category.
Why TDS on professional or contract payments has to be deducted
TDS has to be deducted because section 393(1) [Table Sl. No. 6(ii)] itself imposes a statutory withholding obligation on the specified payer when covered payments are made to a resident and the prescribed threshold is crossed. Therefore, once the payment:
- falls within the covered category, and
- the aggregate yearly amount exceeds ₹50 lakh,
The deductor is legally required to deduct tax at source.
This applies equally to professional fees, contract payments, labour supply payments, commission, and brokerage, because all of these are expressly included within the payment class assigned to Schedule C.
Why Form No. 141 must be filed
Deduction alone does not complete compliance. The statute and rules require the deductor to report and deposit the TDS through the prescribed challan-cum-statement, and for this category the prescribed statement is Form No. 141, Schedule C. Accordingly, Form No. 141 must be filed because it is the statutory mode through which the deductor:
- reports the transaction,
- reports the deductee-wise tax deduction,
- deposits the tax,
- reports interest and fee, where applicable, and
- completes the prescribed TDS compliance process for this category.
Nature of Form No. 141
Form No. 141 is a challan-cum-statement and is to be furnished electronically. It is a PAN-based filing, and the official material states that Form No. 141 is filed using the deductor’s PAN. For this category, the compliance is therefore PAN-linked rather than TAN-based.
The official FAQ further clarifies that only one schedule can be selected and filled in one Form No. 141. Therefore, where the payment falls under the contractor/professional category, the deductor must file Schedule C only in that statement.
Due date for filing
Form No. 141 for Schedule C is to be filed within 30 days from the end of the month in which deduction is made. This filing timeline is specifically stated in the CBDT guidance note for this category of deduction.
Structure of Form No. 141
The official guidance note describes Form No. 141 as containing the following parts:
- Part A – particulars of the deductor, including name, address, PAN, contact details and nature of transaction;
- Part B – schedule-specific transaction details;
- Part C – summary of transaction and details of tax, interest and fee; and
- declaration.
Thus, Form No. 141 is not merely a payment instrument; it is a structured statutory statement combining deductor details, transaction particulars, tax computation and declaration.
Deductee grouping in Schedule C
A significant feature of the Schedule C framework is that, for a particular month and for a specific nature of payment, where there are multiple deductees having the same status, the deductor is required to file one Form No. 141 covering all such deductees collectively.
However, this grouping is subject to a status condition. If deductees have different statuses, separate forms are required. Accordingly:
- one filing may cover multiple deductees only where they are of the same status;
- the grouping must relate to the same month; and
- the grouping must relate to the same nature of payment.
Where both company and non-company deductees exist, separate filings are required for each status group.
Particulars required in Schedule C
The notified design of Schedule C requires structured deductee-wise reporting. The relevant particulars include:
- PAN of deductee;
- name of deductee;
- nature of payment;
- date of contract/agreement;
- aggregate of payments or credits from 1 April to the end of the month in which payment is made or credited ;
- amount paid or credited;
- date of payment or credit;
- amount on which tax is liable to be deducted;
- certificate number under section 395(1), where applicable;
- rate at which tax is deducted;
- amount of tax deducted at source; and
- date of deduction.
These particulars show that Schedule C requires reporting not only of the payment and tax amount, but also of the contractual reference, cumulative payment position, taxable base and deductee-level deduction details.
Common-form compliance features
The CBDT guidance note also attributes broader system features to the new form framework, including:
- prefilled details;
- smart validations;
- easy correction mechanism;
- check-box based smart verification; and
- standardised name and address fields.
These features are relevant from a practical compliance perspective because they are intended to standardise filing, reduce input errors and facilitate subsequent correction where needed.
TDS certificate to be issued
For deductions reported through Schedule C of Form No. 141, the corresponding TDS certificate is Form No. 132. The official FAQ on Form No. 132 states that this certificate has been prescribed for the specified Form No. 141 reporting streams and is to be issued after tax has been deducted and deposited.
Purpose of Form No. 132
Form No. 132 serves as the formal certificate evidencing that:
- tax has been deducted at source;
- tax has been deposited to the credit of the Central Government; and
- the deductee may rely on the certificate for claiming TDS credit while filing the return of income.
Time limit for issuing Form No. 132
The certificate in Form No. 132 must be issued within 15 days from the due date for furnishing Form No. 141. If an error is noticed in the certificate, the correction is first to be made through the relevant correction process for Form No. 141, after which the corrected certificate can be generated.
Compliance position in direct terms
For payments covered by this category from 01.04.2026, the compliance position is:
- governing provision: section 393(1) [Table Sl. No. 6(ii)];
- prescribed statement: Form No. 141, Schedule C;
- certificate to be issued: Form No. 132.
Conclusion
In the regime effective from 01.04.2026, where an eligible individual or HUF, not otherwise liable to deduct TDS under other provisions, makes payment to a resident contractor or professional for covered categories such as contract work, labour supply, commission, brokerage or professional services, and the aggregate annual payment exceeds ₹50 lakh, tax is required to be deducted under section 393(1) [Table Sl. No. 6(ii)]. That deduction must be reported and deposited through Form No. 141, Schedule C, filed electronically within 30 days from the end of the month of deduction, and the corresponding Form No. 132 must thereafter be issued within the prescribed period
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