Expert Opinion Required – Form 140 Gross Amount Reporting When Aggregate TDS Threshold Is Crossed

Expert Opinion Required – Form 140 Gross Amount Reporting When Aggregate TDS Threshold Is Crossed

I request the views of tax professionals and TDS experts on the following issue under the Income-tax Act, 2025, regarding reporting in Form 140.

A manufacturing company engages ABC Manpower Services Pvt. Ltd. (name used only for illustration) for manpower supply. The agency raises a monthly bill of ₹20,000.

The transactions during the Tax Year are:

Each individual bill is below the ₹30,000 single-payment threshold.

The aggregate amount reaches ₹1,00,000 in August and exceeds the aggregate threshold in September, when the cumulative amount becomes ₹1,20,000.

The contractor is a corporate entity and the applicable TDS rate is 2%. Therefore, TDS on the cumulative amount of ₹1,20,000 is ₹2,400.

The Question

When filing the Q2 Form 140 TDS return, what should be reported as the Gross Amount for the same deductee, ABC Manpower Services Pvt. Ltd.?

There are two possible interpretations:

Option A – Cumulative Gross Amount

Gross Amount: ₹1,20,000
TDS @ 2%: ₹2,400

Under this approach, since the aggregate threshold is crossed during Q2, the cumulative amount paid/credited from April to September is reported in the Q2 TDS return.

Option B – Q2 Gross Amount

Gross Amount: ₹60,000
TDS: ₹2,400

Under this approach, only the actual amount paid/credited during Q2 is reported as Gross Amount:

·         July: ₹20,000

·         August: ₹20,000

·         September: ₹20,000

·         Total Q2 Gross Amount: ₹60,000

The TDS reported, however, is ₹2,400, representing 2% of the cumulative amount of ₹1,20,000 after the aggregate threshold is crossed.

Reconciliation with the Profit & Loss Account

The company's Profit & Loss Account records the total manpower-service expenditure of ₹1,20,000 for April to September.

Therefore, the issue is specifically whether the Q2 TDS return should also report the cumulative Gross Amount of ₹1,20,000, or whether it should report only the Q2 Gross Amount of ₹60,000, while reporting TDS of ₹2,400.

Expert Opinion Requested

1.      Which is the correct Gross Amount to be reported in Q2 Form 140 — ₹1,20,000 (Option A) or ₹60,000 (Option B)?

2.      When the aggregate threshold of ₹1,00,000 is crossed during Q2, does the TDS return require cumulative reporting from April, or only reporting of the payments/credits made during Q2?

3.      If Option B (₹60,000 Gross Amount and ₹2,400 TDS) is correct, what is the statutory basis for reporting TDS of ₹2,400 against a Gross Amount of ₹60,000 when the applicable rate is 2%?

4.      If Option A (₹1,20,000 Gross Amount and ₹2,400 TDS) is correct, what specific provision of the Income-tax Act, 2025, Income-tax Rules, 2026, or Form 140/RPU/FVU instructions supports cumulative reporting?

5.      Which of the two methods is the correct method for reconciling the TDS return with the ₹1,20,000 expenditure recorded in the Profit & Loss Account?

I request experts to kindly give their views based on the statutory provisions and official Form 140/RPU/FVU instructions, with the relevant section, rule or form-field reference wherever possible.

The purpose of the query is only to determine the correct TDS-return reporting methodology when the aggregate threshold is crossed during the quarter.