In a major step toward strengthening tax compliance and reporting transparency, the tax authorities have introduced Form No. 140 and Form No. 144, prescribing a structured framework for quarterly TDS statements under section 397(3)(b).
While Form 140 applies to payments (other than salary) made to residents, Form 144 governs similar payments made to non-residents. Together, these forms significantly expand the reporting architecture for tax deduction at source (TDS).
Form No. 140: Quarterly TDS Statement for Resident Payments (Other Than Salary)
Applicability
Form 140 must be filed quarterly for payments other than salary made to resident deductees for the quarters ending:
- June
- September
- December
- March
It applies to both Government and Non-Government deductors.
Structure of Form 140
Part A: Deductor Details
This section captures:
- Type of deductor (Government / Non-Government)
- Name, full address, PAN, TAN
- Email and contact details
- Tax year
- Return Receipt Number (if revised)
- AIN (for Government deductors)
- Details of person responsible for TDS
Non-Government deductors must mandatorily quote PAN, while Government deductors may mention "PANNOTREQD".
Part B - Tax Deducted and Deposited
Deductors must report:
- Total tax deducted (including surcharge and Health & Education Cess)
- Interest
- Late fee under section 427
- Penalty/other amounts
- Mode of payment (Challan / Book Adjustment)
- BSR Code and challan details
- Minor head of challan
Challan particulars must match the TIN 2.0/TRACES portal records exactly.
Annexure - Deductee-Wise TDS Reporting
The annexure significantly expands reporting requirements and includes:
- Deductee PAN
- Name
- Section code
- Date of payment and deduction
- Amount paid or credited
- Tax deducted and deposited
- Rate of TDS
- Reasons for non-deduction / lower deduction / higher deduction
- Certificate number under section 395
- Unique identification number of Form 121 (if applicable)
Expanded Coverage Under Form 140
The form covers a wide range of payments including:
- Commission and brokerage
- Rent (machinery and other assets)
- Professional and technical services
- Director remuneration
- Dividends
- Interest (including senior citizen interest)
- E-commerce transactions
- Virtual Digital Asset (VDA) transfers
- Mutual fund and business trust income
- Securitisation trust income
- Lottery, online gaming and betting winnings
- Cash withdrawals beyond specified thresholds
- Payments to transporters
- Contractor payments
Each nature of payment is mapped to a specific section code (1004 to 1067), enabling automated classification and validation.
Form No. 144 - Quarterly TDS Statement for Non-Resident Payments
Form 144 mirrors Form 140 structurally but applies specifically to payments made to non-residents .
This includes payments to:
- Foreign companies
- Non-resident individuals
- Offshore funds
- Foreign Institutional Investors (FIIs)
- Non-resident sportsmen and entertainers
- Business trusts and investment funds
Key Additional Disclosures in Form 144
Form 144 requires significantly enhanced reporting for cross-border transactions, including:
- PAN (or "PANNOTAVBL" where permitted)
- Tax Identification Number (TIN) issued by country of residence
- Full address in country of residence
- Email and contact number
- Status code (company, individual, firm, etc.)
- Nature of remittance
- Country to which remittance is made
- Whether deductee opts out of taxation regime under section 202(1)
- Whether tax rate applied as per Income-tax Act or DTAA
- Grossing up under section 393(10)
- Unique acknowledgment number of corresponding Form 145 (where applicable)
This marks a clear push toward enhanced international tax monitoring and treaty compliance.
Nature of Remittance Classification Under Form 144
Payments to non-residents are categorized under structured remittance codes such as:
- Winnings from lottery, betting, online games
- Sportsmen and entertainer payments
- Interest income
- Dividend income
- Royalty
- Fees for technical services
- Long-term and short-term capital gains
- Commission
- Investment income
- Cash withdrawal
- Other income
The form also captures whether the rate of TDS is applied under domestic law or Double Taxation Avoidance Agreement (DTAA).
Key Compliance Implications
1. Granular Transaction-Level Reporting
Both forms require detailed transaction-wise reporting rather than aggregate disclosures, increasing compliance precision.
2. Integration with TRACES and TIN 2.0
Challan validation must match TRACES portal data exactly, reducing scope for reporting mismatches.
3. Cross-Border Transparency
Form 144 enhances reporting of:
- DTAA benefits
- Grossing-up
- Foreign identification details
- Section-specific exemptions
This aligns with global tax transparency standards.
4. Wider Coverage of Emerging Transactions
The inclusion of:
- Virtual Digital Assets
- E-commerce operators
- Online gaming winnings
- High-value cash withdrawals
reflects adaptation to evolving digital and financial ecosystems.
5. Increased Accountability on Deductors
Deductors must carefully classify:
- Reason codes for non-deduction
- Threshold exemptions
- Notifications under section 400(1)
- Certificates under section 395
- Higher rate deductions under section 397(2)
Incorrect classification may trigger automated scrutiny.
Conclusion
Form 140 and Form 144 represent a comprehensive restructuring of quarterly TDS reporting for resident and non-resident payments respectively. The new forms introduce:
- Detailed section code mapping
- Expanded deductee disclosures
- International tax transparency measures
- Enhanced reconciliation framework
With increasing automation and data integration, deductors must strengthen internal compliance systems, payroll and accounts workflows, and documentation processes to ensure accurate and timely filing.
These reforms signal a clear move toward deeper reporting precision and real-time tax monitoring in India’s evolving compliance ecosystem.
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