Form 140 Income Tax 2025: Purpose, Applicability & Form 26Q Substitution

Every quarter, a person deducting TDS files a return to report all TDS transactions, TDS rates, and TDS amounts to the Income Tax Department. Under the old Income Tax Act, 1961, this quarterly non-salary TDS return was called Form 26Q. From April 1, 2026, it no longer exists, since it has been replaced by Form 140 - a revamped, more structured quarterly TDS statement for all non-salary payments made to Indian residents. 

What is Form 140?

Form 140 is a quarterly statement filed by deductors to report Tax Deducted at Source (TDS) on payments made to Indian residents, other than salary. It is governed by Section 397(3)(b) of the Income Tax Act, 2025 and Rule 219 of the Income Tax Rules, 2026.

In practical terms, any time a business pays professional fees, rent, commission, interest, brokerage, contractor charges, or any other non-salary amount to a resident Indian and deducts TDS on it, that deduction must be reported quarterly via Form 140. The form captures deductor details, challan information, and a breakdown of TDS deducted and deposited at the deductee level.

Why Was Form 140 Introduced?

What Was Form 26Q?

Form 26Q was the quarterly TDS return under Section 200(3) of the Income Tax Act, 1961 and Rule 31A of the Income Tax Rules, 1962. It was filed by deductors to report TDS on all non-salary payments made to residents, including interest, rent, professional fees, commissions, contractor payments, dividends, and more. It had two annexures: Annexure I for Q1-Q3, and Annexure II for Q4.

What Changed with Form 140?

The rollout of the Income Tax Act, 2025, and the Income Tax Rules, 2026, from April 1, 2026, replaced all forms with modernised versions. Form 26Q became Form 140.

Who Should File Form 140?

Form 140 must be filed by every deductor - the person or entity responsible for deducting TDS on non-salary payments made to resident Indians. This includes:

• Companies (private limited, public limited, listed, unlisted)
• Partnership firms and LLPs
• Individual and HUF deductors (if liable to deduct TDS under the applicable provisions)
• Government departments (central and state government departments, ministries, PSUs)
• Banks and financial institutions deduct TDS on interest, dividends, or other payments.
• Trusts and cooperative societies
• Any other person liable to deduct TDS under Sections 393(1) and 393(3) of the Income Tax Act, 2025

In short: if you paid any non-salary amount to a resident Indian and deducted TDS on it during the quarter, you are required to file Form 140 for that quarter - regardless of the amount or the size of your organisation.

Note:  For non-salary payments to non-residents or foreign companies, Form 144 (which replaces Form 27Q) must be filed - NOT Form 140. Form 140 is for resident deductees only.

What Payments are Covered Under Form 140?

Form 140 covers a wide range of non-salary payments made to resident Indians under Sections 393(1) and 393(3) of the Income Tax Act, 2025. Each payment category is mapped to a specific section code (1004-1067) in the form. Key payment types covered include:

Structure of Form 140 – Part A, Part B, and Annexure

Form 140 has three components: Part A, Part B, and a single unified Annexure. Here is what each section requires:

Part A – Deductor Details

Part A captures the identity and registration details of the deductor:

• Type of Deductor: Government or Non-Government (with AIN for government deductors)
• Full name and complete address of the deductor
• PAN (Permanent Account Number) of the deductor
• TAN (Tax Deduction and Collection Account Number) - mandatory for all deductors
• Contact information: email address and phone number
• Tax Year for which the return is being filed
• Quarter for which the return is being filed (Q1, Q2, Q3, or Q4)
• Return Receipt Number - if the return is a revised filing

Part B – Tax Deducted and Deposited

Part B reports the total TDS deposited with the Central Government:

• Mode of payment: Challan or Book Adjustment (for government deductors)
• BSR Code of the bank branch where TDS was deposited
• Challan Serial Number and date of deposit
• Minor head of the challan (TDS code)
• Total tax deposited, interest paid, and late fee under Section 427
• Any other amounts (penalties, etc.)

Important: The challan particulars in Part B must match exactly with the records on the TIN 2.0/TRACES portal. Any mismatch will cause the return to fail validation.

Annexure – Deductee-Wise TDS Breakdown

The Annexure is the most detailed section; it provides a row-by-row breakdown for each deductee (the person from whom TDS was deducted). Form 140 has a single annexure used across all four quarters, unlike the old Form 26Q, which had separate annexures for each quarter. Each row in the Annexure captures:

• PAN of the deductee (mandatory for correct tax credit)
• Full name of the deductee
• Section Code (1004 to 1067) - the specific payment category under the new Act
• Amount paid or credited to the deductee
• Date of payment or credit
• Date of TDS deduction
• TDS rate applied
• Tax deducted and tax deposited
• Reason for non-deduction / lower deduction / higher deduction - if applicable
• Certificate Number under Section 395 - if a lower/nil TDS certificate was obtained
• UIN of Form 121 - if the deductee submitted a Form 121 (NIL TDS declaration) for that income

Quarterly Due Dates for Filing Form 140

Form 140 must be filed quarterly. The due dates are the same as the old Form 26Q:

How to File Form 140 Online – Step-by-Step

Form 140 can be filed in Online Mode through the Income Tax e-filing portal, or in Offline Mode using the downloadable utility from the portal. Here is the complete online filing process:

1. Log in to the Income Tax e-filing portal (www.incometax.gov.in) using your TAN and password
2. From the Dashboard, go to: e-File > Income Tax Forms > File Income Tax Forms
3. Select the tab "Forms as per Income Tax Act 2025"
4. Search for or select "Form 140"
5. Choose the applicable Tax Year and Quarter (Q1, Q2, Q3, or Q4)
6. Select "Online" mode and click Continue
7. Fill in Part A - enter deductor details: TAN, PAN, name, address, type of deductor, and contact information.
8. Fill in Part B - enter challan details: BSR Code, serial number, date of deposit, total TDS deposited, interest, and any late fee paid.
9. Fill in the Annexure - for each deductee, enter PAN, name, section code, amount paid, dates, TDS rate, amount deducted and deposited, and any applicable certificates or UINs
10. Review the completed return thoroughly - verify all PAN entries, amounts, and challan details.
11. Click "Proceed to e-Verify" and verify using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code)
12. Submit the return and download the acknowledgement receipt for your records.

For Offline Mode

13. Download the Offline Utility for Form 140 from the Income Tax e-filing portal's Downloads section
14. Prepare all three sections (Part A, Part B, Annexure) in the utility
15. Generate the XML / JSON file
16. Log in to the portal and upload the generated file under the File Income Tax Forms section
17. e-Verify using DSC or EVC after upload

Form 140 vs Form 26Q – What Changed?

Form 140 vs Form 138 – Key Differences

Form 138 and Form 140 are both new quarterly TDS return forms under the Income Tax Act, 2025. They look similar but serve very different purposes. Here is how they differ:

Penalties for Late or Incorrect Filing of Form 140

Missing the Form 140 deadline - or filing with incorrect information - has direct financial consequences. Here is the full penalty framework:

Late Filing Fee (Section 427 of IT Act, 2025 | Earlier Section 234E)

• ₹200 per day for every day of delay in filing Form 140 after the due date
• The late fee is calculated from the day after the due date until the date of actual filing
• The total late fee cannot exceed the total TDS amount reported in the return
• The late fee must be paid before the return can be filed.

Penalty for Non-Filing or Incorrect Information 

• If Form 140 is not filed within one year of the due date, the Assessing Officer may levy a penalty.
• Minimum penalty: ₹10,000
• Maximum penalty: ₹1,00,000
• This penalty applies in addition to the late filing fee - both can be levied at the same time.
• Providing incorrect information (wrong PAN, wrong amount, wrong section code) also attracts this penalty.
• The provisions are covered under Section 461 of the IT Act, 2025 (Earlier Section 271H).