By CA Surekha S Ahuja
The TDS statement for July to September 2026 is due on 31 October 2026. For Tax Year 2026-27, salary TDS is reported in Form No. 138 and non-salary TDS on payments to residents in Form No. 140.
But the bigger change is procedural.
From Q2 onwards, these statements can be prepared, validated and filed directly inside the deductor's TRACES login.
For the online route, there is no need to first prepare a separate return file, validate it through a separate utility and then upload it.
The new workflow is:
TRACES login → select form → import challans → enter/upload deductees → map challans → validate → e-verify → file
This is particularly useful for short returns and also provides better pre-filing controls for larger statements.
What has changed?
The Income-tax Act, 2025 came into effect from 1 April 2026, with new TDS/TCS statement numbers.
| New form | Earlier form | Broad purpose |
|---|---|---|
| Form 138 | 24Q | TDS on salary and specified senior-citizen cases |
| Form 140 | 26Q | TDS on payments other than salary to residents |
| Form 143 | 27EQ | Tax collected at source |
| Form 144 | 27Q | TDS on specified payments to non-residents |
The quarterly due dates remain:
| Quarter | Period | Due date |
|---|---|---|
| Q1 | April–June 2026 | 31 July 2026 |
| Q2 | July–September 2026 | 31 October 2026 |
| Q3 | October–December 2026 | 31 January 2027 |
| Q4 | January–March 2027 | 31 May 2027 |
Statements relating to FY 2025-26 and earlier years continue under the old forms through the old compliance framework. The new online facility should therefore be understood as part of the new Tax Year 2026-27 regime.
What is genuinely easier?
| Stage | Earlier route | New online TRACES route |
|---|---|---|
| Preparation | Separate return utility | Direct online entry |
| Challans | Manual entry | Import available unconsumed challans/BINs |
| Deductees | Utility entry | Online entry or CSV bulk upload |
| Mapping | Checked through return processing | Difference visible before filing |
| Validation | Separate validation step | Validate Statement on portal |
| Verification | Separate filing cycle | Aadhaar OTP or DSC in the same workflow |
| Draft | Outside portal | Save and resume |
| Review | Mainly outside system | Admin/Sub-User workflow |
Why short returns gain most
Consider a company with a few professional-fee, contractor, rent and commission payments.
Earlier, even a ten-record statement required preparation of a complete return file.
Now the deductor can:
import challans → enter the deductees → map → validate → e-verify.
For larger statements, the same workflow can be combined with bulk upload.
Challan import: a real practical improvement
Available unconsumed challans/BINs can be imported, avoiding repeated entry of BSR code, challan serial number, date and amount.
Where permitted, a challan can also be added manually.
But:
Imported does not mean reconciled.
The deductor must still verify that the challan relates to the correct period and liability.
For government deductors, BIN-related provisions apply separately.
Deductee entry and bulk upload
A small return can be entered record by record.
For multiple deductees, the prescribed CSV bulk-upload facility is more efficient.
The data includes, as applicable:
PAN and name
section code
date of payment or credit
amount paid or credited
TDS deducted
date of deduction
relevant certificate and other form-specific particulars
The convenience is procedural; responsibility for correct data remains with the deductor.
Challan mapping is an important new control
After deductee entry, records are mapped against the relevant challans. The portal shows:
Challan amount → mapped amount → difference
This allows a mismatch to be identified before filing.
The practical reconciliation should be:
TDS in books = TDS deducted = TDS reported = TDS deposited = TDS mapped
If these do not agree, stop and reconcile.
What has NOT become easier?
The interface is easier. The substantive TDS responsibility is not.
The deductor remains responsible for the correct:
section and rate
threshold, wherever applicable
PAN treatment
date of payment or credit
amount on which tax is deductible
timing of deduction and deposit
challan and deductee reporting
E-verification must be planned
Do not wait until the due date to discover that Aadhaar linkage or DSC registration is incomplete.
The authorised person should have the required Aadhaar-linked mobile or registered DSC arrangements ready in advance.
A filed statement cannot simply be edited
Once submitted, an incorrect statement cannot be reopened and changed.
A correction statement has to be filed through the prescribed process.
The validation screen is therefore the last practical opportunity to catch errors before filing.
Not every non-salary payment is automatically Form 140
Form allocation depends on the relevant provision, payment and deductee.
Particular care is required for non-resident payments, for which Form 144 may apply.
The utility route still exists
The new online route does not mean that the utility-based process has disappeared.
The new forms also have preparation and validation utilities. Large-volume deductors or entities whose payroll/accounting systems already produce structured files may continue to prefer that route.
The real improvement is a simpler online option, not the abolition of every other filing method.
Before you start
Keep ready:
active TAN and TRACES login
registered mobile/email access
challan details or available unconsumed challans
deductee-wise payment data
PAN and section details
payment/credit and deduction dates
relevant certificate details
bulk CSV, if required
Aadhaar OTP or registered DSC for e-verification
Also check the deductor and Responsible Person details in the TRACES profile before starting.
How to file Form 138 or Form 140
The practical sequence is:
1. Log in
Enter TAN and complete portal authentication.
2. Open filing
Go to e-File & View → File TDS/TCS Forms & Statements and select Form 138 or Form 140.
3. Select the statement
Choose Tax Year 2026-27 → Q2 → Regular → Prepare & File Online.
4. Check pre-filled details
Verify deductor and Responsible Person particulars. Correct the TRACES profile first if required.
5. Import/add challans
Import available unconsumed challans/BINs or add a challan manually where permitted.
6. Enter/upload deductees
Enter individual records or upload the prescribed CSV.
7. Map challans
Map deductees against challans and resolve any difference.
8. Validate
Run Validate Statement, correct errors and review the summary.
9. E-verify and file
Use Aadhaar OTP or DSC, as applicable, and retain the acknowledgement/reference generated after submission.
A draft can be saved and resumed, which is useful where preparation and review are done separately.
Form 138 and Form 140 are not identical
The workflow is broadly common, but the data requirements differ.
Form 138 is principally the salary statement and has additional salary/pension reporting requirements in the relevant quarter, including additional Q4 annexures.
Form 140 covers non-salary payments to residents and therefore contains payment-specific deductee fields.
The forms should not be treated merely as renamed versions of 24Q and 26Q. The applicable section and transaction type still determine what must be reported.
Admin and Sub-User: useful for firms
The new workflow also provides an internal-control advantage.
A Sub-User can prepare and validate, while the Admin reviews, e-verifies and files.
The practical sequence becomes:
Staff prepares → staff validates → principal reviews → principal e-verifies
A draft can also be sent back for correction before final submission.
For CA firms, this provides delegation without giving up final filing control.
Six checks before the final click
1. Challan balance — reconcile the portal balance with books and actual deposits.
2. PAN — check invalid or inoperative PANs.
3. Section and rate — a technically successful upload can still contain an incorrect deduction.
4. Mapping — ensure every deductee is appropriately mapped.
5. E-verification — confirm Aadhaar/DSC readiness before the due date.
6. Final reconciliation —
Books = TDS working = challans = deductee statement = mapped TDS
This is the most important control in the process.
A separate October 2026 change: Property purchased from an NRI
Another important TDS change took effect from 1 October 2026, but it should not be confused with quarterly Form 138/140 filing.
Where a resident individual or HUF purchases immovable property from a non-resident, the buyer no longer needs to obtain a TAN merely for this TDS obligation.
The process has moved towards a PAN-based mechanism, reducing a significant procedural burden.
But:
Removal of TAN does not remove the tax obligation.
The buyer must still determine the applicable withholding provision and rate for payment to a non-resident. This is a procedural simplification, not a change in the substantive tax treatment of the NRI seller.
The transaction has its own prescribed reporting mechanism and should not be mixed with the quarterly Form 138/140 statement.
CA S.Ahuja Perspective
The real TDS change is not 24Q becoming 138 or 26Q becoming 140.
It is the ability to move from preparation to filing through one online TRACES workflow.
That means less duplication, less manual challan entry and an earlier opportunity to identify mismatches.
But the fundamental responsibility remains unchanged.
Before filing, the deductor should be able to answer four questions:
Was the correct tax deducted?
Was it deposited correctly?
Was it reported against the correct deductee?
Does the statement reconcile with the books?
If the answer to all four is yes, the new TRACES facility does what it is intended to do:
make compliance easier without making the underlying control weaker.
For Q2 2026-27, the immediate deadline is 31 October 2026.
