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Does your business pay professional fees, rent, or commissions? If so, you likely know about Form 26Q. Historically, you filed this form every quarter.
However, a massive compliance shift is happening right now [3]. Specifically, the July 31st deadline approaches fast for Q1 filings. This urgency exists because the new Income-tax Act, 2025 started on April 1, 2026 [3]. As a result, the government completely restructured the old TDS forms.
Therefore, you cannot file using the old form numbers anymore [3]. Doing so will cause instant portal rejections. Consequently, you must learn the new rules quickly to meet the upcoming July 31 deadline.
Mapping Old Forms to New Forms
The government aims to simplify your financial reporting [1]. While the basic logic of deducting tax remains unchanged, the form numbers are totally different [1].
Therefore, your accounting team must follow this exact mapping guide [1].
First, the old Form 26Q is now Form 140 [1]. You will use this quarterly statement to report tax deducted on non-salary payments. For instance, it covers rent, commissions, and professional fees [1].
Second, the old Form 24Q has officially become Form 138 [1]. You must file this form if you deduct tax from employee salaries [1].
Third, the government replaced the old Form 27Q with Form 144 [1].
Finally, the old Form 27EQ is now called Form 143 [1].
What is Different Inside Form 140?
Form 140 keeps the same basic structure as the old Form 26Q [3]. For example, it still requires deductor details and deductee PANs [3]. However, you must adapt to a few critical changes immediately [3].
1. Numeric Payment Codes Replace Section Numbers
Under the old Act, accountants memorized sections like 194C or 194J. In contrast, the new Form 140 requires specific numeric payment codes [3]. If you enter an old section number, the portal will reject your file [3].
2. Strict Two-Year Correction Window
Furthermore, the new rules strictly limit any future corrections. Specifically, you can only file a correction statement within two years [3]. For example, you cannot fix a Q1 2026-27 return after March 31, 2029 [3].
Crucial Filing Deadlines for FY 2026-27
During the current financial year, you must report all Q1 non-salary deductions using Form 140 [1]. Fortunately, the due dates remain exactly the same [1]:
- Q1 (April – June): Due by July 31, 2026 [1].
- Q2 (July – September): Due by October 31, 2026 [1].
- Q3 (October – December): Due by January 31, 2027 [1].
- Q4 (January – March): Due by May 31, 2027 [1].
Managing the Transition Rule
Business owners often feel confused about payments overlapping the transition period [3]. To determine the correct Act, you must identify the earlier event [3]. You must compare the date of credit and the date of payment [3].
If you credited a fee in March 2026 but paid it in April, the old Act applies [3]. Because of this, you should have deducted TDS in March [3].
Conversely, the new Act mandatorily applies for all payments triggered after April 1, 2026 [3]. Therefore, you must definitely use the new Form 140 [3].
The Cost of Missing the Deadline
Transition years always invite higher scrutiny from the tax department. Because the new forms feature strict validation layers, your data must be flawless [3].
If you fail to file Form 140 accurately by July 31, you will face direct financial pain [3].
First, the government will levy a mandatory penalty of ₹200 per day [3]. Second, the deducted tax will not appear in your vendors’ records [3]. As a result, they cannot claim their tax credit [3]. This failure severely damages your important business relationships. Finally, chronic non-compliance can trigger severe penal proceedings [3].
Step-by-Step Preparation Checklist
To ensure instant acceptance, your finance team must complete three steps today.
First, update your accounting systems immediately. They must support the latest validation utilities from the Income Tax Department website.
Second, verify all deductee PAN details carefully [1]. Invalid details will definitely trigger higher TDS rates.
Third, map your payment codes properly. You must assign the correct new numeric codes to all contractor payments.
Conclusion and Next Steps
Tax planning requires continuous attention rather than a chaotic year-end rush. By acting quickly this quarter, you actively protect your cash flow. This approach is the core of proactive tax planning and compliance.
Therefore, do not let hidden penalties ruin your profit margins. Take control of your corporate numbers today. You can achieve this by scheduling a consultation with the experienced financial professionals at Finwell Growth Solutions.
Our expert advisory team will smoothly transition your business to the new framework. We will eliminate errors and protect your capital. Contact us today to secure your July filings.
Form 140 and New TDS Return Training
This video provides a detailed breakdown of the new Form 140 structure and filing steps, which will help your accounting team understand the practical changes required under the Income-tax Act, 2025.