TDS Return On Non-Salary Payments To Residents: Form 26Q Is Now Form 140

If Form 24Q is the salary TDS return, Form 26Q has always been its non-salary counterpart, the return every business files for TDS deducted on rent, professional fees, commission, brokerage, contractor payments, and interest paid to resident vendors and payees. This form keeps doing exactly that job under the new Act, now renumbered and reorganized around a different section structure.

Old form: Form 26Q, filed under various TDS sections of the Income Tax Act, 1961, most commonly Sections 194A, 194C, 194I, and 194J

New form: Form 140, filed under Section 393(1) of the Income Tax Act, 2025, read with Rule 219 of the Income Tax Rules, 2026, applicable from Tax Year 2026-27 onwards

What the Form Covers

Form 26Q, and now Form 140, is the quarterly TDS statement for tax deducted on payments made to resident deductees, other than salary. This covers a wide range of common business payments:

• Interest other than interest on securities, previously reported under Section 194A
• Contractor and sub-contractor payments, previously under Section 194C
• Rent, previously under Section 194I
• Professional and technical fees, previously under Section 194J
• Commission and brokerage, previously under Section 194H
• Several other specified payment categories captured under the old scattered 194 series of sections

The form captures deductor details, challan details, and a deductee-wise TDS breakup for the quarter, similar in structure to what Form 24Q does for salary, but consolidated into a single annexure rather than the three annexures salary TDS requires.

What Actually Changed

• Form number: 26Q becomes 140
• Section structure: the old scattered 194 series, 194A, 194C, 194H, 194I, 194J, and others, is consolidated under a single umbrella provision, Section 393(1), of the new Act. Individual payment types are no longer distinguished by separate section numbers the way they were before
• Payment codes replace section citations: since multiple old sections now sit under one consolidated section, each TDS entry in Form 140 is tagged using a numeric payment code rather than a section number, so a professional fee deduction that used to cite 194J and a rent deduction that used to cite 194I are now distinguished purely by their payment code, not by section reference
• Structure: Form 140 retains a single annexure structure, deductor details, challan details, and deductee-wise breakup, largely mirroring the old Form 26Q layout
• Corresponding certificate renumbered: Form 16A, the TDS certificate issued for non-salary deductions, becomes Form 131 under the new numbering
• Filing deadlines unchanged: July 31, October 31, January 31, and May 31 for the four quarters respectively, same as before

The most important adjustment here is mental, not mechanical: practitioners who have spent years mentally sorting deductions by section number, 194C for contractors, 194J for professionals, 194I for rent, now need to sort them by payment code instead, since the section reference itself no longer varies by payment type on the return.

Worked Example

Old position, Form 26Q, applicable up to Q4 of FY 2025-26:

A manufacturing firm pays Rs. 8,00,000 in contractor payments during Q3 of FY 2025-26, deducting TDS under Section 194C, and separately pays Rs. 3,00,000 in professional consulting fees, deducting TDS under Section 194J. Both deductions are reported in the same Form 26Q for that quarter, with each deductee-wise entry clearly citing the applicable section, 194C for the contractor and 194J for the consultant, making it straightforward to identify the nature of each payment directly from the section column.

New position, Form 140, applicable from Q1 of FY 2026-27 onwards:

The same firm makes an identical set of payments in the equivalent quarter of FY 2026-27. Both the contractor payment and the professional fee payment are now reported under the single consolidated Section 393(1), and each entry is instead distinguished by its payment code, one code corresponding to contractor payments and a different code corresponding to professional fees. The TDS amounts and rates remain the same as before. Only the reference system used to identify the nature of each payment has changed, from a section number to a payment code.

Why This Matters for Filing

• Build or obtain a payment code reference chart before the first Form 140 filing, mapping each old familiar section, 194A, 194C, 194H, 194I, 194J, and others, to its corresponding new payment code, so vendor payment classification does not slow down during return preparation.
• Accounting software and ERP systems that auto-tag TDS entries by old section number need reconfiguration to use the new payment codes, or entries risk being misclassified or rejected during filing.
• Vendor-side TDS certificates change too. Any vendor expecting a Form 16A for FY 2026-27 onwards will instead receive Form 131, so update vendor communication templates and payment advice formats accordingly.
• Since multiple old sections now sit under a single Section 393(1) reference, any client query about which section applies to a specific payment type should be answered with the payment code, not a section number, going forward.

Bottom Line

Form 26Q has become Form 140, and the underlying job, reporting TDS on non-salary payments to resident deductees, has not changed. What has changed is the reference architecture: several familiar 194-series sections have been folded into one consolidated Section 393(1), with individual payment types now distinguished by numeric payment codes rather than separate section numbers. The filing rhythm stays the same. The lookup habit needs to change.