TDS Return On Salary: Form 24Q Is Now Form 138

Every employer deducting TDS on salary has filed Form 24Q every quarter for years without a second thought. That form now has a new number, a new section reference, and one genuine addition to what it covers. Payroll teams and CAs handling salary TDS need to treat this as more than a label change.

Old form: Form 24Q, filed under Section 192 of the Income Tax Act, 1961

New form: Form 138, filed under Section 392 and 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 24Q, and now Form 138, is the quarterly TDS statement filed by any employer, whether a company, firm, government body, or individual, who deducts tax from salary paid to employees. The form has always had three annexures:

• Annexure I: challan details and deductee-wise TDS breakup, required for all four quarters
• Annexure II: full salary breakup for each employee, including deductions claimed, income from other heads, and total tax liability, required only with the Q4 statement
• Annexure III: a newly formalized annexure covering pension and interest income paid to specified senior citizens by banks, also required only with Q4

Filing deadlines remain unchanged: July 31, October 31, January 31, and May 31 for the four quarters respectively.

What Actually Changed

• Form number: 24Q becomes 138
• Section reference: salary TDS now flows from Section 392 of the new Act, in place of the old Section 192, and the form is filed under Section 397(3)(b) read with Rule 219
• New reporting category folded in: under Section 393(1), specified banks are now required to report TDS deducted on pension and interest income paid to certain senior citizens through the same Form 138, using Annexure III. This was handled separately or less formally under the old framework, and is now a standardized part of the salary TDS return itself
• Payment codes replace section-based reporting: individual TDS entries that were tagged with old section references are now tagged using a new numeric payment code series, broadly in the 1001 to 1067 range for salary-related payments, instead of citing Section 192 directly on each line
• Corresponding certificate also renumbered: Form 16, the TDS certificate issued to each employee based on this return, becomes Form 130, now structured with three parts instead of two, adding a distinct salary computation or pension annexure section
• Penalty references updated: the late filing fee under old Section 234E, Rs. 200 per day of delay, continues under the new Act. The penalty for persistent non-filing, previously under Section 271H, now sits under Section 465(2)(g), with amounts up to Rs. 1,00,000

The core filing mechanics, quarterly cycle, annexure structure, and deductee-wise reporting, remain familiar. The real adjustment is in section references, payment codes, and the formal inclusion of senior citizen interest and pension TDS within the same return.

Worked Example

Old position, Form 24Q, applicable up to Q4 of FY 2025-26:

A mid-sized company deducts TDS on salary for 80 employees under Section 192 throughout FY 2025-26. Each quarter, the payroll team files Form 24Q with Annexure I, and files Annexure II with the Q4 return in May 2026, covering the full-year salary breakup for all 80 employees. Since Q4 of FY 2025-26 falls in the January to March 2026 period, this return continues to be filed on the old Form 24Q, citing Section 192, even though it is physically filed in May 2026, since the governing law is determined by the pay period, not the filing date.

New position, Form 138, applicable from Q1 of FY 2026-27 onwards:

The same company begins Q1 of FY 2026-27 in April 2026. Salary TDS for this quarter is now deducted under Section 392 of the new Act, and the return is filed on Form 138, due by July 31, 2026. Each employee's TDS entry now carries a payment code from the new series instead of a direct Section 192 reference. When Q4 arrives, the company files Annexure II with the full salary breakup exactly as before, and if the company also happens to be a specified bank paying pension or interest to senior citizens, it separately files Annexure III to report that TDS as well, a reporting requirement that is now standardized within the same form. Employees receive Form 130 instead of Form 16 as their certificate, reflecting the new three-part structure.

Why This Matters for Filing

• Payroll software and internal templates that hard-code Section 192 references need to be updated to Section 392 and the new payment code series before the first Form 138 filing, or the return risks being treated as defective.
• Q4 of FY 2025-26 and Q1 of FY 2026-27 both fall due for filing around a similar window in 2026, one on the old Form 24Q and one on the new Form 138. Keep both processes clearly separated during this transition quarter to avoid filing the wrong form for the wrong period.
• If the firm's clients include banks paying pension or interest to senior citizens, confirm whether Annexure III reporting under Section 393(1) now applies to them directly through Form 138, since this consolidates a reporting obligation that may have been handled separately before.
• Since Form 130 has three parts instead of Form 16's two, review the employee certificate generation process well before the June 15 issuance deadline to ensure the additional salary computation or pension annexure section is populated correctly.

Bottom Line

Form 24Q has become Form 138, and while the quarterly filing rhythm and annexure logic remain familiar, the section references, payment codes, and certificate structure have all changed in ways that touch every payroll TDS filing going forward. The one genuine addition worth flagging to clients is Annexure III, which brings senior citizen pension and interest TDS reporting formally into the same return specified banks already use for salary.