Tax Year 2025–26 Replaces Form 24Q Quarterly Filing Income Tax Act 2025 Updated April 2026

Download Form 138 Salary TDS
Return Statement

Complete employer guide: official PDF download, step-by-step filing instructions, due dates, and Annexure II & III templates with sample data. Verified by CA Sagar Batra for 2026 compliance.

Download Form 138 — Free Instant PDF Official Income Tax Portal →

Reviewed by CA Sagar Batra — Chartered Accountant & TDS Compliance Specialist

CA Sagar Batra holds a Chartered Accountancy qualification from ICAI with over 12 years of experience in direct tax compliance, payroll advisory, and TDS return management for corporates and MSMEs across India. He has guided over 400 employers through Form 24Q and now Form 138 transition filings under the Income Tax Act, 2025. This article has been reviewed for accuracy as of Tax Year 2025-26.

Last reviewed: April 2026

₹200 Late fee per day (Section 427)

4 Quarters per tax year

2 yrs Correction window after tax year end

₹1L Max penalty (Section 465)

What is Form 138 Salary TDS Return Statement?

Official Quarterly Report • Income Tax Act, 2025

Form 138 (Form No.24Q) is the mandatory quarterly TDS return that Indian employers must file after deducting tax from employees' salaries. Under the Income Tax Act, 2025 (effective 1 April 2026), it officially replaces the older Form 24Q, bringing simplified annexures, pre-filled portal data, and updated "Tax Year" terminology.

The form serves a dual purpose: it gives the government a verified record of all TDS deducted and deposited, and it ensures that every employee's TDS credit is correctly reflected in their Form 168 (Tax Passbook) — which has replaced Form 26AS from Tax Year 2026-27 onwards.

Important Transition Note For salaries paid up to March 2026 (FY 2025-26), TDS obligations follow Section 192 of the old Act. For salaries paid from April 2026 onwards (Tax Year 2026-27), TDS obligations follow Section 392(1) of the Income Tax Act, 2025. Employers must reset TDS computations from 1 April 2026.

Who must file Form 138?

Mandatory for all entities deducting tax from salary payments

🏢

All Employers

Whether a private company, PSUs, government department, partnership firm, LLP, or individual business owner — if you deduct tax under Section 392 from salaries, you must file.

🏦

Specified Banks

Banks that deduct tax on pension and interest income paid to specified senior citizens under Section 393(1) are legally required to file this form quarterly.

Even if you have just one employee and the salary is below the basic exemption limit, a STRONG NIL return must be submitted for that quarter — skipping a quarter is not permitted.

Filing Timeline — Tax Year 2025-26

All four quarterly deadlines at a glance

Quarter 1

April – June 2025

Due Date 31 Jul 2025

Quarter 2

July – Sep 2025

Due Date 31 Oct 2025

Quarter 3

Oct – Dec 2025

Due Date 31 Jan 2026

Q4★

Quarter 4

Jan – Mar 2026

Due Date 31 May 2026

Late Filing Fee (Section 427)

₹200 per day of delay from the due date until the return is filed. Total fee cannot exceed the TDS amount. Additional penalties up to ₹1,00,000 may apply under Section 465(2)(g) for wilful default.

Preparation Tip: Q4 filings require mandatory Annexure II (regular employees) and Annexure III (senior citizens). Please allow at least 10 days extra for data reconciliation.

How to file Form 138 — step by step

From monthly deduction to acknowledgment receipt

Deduct TDS monthly

Calculate TDS on each employee's salary based on the latest income tax slabs (new regime default under the 2025 Act). Deduct at source every pay cycle and maintain salary slip records.

Deposit to Central Government

Remit deducted TDS via challan (new forms live from 1 April 2026). Deposit by the 7th of the following month. Note BSR code, challan serial number, and date of deposit.

Consolidate quarterly payroll data

Collect salary amounts, employee PANs, and section codes (392 for salary). Verify PAN–Aadhaar linkage of all employees to avoid deduction at higher rates.

Prepare return using the RPU

Use the Return Preparation Utility (RPU). Fill Part A (employer), Part B (challan), and Annexure I (employee-wise). For Q4, additionally prepare Annexure II and Annexure III.

Validate with FVU

Run the prepared file through the File Validation Utility. Fix any errors flagged before uploading — common errors include PAN mismatches and incorrect BSR codes.

Upload and download the ARN

Submit the validated .fvu file on the e-filing portal. Save the Acknowledgment Receipt Number (ARN) as proof of filing for your compliance records.

Form 138 vs Form 24Q

Key changes under the Income Tax Act, 2025

Old — up to FY 2024-25 Form 24Q	Current — TY 2025-26 onwards Form 138
Single annexure structure for all quarters	Annexure I (Q1–Q3) + II & III for Q4
Manual data entry — high error rate	Pre-filled data from TRACES portal
Uses "Assessment Year" terminology	Updated "Tax Year" terminology
No pre-filled portal support	Dropdown validation & better error detection
Limited correction window guidance	2-year correction window clearly defined
No senior citizen-specific annexure	Annexure III covers specified senior citizens
Form 26AS for TDS credit view	Form 168 (Tax Passbook) replaces Form 26AS

TDS rate examples — how deductions are calculated

New tax regime (default) | Tax Year 2025-26 | ABC Manufacturing Pvt Ltd

Employee Name	Salary (₹)	Tax Slab	Effective Rate	Annual TDS (₹)	Monthly (₹)
Vikram Singh	3,00,000	Below ₹3L slab	0% (NIL)	—	—
Arjun Kumar	5,40,000	₹3L–₹7L @ 5%	4.44%	24,000	2,000
Deepak Rao	6,00,000	₹3L–₹7L @ 5%	5.00%	30,000	2,500
Sunita Gupta	7,20,000	₹7L–₹10L @ 10%	8.06%	58,000	4,833
Ramesh Sharma	9,60,000	Up to ₹10L — blended	10.42%	1,00,000	8,333
Meena Patel	14,40,000	₹10L–₹12L @ 15%	17.20%	2,47,680	20,640
Kavitha Nair	18,00,000	₹15L+ @ 30%	20.70%	3,72,600	31,050

Sample Form 138 — dummy data

Part A, Part B, and all Annexures — ABC Manufacturing Pvt Ltd, Tax Year 2025-26

Form No. 138 [Rule 219(1), Table Sl. No. 1] — Quarterly TDS Statement
Quarter ending: 31 March 2026 (Q4) | Tax Year: 2025-26 | Section 397(3)(b) of the Income Tax Act, 2025

Part A — Particulars of the deductor

Type of DeductorNon-Government

TAN NumberDELM12345F

Name of DeductorABC Manufacturing Pvt Ltd

AddressPlot 14, Sector 62, Noida, Uttar Pradesh – 201301, India

PAN of DeductorAABCA1234Z

Tax Year2025-26

Particulars of person responsible for deduction

NamePriya Mehta

PANAXMPM9876K

DesignationChief Financial Officer

Contact+91 98765 43211

Part B — Challan details (Q4: January–March 2026)

Sl.	Total Tax (₹)	Mode	BSR Code	Minor Head	Date of Deposit	Challan Serial No.
1	1,24,800	C	0110002	200	07/02/2026	00412
2	1,31,500	C	0110002	200	07/03/2026	00687
3	1,18,200	C	0110002	200	07/04/2026	00891

Annexure I — Employee-wise TDS breakup

Deductee-wise breakup of TDS under Section 392 | Filed with each quarterly statement

Sl.	Employee Name	PAN	Section	Payment Date	Amount (₹)	TDS (₹)	Deposit Date	Status
1	Ramesh Sharma	AAAPS1234A	392	31/01/2026	80,000	3,510	31/01/2026	Filed
2	Sunita Gupta	BCCPG5678B	392	31/01/2026	60,000	1,717	31/01/2026	Filed
3	Arjun Kumar	CDDPK9012C	392	31/01/2026	45,000	683	31/01/2026	Filed
4	Meena Patel	DEEPT2345D	392	28/02/2026	1,20,000	11,050	28/02/2026	Filed
5	Vikram Singh	EFFPS6789E	392	28/02/2026	25,000	0	—	NIL (Below Thres.)
6	Kavitha Nair	FGGPT0123F	392	31/03/2026	1,50,000	20,700	31/03/2026	Filed
7	Deepak Rao	GHHPW4567G	392	31/03/2026	50,000	1,192	31/03/2026	Filed

Annexure II — Full-year salary details & net tax payable

(Q4 Only) Detailed reconciliation for Tax Year 2025-26

Salary Logic: Z = (K + L) − (R + S + T + U + V + W + X + Y)

Income Logic: AD = Z − AA + AC

Tax Status: (+) = Shortfall to deduct | (−) = Excess/Refund

PAN / Name	Total Gross (K)	Exemptions (R)	Std. Ded (T)	Salary Income (Z)	Taxable Income (BD)	Net Tax (BL)	Total TDS (BP)	Shortfall/Excess (BQ)
Ramesh Sharma AAAPS1234A	9,60,000	1,63,200	75,000	7,19,400	5,69,400	43,555	42,120	+1,435
Sunita Gupta BCCPG5678B	7,20,000	1,10,400	75,000	5,32,200	3,82,200	13,634	20,600	−6,966
Arjun Kumar CDDPK9012C	5,40,000	72,000	75,000	3,90,600	2,90,600	4,711	8,200	−3,489
Meena Patel DEEPT2345D	14,40,000	1,99,200	75,000	11,63,400	10,13,400	1,32,090	1,32,600	−510
Kavitha Nair FGGPT0123F	18,00,000	2,19,200	75,000	15,03,400	13,53,400	2,50,141	2,48,400	+1,741

I, Priya Mehta (PAN: AXMPM9876K), person responsible for tax deduction at ABC Manufacturing Pvt Ltd, certify that the particulars furnished above for the Tax Year 2025-26 are correct and complete to the best of my knowledge.

Place Noida, Uttar Pradesh

Date 28/05/2026

Designation Chief Financial Officer

Annexure III — Pension & interest income

(Q4 Only) Specific report for senior citizens under Section 393

NOTE: Applicable only to Specified Banks (Example: Sunrise Bank Ltd)

PAN / Name	Gross Pension (E)	Std. Ded. (H)	Salary Income (J)	Interest Income (K)	GTI (L)	Net Tax Payable	TDS Deducted	Shortfall/Excess
Mohan Lal Verma KKJPR8765S	4,80,000	50,000	4,30,000	72,000	5,02,000	13,930	14,400	−470
Sushila Devi Sharma LLKPS9876T	3,60,000	50,000	3,10,000	48,000	3,58,000	0	0	NIL
Rajendra Prasad Joshi MMLPT0987U	6,00,000	50,000	5,50,000	1,20,000	6,70,000	40,000	43,200	−3,200

Frequently asked questions

Common queries about Form 138 filing — answered by CA Sagar Batra

What is Form 138 and what has it replaced? −

Form 138 is the official quarterly TDS return for salary under the Income Tax Act, 2025. It replaces Form 24Q from Tax Year 2025-26 onwards. The form covers tax deducted under Section 392 (salary) and Section 393(1) (pension/interest for senior citizens).

Are all annexures required for every quarter? −

No. Only Annexure I is required for all four quarters. Annexure II (full-year salary details) and Annexure III (for specified banks only) are required only with the Q4 (last quarter) statement filed by 31 May.

What happens if the return is not filed on time? −

Under Section 427, a late filing fee of ₹200 per day is charged until the return is filed. Continued non-filing can attract penalties up to ₹1,00,000 under Section 465(2)(g). Employees also suffer TDS credit mismatches in their Tax Passbook.

Has Form 26AS been replaced in 2026? −

Yes. Under the Income Tax Act, 2025, Form 26AS has been replaced by Form 168 (Tax Passbook). It consolidates all TDS, TCS, and tax credits. For TY 2026-27 onwards, credits should be checked in Form 168.

How do I correct a mistake in Form 138 after filing? −

You can file a Correction Statement through the CPC-TDS portal within two years of the end of the tax year. Common corrections include PAN mismatches, wrong challan details, and incorrect TDS amounts.

Is digital filing mandatory? −

Yes. Digital filing is mandatory for all deductors; physical returns are no longer accepted. The return must be prepared using the RPU, validated through the FVU, and uploaded on the official Income Tax e-filing portal.

Download Form 138 Salary TDSReturn Statement