While many people associate TDS only with salary, it actually applies to a much wider range of payments. Whether you’re paying an individual or any other entity, a small percentage of TDS is often deducted when making payments like commissions, rent, legal fees, or contractor charges.
Now, how do you inform the ITD about all the payments you’ve made and deducted TDS on those payments?
You do that by filing Form 140.
What is Form 140?
Form 140 is a quarterly TDS return used to report tax deducted on payments made to resident Indians, other than salary. It must be filed by any deductor making such payments – including companies, partnership firms, and government bodies.
For individuals and HUFs, the requirement generally applies if their business or profession required a tax audit in the previous year, or when they make specified high-value payments such as monthly rent exceeding ₹50,000.
Ultimately, if you’re deducting TDS on contractor payments, professional fees, rent, or interest, those deductions need to be reported through Form 140.
This benefits both sides. It gives the ITD a clear record of how much TDS was deducted, from whom it was deducted, and against which transaction. At the same time, it ensures the deduction is linked to the correct PAN, so the recipient can see the tax credit in their tax statement; Form 168 (Annual Information Statement) and claim it while filing their ITR.
So the process works in two parts: first deduct and deposit TDS, then report those deductions through Form 140.
What payments does it cover?
Form 140 applies to a broad range of non-salary payments reported under Section 393 of the Income Tax Act, 2025. Some of the most commonly covered payments include:
- Payments to contractors and sub-contractors.
- Fees for professional or technical services (legal, consulting, freelance services).
- Rent paid for land, building, or machinery.
- Interest payment other than ‘Interest on Securities’ (e.g., bank interest).
- Commission or brokerage payments.
- Payments by partnership firms to partners (salary, bonus, or interest).
We’ve only listed the popular ones here, you can refer to Draft Form 140 which is attached at the bottom.
What are the due dates for filing Form 140?
As mentioned earlier, depositing TDS and filing the return are two separate compliance steps, and each have a separate timeline.
1. Quarterly return filing
Since Form 140 is a quarterly return, it is required to be filed by the end of every quarter. Here’s the table with it’s due date:
| Quarter | Month covered | Due date |
|---|---|---|
| Q1 | April-June | 31st July |
| Q2 | July-September | 31st October |
| Q3 | October-December | 31st January |
| Q4 | January-March | 31st May |
2. Monthly TDS deposit
The TDS you deduct in a month must be deposited with the government by the 7th of the following month.
For example, if TDS is deducted in August, it must be deposited by September 7.
But there’s an exemption for the month of March, the deposit can be made up to April 30th.
These timelines are key to closing the TDS process correctly.
What happens if you miss the deadline?
There are clear consequences if TDS isn’t deducted or reported through Form 140 on time:
1. Late filing fee
If the return isn’t filed by the due date, a fee of ₹200 per day applies until the date Form 140 is filed. However, the total fee cannot exceed the TDS amount for that quarter.
2. Interest on delay
If you fail to deduct TDS on time, interest of 1% per month or part of the month applies. And if you deducted TDS but did not deposit on time, interest of 1.5% per month applies from the date of deduction to the date of payment.
3. Additional penalty
If the delay extends beyond one year, or incorrect details are reported, the Assessing Officer may levy a penalty from ₹10,000 to ₹1,00,000.
To help you get familiar with the new layout and the payments it covers, we’ve linked the official draft below.
Draft Form 140.pdf (2.8 MB)
Questions? Let’s sort them out.