Form 138: The Quarterly Salary TDS Return That Replaced Form 24Q

Form 24Q is gone. From the quarter ended 30 June 2026, the quarterly salary TDS return is Form 138, under the Income-tax Act, 2025 and the Income-tax Rules, 2026. The first return under the new numbering fell due on 31 July 2026.

The due dates did not move and the substance is largely familiar. But this filing matters more than it used to, because of what now hangs off it: Form 130 — the certificate that replaced Form 16 — is generated from your Form 138 data and cannot be prepared manually. Under the old regime a bad Form 24Q produced a mismatch you could chase later. Under the new one it produces a certificate you cannot issue.

Position stated as at July 2026. Form numbering and procedural detail are set by the tax authority; confirm the current position before filing.

The due dates

Unchanged from Form 24Q. Note the asymmetry that trips up new payroll staff: three quarters get a one-month filing window, and Q4 gets two — because Q4 carries the annual reconciliation that produces the certificates.

What changed, and what did not

One consequence worth flagging for finance teams: the TCS return moved to the same 31 July date as Q1, rather than the earlier mid-July date it had as Form 27EQ. If your calendar staggered those two deliberately, it no longer does.

The two annexures

The structure follows the old form's logic. Annexure I goes with every quarterly filing and carries the deductee-wise breakdown — who was paid, how much, how much tax was deducted, against which challan. Annexure II goes with the fourth-quarter filing only, and carries the annual salary detail and tax computation for each employee.

Annexure II is where the certificate comes from. The detailed salary computation that appears in Form 130 is built from it. Which produces the practical rule that most reliably keeps employers out of trouble:

What hangs off this filing

• Form 130 — the annual salary TDS certificate, generated on TRACES from your filings once Q4 is processed, and issued to each employee by 15 June.
• Form 168 — the employee's consolidated tax statement, replacing Form 26AS, where the deducted tax appears as credit against their PAN.
• The employee's return. If the credit is not in Form 168, the employee cannot claim it, and the query comes back to payroll.

The chain runs one way: deposit, then Form 138, then Form 130 and Form 168. Nothing downstream can be better than the return that produced it.

The filing sequence

1. Deduct TDS on salary monthly under s.392, on the projected annual liability spread over the remaining months.
2. Deposit by the seventh of the following month, and keep the challan identification details.
3. Prepare Annexure I for the quarter — deductee-wise deduction and challan mapping.
4. For Q4, prepare Annexure II — the annual salary and tax computation per employee.
5. Validate and upload the statement by the due date.
6. Check for defaults once processed. Defaults appear on TRACES; clear them with a correction statement, paying any shortfall first.
7. After Q4 is processed, request and download Form 130, and issue it by 15 June.

What lateness and error cost

Three separate exposures, which is why this filing is worth a calendar reminder rather than a habit:

• Late deposit — interest from the due date until payment.
• Late filing of the statement — a per-day fee running until the return is filed. Under the 1961 Act this was the ₹200-per-day late fee under Section 234E, with a separate penalty for prolonged failure under Section 271H. Under the Income-tax Act, 2025 these become Section 427 (the ₹200-per-day fee, capped at the tax in the statement, payable before the belated return is furnished) and Section 461 (the penalty for non-filing or incorrect filing). The old sections still govern statements for periods up to 31 March 2026. This is general information for employers, not a substitute for advice from a qualified chartered accountant on a specific situation.