Form 26Q to Form 140: Tax Year 2026-27 Transition Checklist
Form 140 is the new domestic non-salary TDS return for the Income Tax Act 2025 machinery from 1 April 2026. The transition is not a find-and-replace exercise: the firm has to classify the period, map the old payment reference to the new Section 393 table and verify the payment code used by the filing software.
The year gate comes first
| Question | If the answer is “earlier period” | If the answer is “new tax year” |
|---|---|---|
| Sum paid or credited | 31 March 2026 or earlier | 1 April 2026 onwards |
| Governing law | Income-tax Act 1961 | Income Tax Act 2025 |
| Domestic non-salary return | Form 26Q | Form 140 |
| Salary return | Form 24Q | Form 138 |
| Non-resident return | Form 27Q | Form 144 |
| Certificate | Form 16A | Form 131 |
Corrections follow the underlying period. A Q4 FY 2025-26 correction remains on Form 26Q even if the correction is prepared after 1 April 2026.
The eight-step implementation checklist
- Inventory the payment heads. List salary, contractors, professional fees, rent, interest, purchase of goods, non-resident payments and TCS separately.
- Map the old reference. Keep 192, 194C, 194J, 194Q, 195 or 206C in the first column for traceability.
- Add the new provision. Use Sec 392 for salary, Sec 393(1) for resident non-salary, Sec 393(2) for non-residents and Sec 394 for TCS.
- Verify the payment code. The Section 393 table is organised by serialized payment codes; do not assume the old section number is the code.
- Update the software. Check the new return, challan, certificate and code mappings in the approved utility.
- Preserve the old-year correction route. Add a governing-year field to every correction tracker.
- Update certificates and client communication. Form 16 becomes 130 and Form 16A becomes 131 for the new machinery.
- Test one dummy filing per return type. Retain the result and the reviewer’s sign-off before the first live quarter.
What the working paper should show
The transition sheet should carry TAN, payee type, payment head, old section, new section, payment code, threshold test, rate, amount paid, tax deducted, challan reference, return form, statement match, correction status and reviewer initials. This is the bridge between the client’s ledger vocabulary and the new filing utility.
Common mistakes
- Using Form 140 because the filing date is after April 2026.
- Mapping all 194-series payments to one undifferentiated rate or code.
- Omitting non-resident payments from the Sec 393(2) review.
- Updating the quarterly return but not Form 16A / Form 131 processes.
- Treating the TDS transition as separate from the Section 536 pending-proceedings register.
- Replacing old references instead of retaining them as the audit trail.
Use the TDS section converter, Income Tax Act 2025 mapper, TDS transition working paper and partner review memo together.