TDS from Form 26AS to Form 140: What Changes in Tax Year 2026-27
The practical TDS transition is easy to describe and easy to mishandle. From 1 April 2026, non-salary TDS is organised under Section 393 of the Income Tax Act 2025 and the quarterly domestic return moves from Form 26Q to Form 140. But a correction for FY 2025-26 does not become a Form 140 filing simply because the correction is made later.
Keep the year boundary in the first column
Every reconciliation should carry the period paid or credited, the governing Act, the old reference, the new reference where applicable, the return form and the correction status. This prevents a common error: using the new form number for an old-year correction.
| Work item | FY 2025-26 and earlier | Tax year 2026-27 onwards |
|---|---|---|
| Non-salary TDS law | 1961 Act, old 194-series | 2025 Act, Sec 393 tables |
| Quarterly domestic return | Form 26Q | Form 140 |
| Salary return | Form 24Q | Form 138 |
| Non-resident return | Form 27Q | Form 144 |
| TDS certificate | Form 16A | Form 131 |
The reconciliation still has four legs
Match the books deduction, challan deposit, quarterly return and deductee-side statement (Form 26AS/AIS or the relevant certificate). A row that appears in 26AS but not in books is not automatically a credit to claim; it is an exception to investigate.
Separate short deduction, short payment, late deposit, wrong PAN, wrong quarter, duplicate entry and deductor correction. The reason determines the follow-up and the disclosure.
Section 393 is a routing layer, not a shortcut
The familiar 194C, 194J and 194Q labels remain useful for people and ledgers, but the new framework organises non-salary TDS by payment-code tables. Carry the old label in the working paper, add “Sec 393(1)” and verify the code in the official utility before filing. For a payment to a non-resident, use the Sec 393(2) route and retain the chargeability / treaty analysis.
A review-ready control sheet
The first transition-year sheet should include: deductor TAN, payment head, old section, new section, payment code, payee status, threshold test, rate, amount paid, tax deducted, challan date, return form, statement match, exception owner and closure date.
That layout lets a reviewer answer three questions quickly: was the tax right, was it deposited and was it reported in the right form for the right year?
Use the TDS section converter, TDS rate finder and TDS transition working paper together.