ITR 2026: Filing TDS/TCS return for Q1? New forms, section codes and July 31 deadline explained
The first quarterly TDS and TCS return filing under the Income-tax Act, 2025 is due on July 31, 2026, with new return forms and section codes replacing the old framework. Here's what deductors need to know before filing Q1 returns for TY 2026-27.
- Jul 18, 2026,
- Updated Jul 18, 2026 5:33 PM IST
Businesses and tax deductors preparing to file their first-quarter TDS and TCS returns for Tax Year (TY) 2026-27 will need to adapt to a new compliance framework under the Income-tax Act, 2025. The first quarterly filing under the new law introduces revised return forms, new section codes and updated reporting requirements, making accurate reconciliation more important than ever.
Tax professionals say deductors should familiarise themselves with the changes well before the July 31, 2026 due date to avoid filing errors and last-minute compliance issues.
New return forms replace old formats
One of the biggest changes this year is the introduction of new quarterly return forms.
Under the revised framework:
Form 138 replaces Form 24Q for TDS deducted from salary payments. Form 140 replaces Form 26Q for TDS on non-salary payments. Form 143 replaces Form 27EQ for Tax Collected at Source (TCS).
All three forms must be filed for the first quarter of TY 2026-27 by July 31, 2026.
MUST READ: TDS deducted from salary but missing in Form 26AS? What the law says about your tax liability
The new forms are part of the migration to the Income-tax Act, 2025, which has reorganised provisions and introduced fresh section numbering while retaining the overall compliance structure.
New section codes for TDS and TCS
Along with new forms, deductors will also have to report transactions using the new section codes prescribed under the Income-tax Act, 2025.
For example, the earlier Section 192 governing TDS on salary payments is now reported under Section 1602. Similarly, TDS provisions relating to commission, rent, contractor payments, professional fees, purchase of goods and partnership remuneration have all been assigned new section numbers.
TCS provisions have also been renumbered. For instance, TCS on the sale of scrap, earlier covered under Section 206C(1), is now reported under Section 1073.
Tax experts advise businesses to ensure that their payroll systems, accounting software and TDS utilities have been updated with the revised section codes before preparing quarterly statements.
Q1 TDS/TCS Return Filing (TY 2026-27): Key changes at a glance
| Particulars | Old Framework | New Framework (Income-tax Act, 2025) |
|---|---|---|
| Salary TDS return | Form 24Q | Form 138 |
| Non-salary TDS return | Form 26Q | Form 140 |
| TCS return | Form 27EQ | Form 143 |
| Due date for Q1 return | 31 July | 31 July 2026 |
| Applicable law | Income-tax Act, 1961 | Income-tax Act, 2025 |
| Section references | Old section numbers | New section codes |
Key TDS/TCS section code changes
| Nature of Payment | Old Section | New Section | TDS/TCS Rate |
|---|---|---|---|
| Salary | 192 | 1602 | Slab rates |
| Commission/Brokerage | 194H | 1606 | 2% |
| Rent (Land/Building) | 194I(a) | 1609 | 10% |
| Rent (Plant & Machinery) | 194I(b) | 1610 | 2% |
| Professional/Technical Fees | 194J | 1627 | 10% |
| Contractor Payments | 194C | 1623 | 1%/2% |
| Purchase of Goods | 194Q | 1631 | 0.1% |
| Partner's Salary/Commission | 194T | 1667 | 10% |
| TCS on Sale of Scrap | 206C(1) | 1073 | 2% |
Compliance checklist before filing
| Checklist | Action Required |
|---|---|
| Verify return form | Use Form 138, 140 or 143, as applicable |
| Check section codes | Use new section numbers under the Income-tax Act, 2025 |
| Reconcile challans | Match tax deposited with deductions collected |
| Split common challans | Allocate amounts correctly if one challan covers multiple section codes |
| Meet due date | File Q1 TDS/TCS returns by July 31, 2026 |
Watch out for common challans
Chartered Accountant Harshil Sheth has highlighted another practical challenge that deductors may face while filing Q1 returns.
If tax has been deposited for multiple section codes using a single challan, additional reconciliation may be required before filing the returns.
According to Sheth, the challan amount must be correctly allocated among Form 138, Form 140 and Form 143, as the return filing utility needs to identify which portion of the tax payment relates to each return.
He advises taxpayers to carefully review challan details while downloading payment records, as proper classification at this stage can save considerable reconciliation time later.
Why accurate filing matters
Although the return formats have changed, the compliance responsibility remains the same. Incorrect section codes, mismatch between challans and returns, or errors in allocating tax payments can lead to defective filings, notices or delays in processing TDS credits.
Tax professionals recommend reconciling deduction records with challans before preparing quarterly returns and verifying that each deduction has been mapped to the correct form and section code.
With the first quarterly filing under the new Income-tax Act now underway, businesses that prepare early and update their systems are likely to find the transition smoother. Completing reconciliations in advance and ensuring the correct use of the revised forms and section codes can help avoid unnecessary compliance issues before the July 31, 2026 deadline.
Businesses and tax deductors preparing to file their first-quarter TDS and TCS returns for Tax Year (TY) 2026-27 will need to adapt to a new compliance framework under the Income-tax Act, 2025. The first quarterly filing under the new law introduces revised return forms, new section codes and updated reporting requirements, making accurate reconciliation more important than ever.
Tax professionals say deductors should familiarise themselves with the changes well before the July 31, 2026 due date to avoid filing errors and last-minute compliance issues.
New return forms replace old formats
One of the biggest changes this year is the introduction of new quarterly return forms.
Under the revised framework:
Form 138 replaces Form 24Q for TDS deducted from salary payments. Form 140 replaces Form 26Q for TDS on non-salary payments. Form 143 replaces Form 27EQ for Tax Collected at Source (TCS).
All three forms must be filed for the first quarter of TY 2026-27 by July 31, 2026.
MUST READ: TDS deducted from salary but missing in Form 26AS? What the law says about your tax liability
The new forms are part of the migration to the Income-tax Act, 2025, which has reorganised provisions and introduced fresh section numbering while retaining the overall compliance structure.
New section codes for TDS and TCS
Along with new forms, deductors will also have to report transactions using the new section codes prescribed under the Income-tax Act, 2025.
For example, the earlier Section 192 governing TDS on salary payments is now reported under Section 1602. Similarly, TDS provisions relating to commission, rent, contractor payments, professional fees, purchase of goods and partnership remuneration have all been assigned new section numbers.
TCS provisions have also been renumbered. For instance, TCS on the sale of scrap, earlier covered under Section 206C(1), is now reported under Section 1073.
Tax experts advise businesses to ensure that their payroll systems, accounting software and TDS utilities have been updated with the revised section codes before preparing quarterly statements.
Q1 TDS/TCS Return Filing (TY 2026-27): Key changes at a glance
| Particulars | Old Framework | New Framework (Income-tax Act, 2025) |
|---|---|---|
| Salary TDS return | Form 24Q | Form 138 |
| Non-salary TDS return | Form 26Q | Form 140 |
| TCS return | Form 27EQ | Form 143 |
| Due date for Q1 return | 31 July | 31 July 2026 |
| Applicable law | Income-tax Act, 1961 | Income-tax Act, 2025 |
| Section references | Old section numbers | New section codes |
Key TDS/TCS section code changes
| Nature of Payment | Old Section | New Section | TDS/TCS Rate |
|---|---|---|---|
| Salary | 192 | 1602 | Slab rates |
| Commission/Brokerage | 194H | 1606 | 2% |
| Rent (Land/Building) | 194I(a) | 1609 | 10% |
| Rent (Plant & Machinery) | 194I(b) | 1610 | 2% |
| Professional/Technical Fees | 194J | 1627 | 10% |
| Contractor Payments | 194C | 1623 | 1%/2% |
| Purchase of Goods | 194Q | 1631 | 0.1% |
| Partner's Salary/Commission | 194T | 1667 | 10% |
| TCS on Sale of Scrap | 206C(1) | 1073 | 2% |
Compliance checklist before filing
| Checklist | Action Required |
|---|---|
| Verify return form | Use Form 138, 140 or 143, as applicable |
| Check section codes | Use new section numbers under the Income-tax Act, 2025 |
| Reconcile challans | Match tax deposited with deductions collected |
| Split common challans | Allocate amounts correctly if one challan covers multiple section codes |
| Meet due date | File Q1 TDS/TCS returns by July 31, 2026 |
Watch out for common challans
Chartered Accountant Harshil Sheth has highlighted another practical challenge that deductors may face while filing Q1 returns.
If tax has been deposited for multiple section codes using a single challan, additional reconciliation may be required before filing the returns.
According to Sheth, the challan amount must be correctly allocated among Form 138, Form 140 and Form 143, as the return filing utility needs to identify which portion of the tax payment relates to each return.
He advises taxpayers to carefully review challan details while downloading payment records, as proper classification at this stage can save considerable reconciliation time later.
Why accurate filing matters
Although the return formats have changed, the compliance responsibility remains the same. Incorrect section codes, mismatch between challans and returns, or errors in allocating tax payments can lead to defective filings, notices or delays in processing TDS credits.
Tax professionals recommend reconciling deduction records with challans before preparing quarterly returns and verifying that each deduction has been mapped to the correct form and section code.
With the first quarterly filing under the new Income-tax Act now underway, businesses that prepare early and update their systems are likely to find the transition smoother. Completing reconciliations in advance and ensuring the correct use of the revised forms and section codes can help avoid unnecessary compliance issues before the July 31, 2026 deadline.