The government has introduced new Forms 138 and 140 for Tax Deducted at Source (TDS) reporting, replacing the old Forms 24Q and 26Q. According to reports from Mint, these changes are part of the Income-tax Act, 2025, and Income-tax Rules, 2026 rolled out from 1 April 2026. The Income Tax Department stated that these forms are designed to streamline tax filings, expand digital reporting, and make tax administration more transparent for businesses and individuals.
The new Forms 138 and 140 are described as 'simple, tech-enabled and reliable' by the I-T Department, as reported by Mint. These forms offer advanced features including auto-prefill of details, real-time validations, drop-down menus, date-pickers, and checkbox verification. These features are designed to guide users and reduce mistakes while filing, helping taxpayers file their TDS returns easily and on time.
Form 138 is specifically used by employers to report TDS deducted from salaries paid to employees under section 392, and by specified banks to report TDS on income paid to specified senior citizens. According to Mint, two types of entities are required to file Form No. 138: any employer whether a company, firm, government body, or individual that deducts tax from employees' salaries, and any specified bank that deducts tax on pension and interest income paid to specified senior citizens.
Form 140 serves as a quarterly statement filed by deductors responsible for tax deduction on non-salary payments such as commission, brokerage, professional fees, or rent made to residents. As reported by Mint, every entity whether a company, firm, partnership, government, or individual responsible for making non-salary payments to a resident on which tax is deductible must file Form 140 if they meet the specified criteria.
On the Tax Collected at Source (TCS) front, the government has implemented significant rate reductions to ease upfront tax burden. According to Mint, foreign travel packages will now be taxed at a flat 2% rate, replacing the earlier applicable rates of 5% (up to ₹10 lakh) and 20% for amounts above ₹10 lakh threshold. Additionally, education and medical remittances abroad have seen TCS reduced from 5% to 2% on applicable amounts. The new Income Tax Act 2025 has introduced entirely new TCS obligations on luxury goods with codes 1076-1085, including motor vehicles above ₹10 lakh (1% TCS), wrist watches (1% TCS), art pieces (1% TCS), and yachts/boats/helicopters (1% TCS).
