Q1 Tax Year 2026-27: TDS & TCS Return Filing Forms and Due Dates

Q1 Tax Year 2026-27: TDS & TCS Return Transition Every Deductor Must Get Right Before 31 July 2026

The Income-tax Act, 2025 came into force on 1 April 2026. For most deductors, the first real consequence of that transition arrives not on the assessment side but on the compliance side — in the quarterly statement due on 31 July 2026.

This is the first return filed entirely under the new Act and the Income-tax Rules, 2026. The substance of TDS has not been rewritten. The form numbers, the section references and, for TCS collectors, the due date itself have all changed. A return prepared on the old form numbers will not clear validation, and a certificate issued in the old format is not a valid certificate.

This article maps what has changed, where the transition traps sit, and what a deductor should verify before the statement is uploaded.

1. The form mapping

The quarterly statements are furnished under section 397(3)(b) of the Income-tax Act, 2025, read with Rule 219 of the Income-tax Rules, 2026. The Income Tax Department’s own form documentation for Form No. 143 records it expressly as the successor to Form No. 27EQ, filed under Rule 219.

2. The date that has actually moved

For TDS, the quarterly calendar is unchanged in substance — 31 July, 31 October, 31 January and 31 May for Q1 to Q4.

For TCS, it has moved.

Under the erstwhile Rule 31AA, the TCS statement in Form 27EQ for the April–June quarter was due on 15 July. Under the Income-tax Rules, 2026, the TCS statement in Form 143 follows the same calendar as the TDS statements and is due on 31 July.

This is a quiet change with two opposite failure modes. A collector who has not updated the reminder has already passed 15 July and may believe a default has occurred where none has. A collector who assumes the old date persisted for filing but not for anything else may treat the extra fortnight as slack rather than as a statutory date. Neither position is correct. For Q1 of Tax Year 2026-27, the TCS statement is due on 31 July 2026, in Form 143.

3. The rule that decides which form applies

The single most common transition error in practice is choosing the form by reference to the filing date rather than the period of deduction or collection.

The governing law is fixed by the period to which the statement relates, not by when the statement is furnished.

• Q4 of FY 2025-26 (January–March 2026) is governed by the Income-tax Act, 1961. It is furnished on Form 24Q / 26Q / 27Q / 27EQ, with the old section references — even where it is filed, revised, or corrected in June, September or December 2026.
• Q1 of Tax Year 2026-27 (April–June 2026) is governed by the Income-tax Act, 2025. It is furnished on Form 138 / 140 / 143 / 144.

A correction statement for FY 2025-26 filed today therefore goes on the old form. A Q1 statement for Tax Year 2026-27 filed today goes on the new form. The two must not be mixed, and a single deductor will legitimately be filing both in the same calendar year.

4. Section references: the 194-series is gone

Deductors have cited section 192 for salary, 194C for contract payments and 194J for professional fees for so long that the numbers have become shorthand. For payments made on or after 1 April 2026, those numbers no longer exist.

• Section 392 now houses salary TDS.
• Section 393 consolidates the entire resident non-salary TDS regime into a single provision with a schedule of payment types, each carrying a numeric payment code rather than a standalone section number.
• Section 397 governs the furnishing of quarterly statements.

The practical consequence is that the reporting layer changes even where the rate does not. In Form 140, the deductor reports the payment code, not “194J”. A challan tagged to an old section, or a return prepared with old section codes, will fail validation.

Practitioners should verify the applicable payment code for each payment type against the current utility and the department’s published code list before filing. This is the single most error-prone field in the transition, and a wrong code is a correction statement — not a warning.

5. Tax Year, not Assessment Year

The Act replaces the previous year / assessment year construct with the tax year. On the challan, deposits for April 2026 onward must be tagged to Tax Year 2026-27.

This matters more than it sounds. A challan misallocated to AY 2026-27 lands against FY 2025-26 records. The deposit is real, the money has reached the exchequer, and the credit will not appear where the return expects it. The resulting mismatch surfaces as a short-payment default on a return where no shortfall actually exists — and the correction cycle is disproportionate to the original error.

6. Consequences of getting Q1 wrong

Late filing fee. The ₹200-per-day fee familiar from section 234E continues under the Act 2025 framework. It runs from the day after the due date to the date of furnishing, and cannot exceed the amount of tax deducted or collected in that statement.

Interest on late deposit. This remains the more expensive exposure, and it is frequently underestimated. Interest runs from the date of deduction, not from the 7th of the following month. A deduction made on 2 June and deposited on 8 July attracts interest for two months, not for one day. For June 2026 deductions, the deposit was due by 7 July 2026 — practitioners should confirm the interest computation before the statement is uploaded, not after the intimation arrives.

Certificates cannot be generated. Form 130 and Form 131 are generated from TRACES only after the statement is filed and processed. A deductor who has deducted and deposited correctly but not filed the statement cannot issue a valid certificate — and the deductee’s credit does not exist for practical purposes.

Correction window. Corrections to statements for Tax Year 2026-27 are permitted within a defined window measured from the end of the tax year. This is a firmer limit than practitioners are accustomed to. A default identified three years later may no longer be curable by correction.

7. A pre-filing checklist for Q1

1. Confirm the software release in writing. Ask the vendor a single question: does the Tax Year 2026-27 release map the Q1 statement to Forms 138, 140, 143 and 144? A verbal assurance is not a control.

2. Segregate the periods. Any FY 2025-26 correction goes on the old form. Any Q1 TY 2026-27 statement goes on the new form. Confirm that the utility has not defaulted to the wrong one.

3. Bulk-verify deductee PANs on TRACES before upload. An inoperative or unlinked PAN attracts the higher rate and, more importantly, breaks the credit chain for the deductee.

4. Reconcile the April–June challans — BSR code, date of deposit, tax year tagging, amount — against the deduction register.

5. Re-map payment codes for every payment type. Do not carry forward last year’s section-code master.

6. Update the employee declaration format from Form 12BB to Form 124. Where HR is still circulating the old template, the underlying deduction logic has usually not been reviewed either.

7. Diarise the certificate dates. For non-salary payments, the certificate follows the statement within the prescribed window after the due date.

8. Closing observation

The transition is a renumbering, not a rewrite. That is precisely what makes it risky. A rewrite would have forced every deductor to re-read the law. A renumbering allows the process to continue on autopilot — until a validation failure, a mismatched challan or an ungenerable certificate surfaces the fact that nobody actually checked.

The cost of getting Q1 right is a few hours of preparation in July. The cost of getting it wrong is a correction cycle running through the busiest fortnight of the assessment year, with deductee grievances attached.

Practitioners are advised to verify all form numbers, payment codes and due dates against the Income Tax Department’s published forms and utilities at incometax.gov.in before filing. Where a departmental FAQ or utility differs from a commentary, the departmental position prevails.