Over the past few months, payroll systems in India have been adjusted to a new quarterly TDS statement by employers. Form 138 under the Income Tax Act, 2025 has taken the place of Form 24Q, the return used for years to report tax deducted from employee pay, as of April 1st, 2026. The form’s number, underlying section, and a few procedural specifics have changed, but its intent has remained the same. What payroll teams and employers should know about this change is as follows.

What Form 138 Is Used For

Form 138 is a quarterly statement filed by any employer, whether a company, firm, government body, or individual, who deducts tax from employees’ salaries under Section 392 of the Income Tax Act, 2025. It also covers specified banks that deduct tax on pension and interest income paid to specified senior citizens. This second use is new territory that Form 24Q didn’t formally carry, since senior citizen pension and interest reporting now sit within the same form.

The form must be filed electronically through the TRACES portal for each quarter. Not every annexure is required every time. Annexure I goes with all four quarterly filings, while Annexure II and Annexure III, which cover the detailed annual salary or pension summary, get submitted only with the fourth quarter statement. This annual data eventually feeds into Form 130, the certificate that has replaced Form 16 for employees.

How the Due Dates and Filing Process Work

The quarterly due dates for Form 138 follow the same familiar pattern that Form 24Q used:

• Q1 (April to June): 31st July of the tax year
• Q2 (July to September): 31st October of the tax year
• Q3 (October to December): 31st January of the tax year
• Q4 (January to March): 31st May of the year following the tax year

Once submitted, Form 138 can’t be edited directly. If an error needs fixing, whether a wrong PAN, an incorrect amount, or any other detail, the employer must file a correction statement after the original return has been processed by CPC-TDS. This correction window runs for two years from the end of the tax year in which the statement was due. After successful filing, the portal issues an Acknowledgement Receipt Number as proof of submission.

Key Differences from Form 24Q

While the core reporting stays the same, a few things set Form 138 apart from its predecessor:

• The governing section has moved from Section 192 of the old Act to Section 392 of the Income Tax Act, 2025
• Terminology has shifted from “Assessment Year” and “Financial Year” to “Tax Year” throughout the form
• Specified senior citizen pension and interest reporting is now built into the same form, rather than handled separately
• Currency references now use the rupee symbol instead of “Rs.” across the document
• Late filing and non-compliance attract penalties under Sections 427, 461, and 465(2)(g) of the new Act, replacing the older penalty provisions

Timely and accurate filing remains just as important as before. It ensures employees receive proper TDS credit reflected in their records, and it protects employers from the legal exposure that comes with late or inaccurate returns.

Conclusion

Form 138 carries forward everything. Form 24Q was meant to do, reporting salary TDS accurately and on time, while adding a cleaner structure, updated terminology, and expanded coverage for senior citizen income. Employers who update their payroll processes now, align with the new section references, and keep the annexure requirements straight will find the quarterly filing routine just as manageable as it always was.