Form 130 and Form 138 are the new numbers for Form 16 and Form 24Q under the Income-tax Act, 2025 and the Income-tax Rules, 2026, which apply from 1 April 2026. Form 130 is the yearly certificate of tax deducted from an employee's salary, which the employer downloads from TRACES and gives to the employee by 15 June after the tax year. Form 138 is the quarterly statement in which the employer reports the tax deducted from salaries, due by 31 July, 31 October, 31 January and 31 May for the four quarters. The job itself is the same as before: deduct tax from salary each month, deposit it with a challan, report it every quarter and issue the certificate after the year ends. What changed is the law the forms sit under, the form numbers, and the term "tax year" in place of the old previous year and assessment year. Salary paid up to 31 March 2026 stays under the old Act and the old forms.
Key Highlights
- Form 16 is now Form 130 and Form 24Q is now Form 138, for salary paid from 1 April 2026 under the Income-tax Act, 2025.
- Form 138 for tax year 2026-27 is due on 31 July 2026, 31 October 2026, 31 January 2027 and 31 May 2027 for Q1 to Q4.
- Form 130 for tax year 2026-27 must be downloaded from TRACES and issued to each employee by 15 June 2027; a certificate made any other way is not a valid Form 130.
In This Article
- The old forms and the new ones
- Which salary goes on which form
- What a small employer does every month
- What happens every quarter
- Where Form 130 comes from
- Declarations and the regime choice
- How the app helps your CA
- Frequently Asked Questions
The old forms and the new ones
| Earlier form | New form | What it is | When |
|---|---|---|---|
| Form 16 | Form 130 | Yearly certificate of tax deducted from salary, given to each employee | By 15 June after the tax year |
| Form 24Q | Form 138 | Quarterly statement of tax deducted from salary | 31 July, 31 October, 31 January, 31 May |
The Income-tax Rules, 2026 renumbered the other TDS forms as well. This post covers the two that a small employer with salaried staff deals with. Sources: the Form 138 user manual on the income-tax e-filing portal and the Income Tax Department's Form 130 notes, read on 10 November 2026.
Which salary goes on which form
The deciding date is when the salary was paid or credited. According to the e-filing portal's guidance on the new Act, any sum paid or credited on or before 31 March 2026 is governed by the Income-tax Act, 1961, and any sum paid or credited on or after 1 April 2026 by the Income-tax Act, 2025.
In practice:
- Salary for 2025-26 was reported on Form 24Q, and the employee gets Form 16 for that year.
- Salary from April 2026 onwards is reported on Form 138, and the employee will get Form 130 for tax year 2026-27.
Form 138 for the first quarter of 2026-27 (April to June) was due on 31 July 2026, and the second quarter (July to September) on 31 October 2026. The next one, for October to December, is due on 31 January 2027.
What a small employer does every month
- Work out each person's tax for the year. Take the expected salary for the tax year, apply the regime they chose and their declared deductions, and spread the tax over the remaining months.
- Deduct it from salary. It appears on the payslip and in the salary journal as TDS on salary payable.
- Deposit it with a challan. Keep the BSR code, challan number, date and amount, because the quarterly statement asks for them.
Example: if a manager's tax for the year comes to ₹30,000 and you start deducting in April, that is ₹2,500 a month. If he joins in October, the same tax is spread over six months, ₹5,000 a month. Your CA should confirm the yearly figure, because it depends on his regime, his declarations and any salary from a previous employer.
What happens every quarter
Each quarter the deductor prepares Form 138 with the details of every employee, the salary paid, the tax deducted and the challans that cover it. According to the e-filing portal, the statement is prepared in the Return Preparation Utility (RPU) from Protean, checked with the File Validation Utility, and uploaded on the e-filing portal after logging in with the TAN. Once accepted it goes to TRACES for processing.
| Quarter of tax year 2026-27 | Months | Form 138 due by |
|---|---|---|
| Q1 | April to June 2026 | 31 July 2026 |
| Q2 | July to September 2026 | 31 October 2026 |
| Q3 | October to December 2026 | 31 January 2027 |
| Q4 | January to March 2027 | 31 May 2027 |
Most small businesses have their CA prepare and upload it. Your part is to give the CA clean data: each person's PAN, salary month by month, tax deducted and the challan details.
Where Form 130 comes from
Form 130 is generated from TRACES, the TDS reconciliation site, after your quarterly statements are processed. The Income Tax Department's notes say the employer must download it from TRACES and give it to the employee, signed digitally or by hand, by 15 June after the tax year. A certificate prepared any other way is not a valid Form 130. That means no payroll app or Excel template can make a real Form 130 for you. What an app can give is the salary and tax figures behind it, so you can check them before your CA downloads the certificate.
Declarations and the regime choice
Each employee tells you which tax regime they want and, if they pick the old regime, what they will invest or spend under sections such as 80C, 80D and home loan interest. Collect these early in the tax year, not in March. Tax worked out on a declaration that is wrong or late means a large deduction in the last quarter. Ask for proof before the year ends, and adjust the remaining months if the figures change.
How the app helps your CA
Takkada's Staff and Payroll add-on works out the TDS on salary every month under the new or old regime. Staff send their tax-saving declarations (80C, 80D, home loan) from their phone, and you check and accept them. You record TDS challans from the bank receipt. Each quarter the app prepares the quarterly TDS statement data (Form 138, the new Form 24Q) for your CA: a text file for Q1 to Q3 and an Excel sheet for Q4. Each staff member also gets a yearly Salary and tax statement PDF with the figures behind their tax. Form 130 comes only from TRACES. The tax rates in the app are not yet checked by a CA, and the app says so on screen, so have your CA check the figures.
See how the add-on prepares government files and gives you TDS on salary worked out for your CA, read what to look for in payroll for a Tally business, or go to the staff attendance and salary app.
Frequently Asked Questions
Q: What is the new name of Form 16?
A: Form 16 is now Form 130 under the Income-tax Rules, 2026. It is the yearly certificate of tax deducted from salary, and for tax year 2026-27 the employer issues it by 15 June 2027. Salary paid up to 31 March 2026 still gets the old Form 16.
Q: What is Form 138?
A: Form 138, earlier known as Form 24Q, is the quarterly statement an employer files to report tax deducted from salaries. It lists each employee's PAN, salary, tax deducted and the challans used to deposit it. It is filed four times a year, for April to June, July to September, October to December and January to March.
Q: Who issues Form 130?
A: The employer issues it to each employee whose tax was deducted, but the form itself must be downloaded from TRACES. The Income Tax Department's notes say a certificate prepared any other way is not a valid Form 130. For tax year 2026-27 the last date to issue it is 15 June 2027.
Q: When is the Form 138 due?
A: For tax year 2026-27, Q1 was due on 31 July 2026, Q2 on 31 October 2026, Q3 is due on 31 January 2027 and Q4 on 31 May 2027. Late statements can attract a late fee, so agree a date with your CA a week before each one.
Q: Do small employers need to file Form 138?
A: Yes, if you deducted tax from any employee's salary in the quarter. The e-filing portal lists companies, firms, government bodies and individuals among those who file it. If no one's salary was above the taxable level and no tax was deducted, ask your CA whether a statement is needed for that quarter.
Takkada's Staff and Payroll add-on keeps declarations, monthly TDS and challans together and prepares the quarter's data for your CA. It is switched on for each company separately; message us on WhatsApp to see it on your books.