Form 140 Gross Amount Reporting When Aggregate TDS Threshold Is Crossed

[Rajagopal K]

I request views of tax professionals and TDS experts on the following issue under the Income-tax Act, 2025, regarding Form 140.

A manufacturing company engages ABC Manpower Services Pvt. Ltd. for manpower supply. The agency raises a monthly bill of Rs. 20,000.

Month	Bill	Cumulative
April	Rs. 20,000	Rs. 20,000
May	Rs. 20,000	Rs. 40,000
June	Rs. 20,000	Rs. 60,000
July	Rs. 20,000	Rs. 80,000
August	Rs. 20,000	Rs. 1,00,000
September	Rs. 20,000	Rs. 1,20,000

Each bill is below the Rs. 30,000 single-payment threshold. The aggregate exceeds Rs. 1,00,000 in September at Rs. 1,20,000.

As the contractor is a corporate entity, TDS is 2%, making TDS on Rs. 1,20,000 Rs. 2,400.

Issue

For the Q2 Form 140 TDS return, what Gross Amount should be reported?

Option A - Cumulative: Rs. 1,20,000; TDS Rs. 2,400.

Option B - Q2 Amount: Rs. 60,000; TDS Rs. 2,400.

Under Option B, only July-September payments are reported. The Rs. 2,400 TDS represents 2% of the cumulative Rs. 1,20,000 after the threshold is crossed.

The company's P&L records Rs. 1,20,000 manpower expenditure for April-September.

Expert Opinion Requested

1. Which is correct for Q2 Form 140: Rs. 1,20,000 or Rs. 60,000?

2. When the Rs. 1,00,000 aggregate threshold is crossed during Q2, does Form 140 require cumulative reporting from April, or only Q2 payments/credits?

3. If Option B is correct, what is the statutory basis for reporting Rs. 2,400 TDS against Rs. 60,000 Gross Amount when the rate is 2%?

4. If Option A is correct, what provision of the Income-tax Act, 2025, Income-tax Rules, 2026, Form 140, RPU or FVU instructions supports cumulative reporting?

5. Which method correctly reconciles Form 140 with the Rs. 1,20,000 P&L expenditure?

Kindly provide an expert opinion based on the statutory provisions and official Form 140/RPU/FVU instructions, citing the relevant section, rule or form-field reference wherever possible.

The purpose is solely to determine the correct TDS-return reporting methodology when the aggregate threshold is crossed during the quarter.

[Sanjeev Agarwal]

Summary

For the stated facts, Option B is the defensible reporting position:

• Q2 Form 140 - Amount paid/credited: Rs. 60,000 (July-September)
• TDS deducted: Rs. 2,400

Under section 393(1) of the Income-tax Act, 2025, manpower supply falls within "work" for contractor TDS. Since ABC Manpower Services Pvt. Ltd. is a company, the applicable rate is 2%. The Rs. 1,00,000 aggregate threshold is exceeded only in September, when cumulative payments reach Rs. 1,20,000. Consequently, TDS is calculated on the entire Rs. 1,20,000, giving Rs. 2,400.

However, this does not mean that Rs. 1,20,000 must be reported again in Q2 Form 140. Rule 219 prescribes Form 140 as a quarterly TDS statement, and the Form 140 Annexure specifically reports the "amount paid or credited during the quarter." Therefore, Q2 should report only July-September payments of Rs. 60,000.

The apparent mismatch-Rs. 60,000 reported but Rs. 2,400 TDS-is therefore explainable: Rs. 60,000 is the Q2 transaction amount, whereas Rs. 2,400 is calculated on the statutory cumulative amount of Rs. 1,20,000.

Reconciliation

Particulars	Q1	Q2	Cumulative
Manpower payments	Rs. 60,000	Rs. 60,000	Rs. 1,20,000
TDS	Nil	Rs. 2,400	Rs. 2,400

Thus, the Rs. 1,20,000 P&L expenditure reconciles through Q1 + Q2, not by reporting the cumulative amount again in Q2.

I have not identified an express CBDT/RPU/FVU instruction requiring earlier-quarter payments to be re-reported cumulatively when the threshold is crossed in a later quarter. Accordingly, Option A lacks a clear statutory/form-field basis.

Conclusion: Q2 Form 140 should report Rs. 60,000 amount paid/credited and Rs. 2,400 TDS, subject to verification against any subsequent CBDT/Protean RPU/FVU clarification.

[Rajagopal K]

Thank you, Sir. I understand and agree with your point that Form 140 is a quarterly statement and that Q2 covers July to September.

However, my specific concern is regarding the reconciliation between the cumulative basis on which TDS becomes deductible and the quarter-wise Gross Amount reported in Form 140.

In the given example, the cumulative amount from April to September is Rs. 1,20,000 and, after crossing the aggregate threshold, TDS at 2% works out to Rs. 2,400.

If Q2 Form 140 reports only the Q2 Gross Amount of Rs. 60,000, but TDS of Rs. 2,400 is reported as a catch-up deduction on the cumulative Rs. 1,20,000, then the TDS reported against the Q2 Gross Amount effectively works out to 4%.

Therefore, could you kindly clarify:

1. What is the specific provision under the Income-tax Act, 2025, Income-tax Rules, 2026, or the Form 140/RPU/FVU instructions that permits Rs. 2,400 TDS to be reported against a Gross Amount of Rs. 60,000 when the applicable rate is 2%?
2. If Form 140 requires only Q2 payments/credits to be reported, how is the earlier Rs. 60,000 (April-June), which forms part of the cumulative Rs. 1,20,000 on which the catch-up TDS is calculated, represented in the TDS statement?
3. Since the TDS statement subsequently feeds into the deductee's tax records/Form 26AS, how should the Rs. 60,000 Q2 Gross Amount be reconciled with the Rs. 1,20,000 actual expenditure recorded in the Profit & Loss Account?
4. Most importantly, if the statutory position is that Gross Amount = Rs. 60,000 and TDS = Rs. 2,400, kindly provide the exact statutory/form-field/RPU-FVU basis for this treatment.

I am not disputing that Form 140 is quarterly. My question is specifically how a cumulative threshold-based TDS deduction is to be correctly represented in a quarter-specific Gross Amount field.

I would be grateful for the relevant statutory provision or official Form 140/RPU/FVU instruction supporting the treatment.

[Sanjeev Agarwal]

The correct statutory position on TDS liability is clear: Rs. 2,400.

But the exact Form 140 representation of that cumulative catch-up deduction is not expressly resolved by the statutory/Form 140 material identified.

Accordingly, I would not certify either Rs. 60,000/Rs. 2,400 or Rs. 1,20,000/Rs. 2,400 as expressly mandated by Form 140 without further RPU/FVU/CBDT clarification.

The prudent approach is to verify the current RPU/FVU data structure and validation behaviour for this precise scenario or obtain written clarification from the Department/Protean.

The Q1 + Q2 P&L reconciliation itself remains straightforward: Rs. 60,000 + Rs. 60,000 = Rs. 1,20,000 expenditure, with Rs. 2,400 TDS arising when the cumulative statutory threshold is exceeded.

[Rajagopal K]

Thanks for your reply sir. Kindly share the contact details of Protean if available with you Sir.

[Sanjeev Agarwal]

Could not understand what is Protean?

AI Summary

Quarterly TDS reporting after aggregate threshold crossing remains unresolved where cumulative catch-up deduction exceeds the quarter's apparent rate.
Where contractor TDS becomes payable after the aggregate threshold is crossed, the deduction may be calculated on the full cumulative payment amount although Form 140 is described as a quarterly statement. Reporting only the quarter's payments together with a cumulative catch-up deduction creates an apparent rate mismatch. No identified statutory provision, Form 140 instruction, or RPU/FVU/CBDT guidance expressly resolves whether the gross amount should be quarterly or cumulative in this scenario. Current validation requirements or written clarification should be verified before either method is treated as mandated.